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U.S. Patent Opinions and Evaluations

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U.S. Patent Opinions and Evaluations David L. Fox

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1 Oxford University Press, Inc., publishes works that further Oxford University’s objective of excellence in research, scholarship, and education. Oxford New York Auckland Cape Town Dar es Salaam Hong Kong Karachi Kuala Lumpur Mexico City Nairobi New Delhi Shanghai Taipei Toronto

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Copyright © 2010 by Oxford University Press, Inc. Published by Oxford University Press, Inc. 198 Madison Avenue, New York, New York 10016 Oxford is a registered trademark of Oxford University Press Oxford University Press is a registered trademark of Oxford University Press, Inc. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior permission of Oxford University Press, Inc. _____________________________________________ Library of Congress Cataloging-in-Publication Data Fox, David L. U.S. patent opinions and evaluations / David L. Fox. p. cm. Includes bibliographical references and index. ISBN 978-0-19-536727-0 ((pbk.) : alk. paper) 1. Patent laws and legislation—United States. 2. United States. Patent Office—Rules and practice. 3. Legal opinions—United States. I. Title. II. Title: United States patent opinions and evaluations. KF3120.F69 2010 346.7304'86—dc22 2009015323 _____________________________________________ 1 2 3 4 5 6 7 8 9 Printed in the United States of America on acid-free paper Note to Readers This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is based upon sources believed to be accurate and reliable and is intended to be current as of the time it was written. It is sold with the understanding that the publisher is not engaged in rendering legal, accounting, or other professional services. If legal advice or other expert assistance is required, the services of a competent professional person should be sought. Also, to confirm that the information has not been affected or changed by recent developments, traditional legal research techniques should be used, including checking primary sources where appropriate. (Based on the Declaration of Principles jointly adopted by a Committee of the American Bar Association and a Committee of Publishers and Associations.)

You may order this or any other Oxford University Press publication by visiting the Oxford University Press website at www.oup.com

This work is dedicated to Dennis Abrams


Disclaimer

The material in this treatise is public information and has been prepared solely for educational purposes to contribute to the understanding of U.S. patent law. Any opinions, suggestions, recommendations, and the like expressed herein are solely for illustrative purposes, and do not necessarily reflect the personal or professional views of the author; accordingly, none of them can be binding upon the author. Moreover, this treatise has been prepared solely by the author, independently of and without the support of Fulbright & Jaworski L.L.P. or its clients, any other entity with whom the author may be associated or its clients, or any parties represented by or in any manner associated with the author. Therefore, the materials in this book, including but not limited to any opinions, suggestions, recommendations, etc. cannot be attributed to and cannot be binding upon Fulbright & Jaworski L.L.P. or its present or future clients, any other entity with whom the author may be associated (including those in the future or its present or future clients), or any parties represented by or in any manner associated with the author, presently or in the future. Although every attempt has been made to ensure that the material in this book is accurate, errors or omissions may be contained herein for which any liability is disclaimed. This publication does not provide—and shall not be construed as providing—any legal or other professional advice. Furthermore, the author is not necessarily licensed to practice law in a particular jurisdiction. Nothing herein shall establish an attorney-client relationship between any parties, including but not limited to a relationship between a reader and the author, Fulbright & Jaworski L.L.P., or any other entity with which the author may be associated, including in the future. This publication is not a substitute for legal or other professional advice. Should the reader require legal or other professional advice, he or she should seek the services of a competent, properly licensed attorney or other professional.

vii


Contents

ABOUT THE AUTHOR

xliii

ACKNOWLEDGMENTS

xlv

CHAPTER 1 Evaluations and Opinions of U.S. Patents: Overview CHAPTER 2 Patent Law Principle I: Claim Construction CHAPTER 3 Patent Law Principle II: Infringement: Literal Infringement

1 29 117

CHAPTER 4 Patent Law Principle II: Infringement: The Doctrine

of Equivalents

145

CHAPTER 5 Patent Law Principle II: Infringement: Indirect

Infringement, Divided Infringement, and Section 271(e)(1) “Safe Harbor”

185

CHAPTER 6 Patent Law Principle III: Validity: General Principles of

Anticipation and Anticipation by Printed Publication

231

CHAPTER 7 Patent Law Principle III: Validity: Other Forms

of Anticipation

275

CHAPTER 8 Patent Law Principle III: Validity: Obviousness

295

CHAPTER 9 Patent Law Principle III: Validity: Other Forms of Invalidity

343

CHAPTER 10 Patent Law Principle IV: Enforceability

389

CHAPTER 11 Evaluating and Opining on Third Party Patents:

Patent Due Diligence for Mergers, Acquisitions, and Licensing

413

CHAPTER 12 Evaluating and Opining on Third Party Patents:

Evaluations and Opinions of Patents for Clearance (Freedom to Operate), Noninfringement, Invalidity, and Unenforceability

ix

445

x

Contents CHAPTER 13 Evaluating and Opining on Third Party Patent

Rights: Opinions for Avoiding Willful Infringement

475

CHAPTER 14 Evaluating and Opining on Third Party Patent

Rights: Prefiling Rule 11 and Section 285 Investigations in Declaratory Judgment Actions, ANDA Paragraph IV Certifications, Avoidance of Preliminary Injunctions, and Readiness in “Rocket Docket” Jurisdictions and ITC Investigations

493

CHAPTER 15 Evaluating and Opining on Third Party Patent

Rights: Prefiling Evaluations and Opinions for Ex Parte and Inter Partes Reexamination and Other Post-Grant Patent Challenges

525

CHAPTER 16 Evaluating and Opining on One’s Own Patent Rights: SEC

Considerations, Patent Audits, and a Businessperson’s Guide to Evaluations and Opinions of U.S. Patents

551

CHAPTER 17 Evaluating and Opining on One’s Own Patent

Rights: Evaluations and Opinions of Patentability for Potentially New Inventions

589

CHAPTER 18 Evaluating and Opining on One’s Own Patents:

Strategic Patenting, Including Patent Landscapes, Evaluations and Opinions of Claim Scope/Infringement, Validity, Enforceability, and Ownership

621

CHAPTER 19 Evaluating and Opining on One’s Own Patent

Rights: Defensive Due Diligence, Pre-Sale and Pre-Licensing Evaluations and Opinions of Patents

665

CHAPTER 20 Evaluating and Opining on One’s Own Patent Rights:

Prefiling Rule 11 and Section 285 Investigations and Compliance, FDA Orange Book Patent Listing, Obtaining Preliminary Injunctions, and for Readiness in “Rocket Docket” Jurisdictions and ITC Investigations

709


Prefiling Evaluations and Opinions for Post-Grant Patent Corrections Including Reexamination, Reissue, Disclaimer, Certificates of Correction, and Other Issues

737


Evaluations and Opinions of Patents in Bankruptcy and Related Issues

787

Contents xi CHAPTER 23 Competency of, and Reliance on, Opinions for

Avoiding Willful Infringement

831

CHAPTER 24 Waiver of Attorney-Client Privilege and Work

Product Immunity

855

APPENDIX A Sample Outline of Noninfringement and

Invalidity Opinion

895

APPENDIX B Sample Outline of Noninfringement Opinion

925

APPENDIX C Sample Outline of Invalidity Opinion

943

CASE, STATUTE, AND RULE INDEX

969

SUBJEC T MAT TER INDEX

1005


Detailed Contents

ABOUT THE AUTHOR

x liii

ACKNOWLEDGMENTS

xlv

CHAPTER 1 Evaluations and Opinions of U.S. Patents: Overview I. How to Use This Treatise/Highlights of the Treatise A. If You Read Only One Chapter in Its Entirety, It Should Be This Chapter B. This Treatise Is Expressly Limited to U.S. Patents and U.S. Law C. Usage Notes and Footnotes D. Practice Points E. A Businessperson’s Guide to Evaluations and Opinions Regarding U.S. Patents F. Patent Issues in Bankruptcy G. Securities Issues and Patent Rights H. Strategic Patenting II. Overview of Evaluations and Opinions of U.S. Patents III. The Four Patent Law Principles That Apply to Evaluations and Opinions of U.S. Patents A. Claim Construction: The Paramount Principle B. Infringement C. Validity D. Enforceability IV. Evaluations and Opinions of Third Party Patent Rights A. Evaluating and Opining on Third Party Patent Rights for Patent Due Diligence B. Evaluating and Opining on Third Party Patent Rights for Clearance (Freedom to Operate), Noninfringement, and Invalidity C. Evaluating and Opining on Third Party Patent Rights to Avoid Willful Infringement

xiii

1 3 3 3 4 4 4 7 8 9 10 11 11 15 16 18 20 20

21 21

xiv Detailed Contents

V.

VI. VII.

VIII. IX.

D. Evaluating and Opinion on Third Party Patent Rights for Prefiling Rule 11 and Section 285 Investigations in Declaratory Judgment Actions, ANDA Paragraph IV Certifications, Avoidance of Preliminary Injunctions, and Readiness in “Rocket Docket” Jurisdictions and ITC Investigations E. Evaluating and Opining on Third Party Patent Rights for Due Diligence Prior to Post-Grant Challenges Evaluating and Opining on One’s Own Patent Rights A. Evaluating and Opining on One’s Own Patents for SEC Considerations, Including Patent Audits B. Evaluating and Opining on One’s Own Patents for Patentability Determinations C. Evaluating and Opining on One’s Own Patent Rights for Strategic Patenting (Including Patent Landscapes) D. Evaluating and Opining on One’s Own Patent Rights Prior to Sale or Licensing: Defensive Due Diligence E. Evaluating and Opining on One’s Own Patent Rights for Due Diligence Prior to Enforcement Actions, Including Rule 11 Prefiling Investigations, FDA Orange Book Listing Considerations, Preparations for Obtaining Preliminary Injunctions, and Readiness in “Rocket Docket” Jurisdictions and ITC Investigations F. Evaluating and Opining on One’s Own Patent Rights Before Post-Issuance Proceedings G. Evaluating and Opining on One’s Own Patent Rights in Bankruptcy Cases Legal Competency of (and Reliance on) Opinions to Avoid Willful Infringement Waiver of Attorney–Client Privilege and Work-Product Immunity Issues with Evaluations and Opinions of U.S. Patents Sample Outlines of Noninfringement and Invalidity Opinions Detailed Subject Matter Index and Case, Statute and Rule Index

CHAPTER 2 Patent Law Principle I: Claim Construction I. Virtually All Patent Evaluations and Opinions Must Construe Claims II. The Claims Define the Scope of the Patent Grant A. Statutory Basis B. Jurisprudence III. Evidence for Claim Construction A. Background: Pre-Phillips Law B. Phillips v. AWH Corp. C. Current Law of Evidence for Claim Construction IV. Current Law of the Process of Claim Construction A. Overview B. A Brief Summary of the Evidence of Claim Construction

22 23 23 24 24 24 25

25 26 26 26

27 27 27

29 33 35 35 36 39 40 44 48 69 69 69

Detailed Contents C. The Step-By-Step Process of Claim Construction V. Specific Rules of Claim Construction A. Claim Construction Should Not Take into Consideration the Accused Infringing Product or Process B. Avoid Importing Limitations from the Specification into the Claims C. Avoid Reading Out the Preferred Embodiment D. Internal Inconsistency of Terms E. Doctrine of Claim Differentiation F. Means-Plus-Function Claim Limitations G. Product-by-Process Claims H. Preamble as a Limitation I. Construction of Claims to Preserve Validity J. Transitional Phrases VI. Practice Points A. Legally Competent Patent Opinions Must Properly Construe Claims B. In Proper Claim Construction, the Meaning of All Claim Terms Must Be Construed Based on the Meaning of the Terms to One of Ordinary Skill in the Relevant Art in Light of the Intrinsic Evidence C. Every Claim Term Must Be Construed D. Hierarchy of Intrinsic Evidence for Claim Construction E. The Full Prosecution History Must Be Evaluated in Claim Construction F. Express Definitions in the Specification G. Express Definitions and Representations in a Patent’s Prosecution History H. A Patentee May Be His Own Lexicographer I. Disclaimer and Disavowal in a Patent’s Prosecution History J. Know and Use the Rules for Extrinsic Evidence in Claim Construction K. Be Aware of and Apply Specific Rules of Claim Construction L. Up-to-Date Law of Claim Construction Must Be Included in Opinions M. Literal Claim Scope May Differ from Claim Scope under the Doctrine of Equivalents

72 82 82 82 85 85 86 87 94 101 103 105 111 111

111 112 112 112 113 113 113 113 114 114 115 115

CHAPTER 3 Patent Law Principle II: Infringement: Literal Infringement

117

I. The Patent Infringement Statute: 35 U.S.C. § 271 II. Direct Infringement A. Other Subsections of 35 U.S.C. 271 III. Literal Infringement and Infringement under the Doctrine of Equivalents A. Literal Infringement B. The Doctrine of Equivalents

119 119 120 120 120 121

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Detailed Contents IV. Determining Literal Infringement A. Step One: Claim Construction B. Step Two: Comparison of the Construed Claims with the Accused Product or Process C. The Effect of Additional Elements in the Potentially Infringing Product or Process D. Dependent Claims E. Infringement of One Claim of a Patent is Infringement of the Patent V. Specific Rules of Literal Infringement A. Means-Plus-Function Claim Terms B. Product-by-Process Claims C. “Practicing the Prior Art” VI. Practice Points A. As the First Step, Always Objectively Construe the Patent’s Claims B. Always Compare the Objectively Construed Claim with the Potentially Infringing Product or Process C. For Evaluations and Opinions, It is Essential to Understand the Potentially Infringing Product or Process D. Role of the Doctrine of Equivalents E. Be Aware of Non-Direct Infringement, Activities Abroad, and Infringement Exemptions F. Be Aware of Special Claiming Issues Such as Means-Plus-Function and Product-by-Product Claims

121 122 122 123 127 128 129 129 134 141 142 142 142 143 143 143 143

CHAPTER 4 Patent Law Principle II: Infringement: The Doctrine

of Equivalents

145

I. Infringement Under the Doctrine of Equivalents A. History B. Determination of Equivalents Involves Construing the Scope of Potential Equivalents of Claim Limitations, an Exercise That Is Strictly Different From Claim Construction for Literal Infringement C. Burden of Proof D. Questions of Fact and Law II. Defining Equivalents A. All Limitaions Rule (All Elements Rule; Doctrine of Vitiation) B. Insubstantial Differences; Function-Way-Result; Interchangeability III. Limitations on the Doctrine of Equivalents A. Prosecution History Estoppel B. Exclusion C. Dedication-Disclosure Rule D. Prior Art and the Hypothetical Claim E. Means-Plus-Function Claims F. Product-by-Process Claims

147 148

152 153 153 154 155 157 158 158 166 168 169 170 174

Detailed Contents IV. Practice Points A. A Competent Noninfringement Opinion Must Separately Consider the Doctrine of Equivalents B. Claim Construction for Literal Infringement Differs from Construing Claims for Infringement Under the Doctrine of Equivalents C. The All Limitations Rule Is All Important D. Proof of Equivalency E. Be Sure to Look for and, Where Necessary, Apply Limitations and Special Rules for Determining Infringement Under the Doctrine of Equivalents

181 181

182 182 182

183

CHAPTER 5 Patent Law Principle II: Infringement: Indirect Infringement,

Divided Infringement, and Section 271(e)(1) “Safe Harbor”

185

I. Indirect Infringement A. Direct Infringement Compared with Indirect Infringement B. Inducement to Infringe (Inducement) C. Contributory Infringement D. Supplying Components in or from the United States for Assembly Abroad into a Combination That Would Infringe if Assembled in the United States (Section 271(f)) E. Importation into the United States, or Use, Sale, or Offer to Sell in the United States of a Product Made Abroad by a Process That Would Infringe if Performed in the United States (Section 271(g)) II. Joint (Divided) Infringement A. Only One Party May Be Liable for Infringement, and That Party Must Perform All Infringing Acts Corresponding to a Claim’s Limitations B. The Infringer Must “Direct or Control” the Acts of Another to Be Held Solely Liable for Infringement Under Vicarious Liability C. An “Arm’s Length” Relationship Is Not Sufficient for Vicarious Liability for Joint Infringement D. Every Act Corresponding to a Limitation of a Method Claim Must Be Performed in the United States in Order for a Method Claim to Be Infringed III. Section 271(e)(1) “Safe Harbor” A. The “Safe Harbor” Provision Is in Parallel with Patent Term Restoration of the Hatch-Waxman Act B. The Safe Harbor Covers Only Patents on Products Subject to FDA Regulatory Approval IV. Practice Points A. Be Aware of Indirect Infringement B. Direct Infringement Is Always Required For Indirect Infringement

189 189 190 196

200

203 209

209

210 211

213 214 215 217 224 224 225

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xviii

Detailed Contents C. Evaluating and Opining on Indirect Infringement Requires Claim Construction and a Direct Infringement Analysis D. Inducement to Infringe Under Section 271(b) Requires Proof of Specific Intent E. Active Inducement May Expose the Inducer to Personal Liability That Is Not Covered by Corporate Indemnities or Insurance F. Contributory Infringement Requires Knowledge of the Patent and the Resulting Infringement, but Intent Need Not Be Shown G. For Contributory Infringement, the Component Cannot Be a Staple Article or Commodity of Commerce Suitable for Substantial Noninfringing Use H. There Is a Split in the Federal Circuit as to Whether Infringement Under Section 271(f ) Applies to Method Claims I. “Components” Under Section 271(f ) Must Be Tangible Items J. To Infringe Under Section 271(f ), Components Must Be Supplied in or from the United States K. Products Under Section 271(g) Must Be Physical Products Made Abroad by a Method Patented in the United States; Knowledge Is Not a Product L. “Products” Under Section 271(g) Cannot Be “Materially Changed by Subsequent Processes or Become Trivial and Nonessential Components of Another Product” M. While Infringement Requires That a Single Party Infringe All Claim Limitations, Infringement May Occur Where One Party Infringes Less than All Limitations, but Directs or Controls the Acts of Another to Complete the Infringement N. An “Arm’s Length” Relationship between Parties Is Not Sufficient for Joint Infringement O. Be Aware of the Section 271(e)(1) “Safe Harbor” Exemption to Infringement P. Section 271(e)(1) Does Not Cover “Research Tools” That Themselves Are Not the Subject of FDA Regulatory Approval

225 225

226

226

226

227 227 227

227

228

228 228 229

229

CHAPTER 6 Patent Law Principle III: Validity: General Principles of

Anticipation and Anticipation by Printed Publication

231

I. General Principles of Anticipation A. Overview of Other Forms of Anticipation and Obviousness II. An Anticipation Analysis Requires a Comparison of the Construed Claims with the Prior Art III. The Invention Was Described in a Printed Publication More than One Year Before the Priority Date of a U.S. Patent (35 U.S.C. § 102(b))

234 235 236

237

Detailed Contents IV. Definition of “Printed Publication”—Public Accessibility V. Section 102(b) Printed Publication Prior Art Must Be Enabled A. Enablement of Prior Art May Be Evaluated by the Wands Factors B. Enablement for Prior Art Is a Lower Standard than Enablement for Validity Under 35 U.S.C. § 112, Second Paragraph C. When an Issued U.S. Patent Is a Section 102(b) Printed Publication, Prior Art Enablement Is Presumed D. Examples of Federal Circuit Enablement Analyses for Section 102(b) Printed Publication Prior Art VI. In Order to Anticipate, a Single Prior Art Publication Must Disclose, Explicitly or Inherently, Every Claim Limitation A. Inherent Anticipation B. Must Be One Reference C. A Reference Only Anticipates Subject Matter as Arranged in the Reference; One Cannot Pick and Choose to Make the Claimed Combination D. An Anticipatory Reference May Disparage the Invention or Teach Away from the Invention VII. Special Rules for Anticipation A. Means-Plus-Function Claims B. Product-by-Process Claims VIII. Practice Points A. Claim Construction Is Always Required B. Printed Publications Are Only Prior Art Under Section 102(b) if Publically Accessible More than One Year Before a Patent’s Effective Priority Date C. Printed Publications Become Prior Art Under Section 102(b) on the Date They First Become Publically Accessible D. A U.S. Patent or Patent Application’s Effective Priority Date is the Filing Date of Its Earliest Application to which Priority Is Claimed and That Fully Supports the Claimed Subject Matter E. Public Accessibility for Printed Publications Under Section 102(b) Is Fact-Specific F. “Printed Publications” Under Section 102(b) Can Be More than Printed Documents G. Printed Publications Under Section 102(b) Must Enable the Subject Matter They Anticipate H. Enablement for Section 102(b) Is Similar to Enablement for Patent Claims Under 35 U.S.C. § 112, First Paragraph, but Is Less Stringent I. Printed Publications Under Section 102(b) May Include Issued U.S. Patents J. Issued U.S. Patents Are Presumed Enabled

238 244 244

245 248 249

255 256 259

260 263 263 263 266 268 268

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269

269 270 270 270

270 271 271

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Detailed Contents K. A Single Prior Art Reference Must Disclose Every Claim Limitation Either Explicitly or Inherently L. Inherent Anticipation Must Necessarily Occur M. Inherency Does Not Need to Be Recognized in the Art N. To Anticipate, One Printed Publication Must Disclose All Claim Limitations O. The Disclosure in the Prior Art Must Exactly Anticipate the Claimed Subject Matter P. A Section 102(b) Printed Publication Is Prior Art for What It Discloses, Regardless of Any Comments or Suggestions Against the Claimed Invention Q. Issued Patents Are Presumed to Be Valid, and the Party Challenging the Validity of a Patent Bears the Burden of Proof R. If a Section 102(b) Printed Publication Was Considered by the Patent Office in the Prosecution History of a Challenged Patent, the Burden of Proving Invalidity Based on That Reference Is Increased S. Be Aware that Printed Publications May Contain Evidence of Prior Art Under Other Sections of 35 U.S.C. § 102, Including Evidence That Might Apply Less than One Year Before a Patent or Application’s Effective Priority Date T. Be Aware of Special Rules for Means-Plus-Function Claims U. Anticipation of Product-by-Process Claims Is Based Solely on the Product, Not the Process

271 271 271 272 272

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273 273 274

CHAPTER 7 Patent Law Principle III: Validity: Other Forms of

Anticipation

275

I. Summary of General Principles of Anticipation II. On Sale (Section 102(b)) A. Two-Point Test B. Experimental Use Negation III. Public Use (Section 102(b)) A. Definition of Public Use IV. Abandonment (Section 102(c)) V. Patenting Abroad (Section 102(d)) VI. Derivation (Section 102(f )) VII. Activities Prior to the Invention of the Patent (Sections 102(a), (e), and (g)) A. The Advantages of Relying on Section 102(b) Prior Art for Evaluations and Opinions of Invalidity, Especially for Third-Party Patents B. Evaluations and Opinions of Patent Invalidity Relying on Sections 102(a), (e), and (g) VIII. Other Forms of Anticipation IX. Practice Points

277 278 278 279 281 282 282 284 287 288

288 289 290 293

Detailed Contents A. The On-Sale Novelty Bar of Section 102(b) Must Be Established by a Two-Point Test B. The Experimental Use Negation C. Public Use Under Section 102(b) D. Patenting Abroad (Section 102(d)) Requires Issuance of a Patent, but Does Not Require That the Anticipating Subject Matter Be Claimed in a Patent, or that the Patent Be Publically Accessible E. Derivation Under Section 102(f) Requires Proof of Both Prior Conception by a Person Other than the Inventor and Communication of That Conception to the Inventor F. Use Caution in Evaluating and Opining on Parts of Section 102 That Require Proof of Invention (i.e., Sections 102(a), (e), and (g)) G. Be Aware of Other Forms of Anticipation CHAPTER 8 Patent Law Principle III: Validity: Obviousness I. Overview of Obviousness and Anticipation II. Section 103(a) (35 U.S.C. § 103(a)) A. The History of 35 U.S.C. § 103(a) B. 35 U.S.C. § 103(a) C. U.S. Courts’ Interpretation of 35 U.S.C. § 103(a) III. An Obviousness Analysis Requires a Comparison of the Construed Claims with the Prior Art IV. The Graham Factors V. Prior Art Under Section 103 A. Section 102 Prior Art That May Be Used for Obviousness B. Analogous Art Requirement C. An Obviousness Reference Is Prior Art for All That It Discloses; Enablement Is Not Required VI. “The Difference Between the Prior Art and the Claims” A. Motivation to Combine References—The TSM Test and the Supreme Court’s KSR Decision B. Obviousness as Explained by KSR C. Obvious to Try—Reasonable Expectation of Success D. Teaching Away—Unexpected Success E. Statements by the Patentee About the Prior Art VII. “Level of Ordinary Skill in the Pertinent Art” A. Factors to Be Considered in Determining the Level of Ordinary Skill in the Art B. Application of the Factors in Determining the Level of Ordinary Skill in the Art C. One of Ordinary Skill in the Art Is an Objective Fiction VIII. Objective Evidence of Nonobviousness: Secondary Considerations A. There Must Be a Nexus Between the Secondary Considerations and the Claimed Invention

293 293 293

294

294

294 294

295 298 299 299 299 300 301 301 302 302 305 307 307 308 310 311 317 318 320 320 320 322 323 323

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Detailed Contents B. Even the Strongest Evidence of Secondary Considerations May Not Overcome a Strong Obviousness Position C. Examples of Secondary Considerations IX. Section 103(c): Commonly Owned Prior Art and Patent or Patent Application X. Special Rules for Obviousness A. Means-Plus-Function Claims B. Product-by-Process Claims XI. Practice Points A. Claim Construction Is Always Required B. Obviousness Applies Whenever There Is No Anticipation C. The Graham Factors D. Prior Art Used For Obviousness Must Qualify as Prior Art Under Section 102 E. Prior Art That Qualifies Only Under Sections 102(e), (g), or (f) Is Not Prior Art Under Section 103 Where the Art and the Patent Being Analyzed Were Owned by the Same Person at the Time the Invention Was Made F. Prior Art Must Be Analogous Prior Art to Be Combined for Section 103 G. Prior Art Need Not Be Enabled for Section 103: It Is Art for All It Discloses H. The Teaching, Suggestion, Motivation Test (TSM Test) for Combining Prior Art for Section 103 Is but One of Many Tests; There Is No Requirement for Prior Art to Provide an Explicit Teaching, Suggestion, or Motivation to Combine I. Prior Art References May Be Combined for Section 103 on the Basis of Obvious to Try or a Reasonable Expectation of Success J. Teaching Away—Unexpected Success K. Statements by the Patentee About Prior Art Are Binding on the Patentee for Purposes of Obviousness L. For Determining Obviousness, Courts Must Define the Level of Ordinary Skill in the Pertinent Art M. One of Ordinary Skill in the Pertinent Art Is an Objective Fiction; the Actual Inventor’s Skill or Expectations Play No Part in an Obviousness Inquiry N. A Court Must Consider Evidence of Nonobviousness, but a Strong Position of Obviousness May Not Be Overcome by Any Level of Such Evidence O. There Must Be a Nexus between Evidence of Nonobviousness and the Claimed Invention P. Be Aware of Special Rules for Means-Plus-Function Claims Q. Obviousness of Product-by-Process Claims Is Based Solely on the Product, Not the Process

342

CHAPTER 9 Patent Law Principle III: Validity: Other Forms of Invalidity

343

I. Overview of Patent Validity/Invalidity II. Enablement, 35 U.S.C. § 112, First Paragraph

325 326 331 332 332 335 337 337 338 338 338

339 339 339

339

340 340 340 340

341

341 341 341

347 348

Detailed Contents A. The Full Scope of the Claimed Subject Matter Must Be Enabled B. The Wands Factors C. The Date of Enablement Is the Filing Date of the Patent Application D. The Specification Need Not Provide What Was Known in the Art E. The Specification Must Enable the Novel Subject Matter F. It Is Not Sufficient to Enable Only One Embodiment of a Claimed Invention When Broader Subject Matter Is Claimed G. There Is No Presumption Related to Failure of the Patent Office to Issue an Enablement Rejection H. Teaching Away in the Specification Is Strong Evidence Against Enablement III. Written Description, 35 U.S.C. § 112, First Paragraph A. The Written Description Is a Separate Requirement from Enablement B. One Must Describe the Subject Matter Claimed Such That One Skilled in the Art Would Recognize That the Patentee Was in Possession of the Claimed Invention When the Patent Application Was Filed C. No Particular Form of Description Is Required, But the Specification Must Describe What Was Invented D. The Written Description Requirement Is Not Satisfied by What Would Have Been Obvious from the Specification E. The Material Must Necessarily Be Present in the Specification, Explicitly or Inherently F. Courts Have Recognized the U.S. Patent Office’s Written Description Guidelines G. A Genus Must Be Described by a Representative Number of Species H. There Is No “Essential Element” Requirement for Written Description I. An Illustrative Example of the Written Description Requirement IV. Best Mode, 35 U.S.C. § 112, First Paragraph A. The Two-Prong Analysis B. The Best Mode Requirement Applies to the Claimed Invention C. Failure to Disclose the Preferred Embodiment D. Best Mode Does Not Apply to “Production Details,” Including Commercial Considerations, or to “Routine Details” Apparent to One of Ordinary Skill in the Art E. Summary V. Indefiniteness, 35 U.S.C. § 112, Second Paragraph A. The Definiteness Requirement Satisfies the Requirement That a Patent Give Public Notice of the Metes and Bounds of the Claimed Subject Matter

349 349 350 350 351 351 353 353 354 354

356 357 358 358 359 359 361 362 364 365 366 368

369 370 371

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Detailed Contents B. A Patent’s Claims Are Presumed Valid, and Indefiniteness Must Be Proven by Clear and Convincing Evidence C. The Definiteness Requirement Does Not Compel Absolute Clarity D. Claims Are Not Indefinite Merely Because They Present a Difficult Task of Claim Construction E. The Standard Rules of Claim Construction Apply to Determining Claim Definiteness F. Indefiniteness in the Context of Lack of Structure for Means-Plus-Function Claims G. Examples of Federal Circuit Definiteness Decisions VI. Patent-Eligible Subject Matter: Statutory Subject Matter (35 U.S.C. § 101) and Supreme Court Precedent A. Business Method Patents as an Example of a Section 101 Analysis (In re Bilski) VII. Practice Points A. Claim Construction Is Always Required B. Invalidity as Opposed to Unenforceability C. Section 112 of the U.S. Patent Statute (35 U.S.C. § 112) Contains at Least Four Separate Bases of Invalidity: Enablement (Section 112, First Paragraph), Written Description (Section 112, First Paragraph), Best Mode (Section 112, First Paragraph), and Definiteness (Section 112, Second Paragraph) D. Enablement Must Teach One Skilled in the Art to Practice the Full Scope of the Claimed Invention Without Undue Experimentation E. Use the Wands Factors for Evaluating Enablement F. Enablement Is Evaluated at the Effective Filing Date of the Patent’s Application G. A Specification Need Not Teach What Was Known in the Art H. A Specification Must Enable the Novel Subject Matter I. Generally It Is Not Sufficient to Enable Only One Embodiment Where the Claims Cover More than One Embodiment J. There Is No Presumption Related to Failure of the Patent Office to Issue an Enablement Rejection K. Evidence of Teaching Away from a Claimed Invention in a Patent’s Specification Is Strong Evidence of Lack of Enablement L. The Enablement Requirement Focuses on Whether the Specification Teaches One of Skill in the Art to Practice the Claimed Invention; Written Description Requires That a Patent’s Specification Describe the Invention Such That It Is Clear That the Patentees Possessed the Claimed Invention at the Time the Application Was Filed

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Detailed Contents M. Written Description Requires No Specific Form of Description N. Subject Matter That Is Only Obvious from a Specification Is Not Described Sufficiently to Satisfy the Written Description Requirement O. The Specification Must Describe, Explicitly or Inherently, Every Claim Limitation P. A Genus Must Be Described by a Representative Number of Species Q. Compliance with the Best Mode Requirement Is Based on a Two-Prong Analysis R. Best Mode Relates to the Claimed Invention S. Failure to Disclose the Preferred Embodiment Is a Violation of the Best Mode Requirement T. Claims Are Not Indefinite Merely Because They Are Difficult to Construe U. The Rules of Claim Construction Are Applied in Determining Definiteness V. Means-Plus-Function Claims Are Indefinite Under Section 112, Second Paragraph, if the Specification Does Not Describe a Structure for Performing the Claimed Function W. Section 101 and U.S. Supreme Court Precedent Define Patent-Eligible Subject Matter CHAPTER 10 Patent Law Principle IV: Enforceability I. Overview of Patent Unenforceability II. Special Concerns for Evaluations and Opinions of Patent Unenforceability III. Inequitable Conduct (Fraud on the Patent Office) A. Duty of Good Faith and Candor to the U.S. Post Office; Rule 56 B. Standard for Inequitable Conduct C. Materiality D. The Showings of Materiality and Intent Generally Are Separate Requirements E. Under Certain Circumstances Intent May Be Inferred from a Showing of Materiality F. Burden of Proof and “Elevated Standard of Proof in the Inequitable Conduct Context” G. After Proving Materiality and Intent by the “Threshold” of Clear and Convincing Evidence, a Court Must Still “Balance” the Levels of Materiality and Intent to Determine Whether a Holding of Inequitable Conduct and Patent Unenforceability Is Warranted H. Curing Unenforceability Due to Inequitable Conduct in Procuring a U.S. Patent

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Detailed Contents IV. Unenforceability Due to Patent Misuse A. Patent Misuse Arises When the Patentee Has Impermissibly Broadened the Scope of the Patent Grant with Anticompetitive Effect B. Patent Misuse Is a Broader Wrong Than an Antitrust Violation and Thus May Exist Where Antitrust Conditions Do Not C. Per Se Patent Misuse D. Actions That Statutorily Do Not Constitute Patent Misuse E. Patent Misuse That Is Not Per Se Misuse or Exempted Under Section 271(d) Is Determined by a Rule of Reason Analysis F. Curing Unenforceability Due to Misuse of an Issued U.S. Patent V. Practice Points A. Evaluations and Opinions of Patent Unenforceability Should Generally Be Avoided B. Distinguish between Invalidity and Unenforceability C. There Are Two Distinct Types of Patent Unenforceability: Inequitable Conduct (Fraud on the Patent Office) and Patent Misuse D. Inequitable Conduct Is an Intentional Breach of a Patent Applicant’s Duty of Good Faith and Candor to the U.S. Patent Office E. Proof of Inequitable Conduct Requires Clear and Convincing Evidence of Materiality and Intent F. Materiality Can Encompass Any Information Where There Is a Substantial Likelihood That a Reasonable Examiner Would Consider It Important in Deciding Whether to Allow the Application to Issue as a Patent G. Materiality and Intent Are Separate Requirements H. In Certain Situations, Intent May Be Inferred from Materiality I. Even Where Materiality and Intent Have Been Proven by Clear and Convincing Evidence, a Court Still May Not Find a Patent Unenforceable J. Inequitable Conduct May Only Be “Cured” If Done So in the Application (or a Related Application) Before a Patent Is Issued K. Patent Misuse Arises When a Patent Owner Impermissibly Broadens the Scope of the Patent Grant With Anticompetitive Effect L. Tying and Extending a Patent’s Term by Requiring Post-Expiration Royalties Is Per Se Misuse M. Section 271(d) of the Patent Statute Sets Forth Actions That Are Not Patent Misuse N. A Patent is Only Unenforceable Based On Patent Misuse Until the Misuse Is Cured

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Detailed Contents CHAPTER 11 Evaluating and Opining on Third Party Patents:

Patent Due Diligence for Mergers, Acquisitions, and Licensing

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I. Overview 416 A. Overview of Patent Due Diligence from the Perspective of the Acquiring Party 417 B. Role of Patent Evaluations and Opinions in Patent Due Diligence 417 II. Identify All Key Patents 418 A. Target Company’s Patents 419 B. Third Party Patents 420 C. Limiting Liability 421 III. Applying the Four Principles of Patent Evaluations and Opinions 422 A. Claim Construction 423 B. Infringement Evaluations and Opinions 425 C. Validity Evaluations and Opinions 427 D. Enforceability Evaluations and Opinions 430 IV. Verifying Ownership and Inventorship 432 A. Co-Inventors, Even of Only One Claim, Have Rights to Fully Exploit the Entire Patent Without Seeking Permission from or Accounting to the Other Co-Inventors 432 B. Representations and Warranties Regarding Inventorship 434 V. Reporting Considerations 435 A. What to Put in Writing 436 B. Limiting Liability 439 VI. Practice Tips 440 A. Patent Due Diligence for the Acquiring Company Typically Involves Both an Evaluation and Opinion of the Target Company’s Patents for Validity, Enforceability, Inventorship, and Ownership, and a Clearance (Freedom to Operate) Evaluation and Opinion of Third Party Patents 440 B. A Competent Evaluation and Opinion Is Critical Regarding the Validity, Enforceability, Infringement (Claim Scope), Inventorship, and Ownership of the Target Company’s Patents 440 C. Evaluating Inventorship, Ownership, and Transferability of Ownership of Target Company Patents Is Critical 443 D. Reporting Issues and Limiting Liability 443 CHAPTER 12 Evaluating and Opining on Third Party Patents:

Evaluations and Opinions of Patents for Clearance (Freedom to Operate), Noninfringement, Invalidity, and Unenforceability I. Overview of Evaluations and Opinions of Third Party Patents for Clearance (Freedom to Operate), Noninfringement, and Invalidity Purposes

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Detailed Contents II. Clearance Evaluations and Opinions A. Necessary Limitations on the Scope of Any Patent Clearance Evaluation and Opinion B. Use of the Term Clearance Evaluation and Opinion instead of Freedom to Operate C. Patent Searching D. Reporting and Limiting Liability III. Claim Construction Is Required for Evaluations and Opinions of Patent Noninfringement, Invalidity, and Unenforceability A. Claim Construction Is Essential to Virtually All Patent Evaluations and Opinions, Including Noninfringement, Invalidity, and Unenforceability B. Claim Construction Must Be Based on a Patent’s Intrinsic Evidence: The Claims, the Specification, and Its Prosecution History in the U.S. Patent Office, Including All Cited Prior Art IV. Noninfringement Evaluations and Opinions A. Obtain and Verify a Clear and Comprehensive Description of Technology to Be Practiced B. Infringement Evaluations and Opinions Must Consider Both Literal Infringement and Infringement Under the Doctrine of Equivalents C. Claim Construction Is Always Required D. Consider Possible Indirect Infringement E. Reporting Considerations V. Invalidity Evaluations and Opinions A. Claim Construction Is Always Required B. Consider All Possible Means of Invalidity, Including All Types of Anticipation, Enablement, Written Description, Best Mode, and Other Issues C. Every Claim Must Be Addressed in Invalidity Evaluations and Opinions D. Prior Art Searching E. Limiting Search-Related Liability F. Reporting Considerations VI. Enforceability Evaluations and Opinions A. Claim Construction Is Always Required B. Every Claim Need Not Be Addressed in Unenforceability Evaluations and Opinions C. Potential Weaknesses of Unenforceability Evaluations and Opinions D. Potential Unenforceability Issues E. Limiting Liability F. Reporting Considerations

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Detailed Contents VII. Practice Points A. Be Aware of Necessary Limitations on Any Patent Clearance Evaluation or Opinion and Expressly Include These in Writing B. Use the Term Clearance Evaluations and Opinions, Not Freedom to Operate C. Third Party Patent Searching Is Critical in Patent Clearance Evaluations and Opinions D. Claim Construction Must Be Done for Virtually Every Noninfringement, Invalidity, and Unenforceability Evaluation and Opinion E. Level of Certainty of Reporting F. Noninfringement Evaluations and Opinions Require a Clear, Definite Description of the Client’s Proposed Technology and Should Be Expressly Limited to This Subject Matter G. Patent Noninfringement Evaluations and Opinions Must Consider Both Literal Infringement and Infringement Under the Doctrine of Equivalents, As Well As Indirect Infringement H. Special Considerations for Invalidity and Unenforceability Evaluations and Opinions Performed in Patent Due Diligence for an Acquiring Company I. Issues Unique to Patent Unenforceability Evaluations and Opinions

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CHAPTER 13 Evaluating and Opining on Third Party Patent Rights:

Opinions for Avoiding Willful Infringement I. Overview: The Evolving Landscape Regarding the Legal Necessity of Opinions for Avoidance of Willful Infringement II. Willful Infringement and Enhanced Damages A. 35 U.S.C. § 284, Second Paragraph B. The Read Factors C. Advice of Counsel III. Underwater Devices: Duty of Care, Negligence IV. In re Seagate: Objective Recklessness V. Post-Seagate Federal Circuit Decisions and the Role of Opinions VI. Qualcomm: Inducement, Specific Intent, and the Role of Seagate A. Inducement of Infringement Requires Proof of Specific Intent B. Seagate Does Not Apply to Inducement: Opinion of Counsel Is Relevant to Inducement of Infringement VII. Practice Points A. The Remaining Importance of Opinions of Counsel Post-Seagate

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Detailed Contents B. Seagate Does Not Apply to Inducement of Infringement C. Conclusion: Opinions of Counsel Remain Important in All Cases of Potential Infringement

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CHAPTER 14 Evaluating and Opining on Third Party Patent Rights:

Prefiling Rule 11 and Section 285 Investigations in Declaratory Judgment Actions, ANDA Paragraph IV Certifications, Avoidance of Preliminary Injunctions, and Readiness in “Rocket Docket” Jurisdictions and ITC Investigations I. Overview II. Patent Evaluations and Opinions for Rule 11 and Section 285 Prefiling Investigations A. Rule 11 B. Role of Patent Evaluations and Opinions in Rule 11 Sanctions C. Section 285 D. Role of Patent Evaluations and/or Opinions in Section 285 Sanctions III. Patent Evaluations and Opinions for ANDA Paragraph IV Certifications A. Overview of the Hatch-Waxman Act B. ANDA Paragraph IV Certification C. Accountability for Proper ANDA Paragraph IV Certification IV. Patent Evaluations and Opinions for Avoiding Preliminary Injunctions A. Assessing the Likelihood of Success on the Merits Requires an Infringement and Validity Analysis V. Patent Evaluations and Opinions for Readiness in “Rocket Docket” Jurisdictions and ITC Investigations A. “Rocket Docket” Jurisdictions B. ITC Patent Infringement Investigations VI. Practice Points A. Prefiling Infringement Evaluations and Opinions Should Be Done to Comply with Rule 11 and Section 285 B. ANDA Paragraph IV Certification Requires a Competent Noninfringement and/or Invalidity Evaluation and Opinion C. A Noninfringement and/or Invalidity Opinion May Be Used to Avoid a Preliminary Injunction— But Try to Retain Separation of Opinion Counsel and Trial Counsel D. Beware of, and Be Prepared for, “Rocket Docket” Jurisdictions and ITC Investigations

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Detailed Contents CHAPTER 15 Evaluating and Opining on Third Party Patent Rights:

Prefiling Evaluations and Opinions for Ex Parte and Inter Partes Reexamination and Other Post-Grant Patent Challenges I. Reexamination II. Ex Parte Reexamination A. Role of Patent Evaluations and Opinions of Third Party Patents in Ex Parte Reexamination III. Inter Partes Reexamination A. Role of Patent Evaluations and Opinions of Third Party Patents in Inter Partes Reexamination IV. Citation of Prior Art A. Role of Patent Evaluations and Opinions for Citing Art Under Section 301 V. Coordination of Post-Grant Proceedings in Related Non-U.S. Patents VI. Citation of Court Decisions VII. Practice Points A. Prefiling Infringement Evaluations and Opinions Should Be Done Prior to Requesting Ex Parte or Inter Partes Reexamination B. Be Aware of the Differences Between Ex Parte and Inter Partes Reexamination C. Reexamination Must Be Based on Documentary Prior Art, but May Also Include, in Conjunction with Documentary Prior Art, Admissions by the Patentee in Prosecution or Court That Are Related to Other Bases for Invalidity D. Remember That Prior Art May Be Cited in the Prosecution History of an Issued Patent Without Requesting a Reexamination, but Use Caution E. It Is Important to Coordinate U.S. and Non-U.S. Post-Grant Challenges to Third Party Patents F. Remember to Cite Favorable Court Decisions in the Prosecution History of Third Party U.S. Patents of Interest

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SEC Considerations, Patent Audits, and a Businessperson’s Guide to Evaluations and Opinions of U.S. Patents I. Overview: Securities Issues (Including Sarbanes-Oxley Issues) and Patent Audits A. Limitations on Scope of Chapter II. Securities Issues in Patent Evaluations and Opinions A. Patent Evaluation and Opinion Issues That May Trigger Potential Liability Under U.S. Securities Laws

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Detailed Contents B. Specific Examples of Patent Issues and Securities Laws: Failure to Disclose Potentially Invalid Patent Rights C. Specific Examples of Patent Issues and Securities Laws: Misstatements About the Status of a Patent Application: Pending but Not Issued D. Specific Examples of Patent Issues and Securities Laws: Misstatements About the Status of a Patent Application: Application Finally Rejected and Abandoned E. Specific Examples of Patent Issues and Securities Laws: Misstatements and Omissions Concerning a Patent’s Claim Coverage F. Specific Examples of Patent Issues and Securities Laws: Misstatements and Omissions Concerning the Status of Patent Litigation G. Specific Examples of Patent Issues and Securities Laws: Misstatements and Omissions About a Patent Attorney’s Opinion H. Limiting Potential Securities Law Applicability and Potential Liability: Due Diligence Defense I. Limiting Potential Securities Law Applicability and Potential Liability: The “Bespeaks Caution” Doctrine III. Patent Audits and SEC Compliance A. Patent Rights Inventory B. Patent Valuation C. Considerations for Ongoing Compliance with Securities Laws for Material Patent Rights IV. Highlights of Competent Evaluations and Opinions of U.S. Patents for Business Professionals Who Rely on Them for Securities and Other Issues A. Minimum Requirements for Legally Competent Evaluations and Opinions of U.S. Patents V. Practice Points A. Patent Counsel Should Always Work Closely with Securities Counsel on Any Issues That May Involve Securities Laws or Regulations B. Patent Attorneys Should Be Aware of Situations That May Trigger Reporting Responsibilities Under the Sarbanes-Oxley Act C. Patent Counsel Should Be Aware of Issues That Could Trigger Potential Liabilities Under U.S. Securities Laws and Regulations D. Securities Laws Provide Some Means of Avoiding Liability E. Patent Audits Aid in Disclosure Compliance Under Securities Laws F. Highlights of Competent Evaluations and Opinions of U.S. Patents for Business Professionals Who Rely on Them for Securities and Other Issues

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Detailed Contents CHAPTER 17 Evaluating and Opining on One’s Own Patent Rights:

Evaluations and Opinions of Patentability for Potentially New Inventions I. Overview of Evaluations and Opinions of Patentability II. Avoid Negative Written Statements About a Client’s Intellectual Property, Such as Written Statements That Subject Matter Is or May Not Be Patentable III. The Claims Are Paramount: The Claims, and Only the Claims, Define the Patent Grant IV. Understand the Full Scope of the Invention A. Determine All Possible Aspects of an Invention, Including All Possible Embodiments V. Claiming the Invention A. Expressly Define Important Terms B. Construe Claims C. Assure That the Claims Are Definite, and That the Invention Is Capable of Description in Definite Terms D. Claim All Possible Inventions VI. Determining Patentable Subject Matter: A Reiterative Approach A. The Claims Must First Be Objectively Construed and Then Compared with the Prior Art or the Invention Disclosure to Determine Whether the Claims Are Patentable B. Anticipation C. Obviousness D. Specification-Based Lack of Patentability and Other Forms of Unpatentability E. Non-Statutory Subject Matter VII. Determine How Invention Fits with a Company’s Strategic Patenting Goals VIII. Other Issues of Importance to New Inventions A. Is the Inventorship Clearly Assignable to the Company? B. Investigate Potential Nonstatutory Obviousness-Type Double-Patenting Issues IX. Practice Points A. Avoid Expressing Doubts about Patentability in Writing B. Prior to Beginning Any Evaluation or Opinion of Patentability of a Potentially New Invention, It is Essential for the Reviewing Attorney to Obtain a Thorough Understanding of the Invention C. It Is Best if the Evaluating Attorney Can Work Closely with the Inventors Throughout the Evaluation Process D. A Patent Attorney May Guide the Inventors to Disclose Additional Aspects or Embodiments of Their Invention, but Must Not Become a Co-Inventor

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Detailed Contents E. Prior to Analyzing the Invention for Patentability, the Invention Must Be Claimed and the Claims Must Be Construed F. A Proper Patentability Evaluation or Opinion Ensures That the Invention Description Is Sufficient to Enable, Describe, and Define the Claimed Subject Matter G. Ask the Inventors about Best Mode and Assure That the Description of the Invention Enables the Best Mode H. Apply the Proper Law and Analysis I. Even if an Invention Is Patentable, There May Not Be a Reason to Obtain a Patent; Strategic Patenting Requires That a Patent Application Lead to a Useful Patent J. Consider Other Issues Such as Inventorship/Ownership and Potential Nonstatutory Obviousness-Type Double Patenting

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CHAPTER 18 Evaluating and Opining on One’s Own Patents:

Strategic Patenting, Including Patent Landscapes, Evaluations and Opinions of Claim Scope/Infringement, Validity, Enforceability, and Ownership I. Strategic Patenting and Patent Landscapes A. Patent Landscapes B. Strategic Patenting II. Claim Construction Is Required for Evaluations and Opinions of Patent Claim Scope/Infringement, Validity, Enforceability, and Ownership A. Claim Construction Is Essential to Virtually All Patent Evaluations and Opinions, Including Claim Scope/Infringement, Validity, Enforceability, and Ownership B. Claim Construction Must Be Based on a Patent’s Intrinsic Evidence: The Claims, the Specification, and Its Prosecution History in the U.S. Patent Office, Including All Cited Prior Art III. Claim Scope/Infringement Evaluations and Opinions A. For Infringement Determinations, Clearly Define the Potentially Infringing Subject Matter B. Claim Construction Is Always Required C. Infringement Evaluations and Opinions Should Consider Both Literal Infringement and Infringement Under the Doctrine of Equivalents D. Consider Possible Indirect Infringement E. Reporting Considerations IV. Validity Evaluations and Opinions A. Claim Construction Is Always Required B. Consider All Possible Means of Validity, Including All Types of Anticipation, Enablement, Written Description, Best Mode, and Other Issues

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Detailed Contents C. Every Claim Must Be Addressed in Validity Evaluations and Opinions D. Prior Art Searching E. Limiting Search-Related Liability G. Reporting Considerations V. Enforceability Evaluations and Opinions A. Claim Construction Is Always Required B. Not Every Claim May Need to Be Addressed in Evaluations and Opinions of Enforceability of Patents C. Potential Enforceability Issues D. Reporting Considerations VI. Evaluations and Opinions Regarding Patent Ownership A. Ownership of a U.S. Patent Is Based on Inventorship B. A Co-Inventor to Even One Claim (or His Assignee) Has Joint Ownership of the Entire Patent C. A Co-Owner Has the Right to Fully Exploit the Patent Without Requiring Permission From (or Accounting to) the Other Co-Owners D. Claim Construction Is Always Required E. Every Claim Must Be Addressed in Evaluations and Opinions of Ownership of Patents F. Potential Ownership Issues G. Correcting Split Ownership of U.S. Patents H. Correction of Inventorship Errors VII. Practice Points A. Patent Landscapes Are Flexible B. As a General Rule, Never Produce a Document That Indicates (Either Expressly or by Implication) That a Company Believes, Has Reason to Believe, or Should Believe, That Its Technology Infringes a Claim of a Valid and Enforceable Third Party Patent C. Strategic Patenting Coordinates a Company’s Actual, Commercial, Technology with Its Patenting Strategy D. In Strategic Patenting, Patenting Issues Can Direct Commercial Development E. When Outside Patent Counsel Is Used, Outside Counsel Should Be Informed of a Company’s Commercial Development, Both Current and Future, So That Its Patenting May Best Match the Company’s Commercial Technology F. Companies and Patent Counsel Should Avoid Blindly Patenting Anything Patentable G. Be Aware of Patent Applications and Patents Covering Early Stages of a Company’s Technology H. A Company’s Patent Portfolio Should Be Evaluated for Scope, Validity, Enforceability, and Ownership, and Errors Corrected Where Possible

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Detailed Contents CHAPTER 19 Evaluating and Opining on One’s Own Patent Rights:

Defensive Due Diligence, Pre-Sale and Pre-Licensing Evaluations and Opinions of Patents I. Overview of Defensive Due Diligence II. Initial Steps in Defensive Due Diligence: Audit of U.S. Patent Rights A. Timing of Patent Audits III. Clearance (Freedom to Operate), Infringement, Validity, and Enforceability Evaluations and Opinions for Defensive Due Diligence A. Patent Clearance (Freedom to Operate) Evaluations and Opinions B. Patent Infringement Evaluations and Opinions C. Evaluations and Opinions of Patent Validity D. Evaluations and Opinions of Patent Enforceability E. Evaluations and Opinions of Patent Ownership IV. Curing Potential Issues of Unenforceability A. Curing Unenforceability Due to Inequitable Conduct in Procuring a U.S. Patent B. Curing Unenforceability Due to Misuse of an Issued U.S. Patent V. Correcting Errors and Potential Invalidity in Issued Patents A. Reissue B. Reexamination C. Correcting Inventorship VI. Risk of Declaratory Judgment for Licensing Overtures VII. Avoiding Waiver of Attorney-Client Privilege and Work Product Immunity of Patent Opinions in Due Diligence A. Overview: Exercise Due Care with Attorney-Client Privilege and Work Product Immunity in Due Diligence B. Choice of Law for Waiver in Patent Due Diligence C. Disclosure of a Privileged Opinion to a Third Party May Result in Waiver of the Attorney-Client Privilege and Work Product Immunity of the Opinion D. Disclosure of a Privileged Opinion to a Third Party May Waive All Privileges Associated with the Opinion, Even If the Disclosure Is Confidential and Under a Confidentiality Agreement E. The Common Interest Doctrine F. Other Considerations When Disclosing Privileged Materials to Third Parties During Due Diligence VIII. Practice Points A. Refer to Chapters 18 and 12 for More Detailed Discussion B. Defensive Due Diligence Should Be Proactive C. Defensive Due Diligence Should Be Performed in All Situations

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Detailed Contents D. Defensive Due Diligence Should Work with Strategic Patenting, Including the Use of Patent Landscapes E. Use Defensive Due Diligence, Strategic Patenting, and Patent Landscapes to Identify Interested Buyers and Licensees F. Be Sure to Account for Licenses and Other Grants to Third Parties G. Companies Should Carefully Evaluate Which Patent Rights Should Be Sold or Licensed H. As a General Rule, Never Produce a Document That Indicates, Either Expressly or by Implication, That a Company Believes, Has Reason to Believe, or Should Believe That Its Technology Infringes a Claim of a Valid and Enforceable Third Party Patent I. Evaluate Patent Portfolios, Including Pending Patent Applications, for Potential Issues with Validity, Enforceability, and Inventorship (Ownership), and Make Corrections Where Necessary and When Allowed J. Play Close Attention to Patent Inventorship, Which Initially Determines Ownership K. Use Defensive Due Diligence to Comply with Representations and Warranties in Sale and Licensing of Patent Rights L. Use Caution in Licensing Overtures to Avoid Declaratory Judgment Actions M. Use Caution to Avoid Waiving Attorney-Client Privilege and Work Product Immunity of Patent Opinions

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Prefiling Rule 11 and Section 285 Investigations and Compliance, FDA Orange Book Patent Listing, Obtaining Preliminary Injunctions, and for Readiness in “Rocket Docket” Jurisdictions and ITC Investigations I. Overview II. Patent Evaluations and Opinions for Rule 11 and Section 285 Prefiling Investigations A. Rule 11 B. Role of Patent Evaluations and Opinions in Rule 11 Sanctions C. Section 285 D. Role of Patent Evaluations and Opinions in Section 285 Sanctions III. Patent Evaluations and Opinions for FDA Orange Book Patent Listing A. Overview of the Hatch-Waxman Act B. Determining Whether to List Patents in the FDA Orange Book and Whether to Sue for Patent Infringement upon a Third Party Filing an ANDA with a Paragraph IV Certification

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Detailed Contents C. Accountability for Proper Orange Book Listing D. Accountability for Initiating a Patent Infringement Suit for an ANDA Paragraph IV Certification IV. Patent Evaluations and Opinions for Obtaining Preliminary Injunctions A. Assessing the Likelihood of Success on the Merits Requires an Infringement and Validity Analysis V. Patent Evaluations and Opinions for Readiness in “Rocket Docket” Jurisdictions and ITC Investigations A. “Rocket Docket” Jurisdictions B. ITC Patent Infringement Investigations VI. Practice Points A. Prefiling Infringement Evaluations and Opinions Must Be Done to Comply with Rule 11 and Section 285 B. Determining Whether to List a Patent in the Orange Book Requires a Competent Infringement Evaluation and Opinion C. Determining Whether to Sue for Patent Infringement of an Orange Book-Listed Patent by an ANDA Paragraph IV Certification Requires a Competent Infringement Evaluation and Opinion to Comply with Rule 11 and Section 285 D. A Noninfringement and/or Invalidity Opinion is Necessary to Obtain a Preliminary Injunction E. Be Aware of the Possibility of Counterclaims of Patent Infringement F. Beware of, Be Prepared for, and if Desired Use “Rocket Docket” Jurisdictions and ITC Investigations

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Prefiling Evaluations and Opinions for Post-Grant Patent Corrections Including Reexamination, Reissue, Disclaimer, Certificates of Correction, and Other Issues I. Reexamination A. Role of Patent Evaluations and Opinions of Third Party Patents in Reexamination II. Reissue A. Role of Patent Evaluations and Opinions of Third Party Patents in Reissue III. Disclaimer A. Role of Patent Evaluations and Opinions in Section 253 Disclaimers IV. Certificates of Correction A. Role of Patent Evaluations and Opinions in Certificates of Correction V. Citation of Prior Art

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Detailed Contents A. Role of Patent Evaluations and Opinions for Citing Art Under Section 301 VI. Citation of Court Decisions VII. Practice Points A. Prefiling Infringement Evaluations and Opinions Should Be Done Prior to Requesting Reexamination B. Reexamination Must Be Based on Documentary Prior Art, but May Also Include, in Conjunction with Documentary Prior Art, Admissions by the Patentee (in Prosecution or Court) Related to Other Invalidity Bases C. Prefiling Infringement Evaluations and Opinions Should Be Done Prior to Requesting Reissue, Including Paying Close Attention to the Limitations on Reissue, Including the Recapture Rule D. Broadening Reissue Applications Must Be Filed Within Two Years of Issuance of the Original Patent E. Where Possible, Disclaimer Considerations Should Be Coordinated with Broadening Reissue Requirements F. Use Caution and Careful Prefiling Evaluation and Opinion Before Disclaiming Under Section 253 G. Certificates of Correction Should Only Be Used in Appropriate Circumstances and Never as Substitutes for Other Post-Issuance Correction Means H. Remember That Prior Art May Be Cited in the Prosecution History of an Issued Patent Without Requesting a Reexamination or Reissue, but Use Caution I. Remember to Cite Favorable Court Decisions in the Prosecution History of One’s Own Patents J. Correction of a Patent by the U.S. Patent Office Does Not Ensure Validity of the Correction in Court

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CHAPTER 22 Evaluating and Opining on One’s Own

Patent Rights: Evaluations and Opinions of Patents in Bankruptcy and Related Issues I. Overview of U.S. Patents and Bankruptcy II. Limitations on Scope of Chapter III. Initial Steps in Bankruptcy: Audit of U.S. Patent Rights A. Patent Rights Inventory B. Maintain Patent Rights C. Patent Valuation IV. Clearance (Freedom to Operate), Infringement, Validity, and Enforceability Evaluations and Opinions of Patents in Bankruptcy Cases A. Patent Clearance (Freedom to Operate) Evaluations and Opinions B. Patent Infringement Evaluations and Opinions

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V.

VI. VII.

VIII.

C. Evaluations and Opinions of Patent Validity D. Evaluations and Opinions of Patent Enforceability E. Evaluations and Opinions of Patent Ownership Special Patent Issues in Bankruptcy I: Assuming or Rejecting Patent Licenses A. Debtor as Licensee B. Debtor as Licensor: The Intellectual Property Bankruptcy Act of 1988 (11 U.S.C. § 365(n)) Special Patent Issues in Bankruptcy II: Effect of Bankruptcy on Security Interests in U.S. Patents Special Patent Issues in Bankruptcy III: Do Not Separately Distribute Exclusionary (Ownership) Rights in a U.S. Patent from the Right to Sue for Infringement of the Patent Practice Points A. Limitations on Scope of Chapter B. U.S. Patent Counsel Should Work with Bankruptcy Counsel on Bankruptcies Involving Companies Owning or Licensing U.S. Patent Rights C. A First Step in Any Bankruptcy Case of a Company Owning or Licensing Patent Rights Should Be a Patent Audit D. Patent Audits Should Include Issued and Enforceable Patents as Well as Other Patent Rights E. Patent License Should Be Characterized in Detail F. Patent Ownership Should Be Investigated in Detail G. The Bankruptcy Debtor’s Patent Attorneys Should Maintain the Company’s Patent Rights H. Use Evaluations and Opinions of U.S. Patents to Create a Patent Landscape from Which to Identify Third Parties That Might Be Especially Interested in Purchasing the Debtor Company’s Patent Rights in Liquidation I. Be Aware of Special Issues in U.S. Bankruptcy Law That Apply to U.S. Patent Rights, Including Executory Contract Issues for Patent Licenses J. Be Aware of Perfection Issues for Security Rights in U.S. Patents K. Be Aware of Special Issues in the Distribution of Patent Rights

799 799 800 801 803 810 818

823 826 826

826 827 827 827 828 828

829

829 829 830

CHAPTER 23 Competency of, and Reliance on, Opinions for

Avoiding Willful Infringement I. Requirements for a Competent Opinion A. The Opinion Need Not Be Correct B. Opinion Must Not Be Incompetent on Its Face: Bald, Conclusory, Unsupported C. Review of the Complete Prosecution History D. Claim Construction E. Proper Application of Law to Facts

831 833 835 835 837 838 839

Detailed Contents F. G. H. I. J. K. L.

The Preparer of the Opinion Level of Certainty Opinions Should Be Written Timing of Opinions Noninfringement Opinions Invalidity Opinions A Competent Opinion Need Not Address Both Noninfringement and Invalidity M. Special Concerns for Evaluations and Opinions of Patent Unenforceability II. Reliance on Opinions III. Practice Points A. Patent Counsel Should Not Be A Technical Expert B. Qualifying the Technical Expert C. All Opinions and Conclusions Should Be Clearly Based on Law and Fact D. Be Certain the Law Is Up-to-Date and Is Properly Applied E. Be Certain the Opinion Includes All Necessary Content for “A Competent Opinion” F. Legal Opinions Should Be Expressed Based on “What a Reasonable Court” Should Hold, Not on What the Opinion Drafter “Believes” G. Level of Certainty and Disclaimers H. Alternative Theories I. Inform Opinion Recipient of Need for Recipient Reliance J. Be Certain to Cover All Relevant Claims

840 841 842 842 843 844 845 846 847 850 850 850 851 851 852

852 852 853 853 853

CHAPTER 24 Waiver of Attorney-Client Privilege and Work

Product Immunity

855

I. Attorney-Client Privilege and Work Product Immunity II. Attorney-Client Privilege and Waiver Generally A. Waiver of Attorney-Client Privilege III. Work Product Immunity and Waiver Generally A. Waiver of Work Product Immunity IV. Attorney-Client Privilege and Reliance on Opinions of Noninfringement and/or Invalidity to Avoid Willful Infringement A. Attorney-Client Privilege Waived for All Opinion-Related Communications with Opinion Counsel B. Attorney-Client Privilege Not Waived for Communications with Trial Counsel Where Trial Counsel Is Separate from Opinion Counsel C. Importance of Maintaining Separate Opinion and Trial Counsel V. Work Product Immunity and Reliance on Opinions of Noninfringement and/or Invalidity to Avoid Willful Infringement

857 857 858 859 860

862 863

864 867 868

xli

xlii

Detailed Contents A. Work Product Waiver Is More Flexible and Less Broad than Waiver of Attorney-Client Privilege B. In re Echostar: Waiver of Work Product Immunity Does Not Extend to Subject Matter Not Communicated to the Client C. In re Seagate: Work Product Immunity Not Waived for Communications with Trial Counsel Where Trial Counsel Is Separate from Opinion Counsel D. Importance of Maintaining Separate Opinion and Trial Counsel VI. Waiver of Attorney-Client Privilege and Work Product Immunity of Opinions of Counsel in Due Diligence A. Overview: Exercise Due Care with Attorney-Client Privilege and Work Product Immunity in Due Diligence B. Choice of Law for Waiver in Patent Due Diligence C. Disclosure of a Privileged Opinion to a Third Party May Result in Waiver of the Attorney-Client Privilege and Work Product Immunity of the Opinion D. Disclosure of a Privileged Opinion to a Third Party May Waive All Privileges Associated with the Opinion, Even if the Disclosure Is Confidential and Under a Confidentiality Agreement E. The Common Interest Doctrine F. Other Considerations When Disclosing Privileged Materials to Third Parties During Due Diligence VII. Practice Points A. Reliance on an Opinion of Counsel of Noninfringement and/or Invalidity to Counter Willful Infringement in Litigation Waives Only Certain Attorney-Client Privileges and Work Product Immunities Associated with the Opinion B. The Importance of Maintaining Separate Opinion and Trial Counsel C. Exercise Extreme Caution in Disclosing Attorney-Client Privileged and Work Product Protected Materials to Third Parties, Even in Due Diligence Investigations

869

869

873 876 876 877 877

879

880 882 888 890

890 891

891

APPENDIX A Sample Outline of Noninfringement and

Invalidity Opinion

895

APPENDIX B Sample Outline of Noninfringement Opinion

925

APPENDIX C Sample Outline of Invalidity Opinion

943

CASE, STATUTE, AND RULE INDEX

969

SUBJECT MAT TER INDEX

1005

About the Author

Dr. David Fox maintains an active international practice of client counseling and strategic advice on all areas of intellectual property law, including opinions and evaluations of patents, IP due diligence, strategic patenting, licensing, litigation, and prosecution in wide range of technologies including biotechnology. David’s experience extends from practicing intellectual property law to scientific publishing and research in the areas of molecular biology, cancer biology, immunology, microbiology, biotechnology, and agriculture. Prior to practicing law, David received a Ph.D. in Microbiology from Columbia University. An overview of representative matters bears out the diversity of his work and his accomplishments. David’s current caseload includes representing international, U.S., and European pharmaceutical, biotechnology, medical device, scientific instrument, and alternative energy companies in all aspects of intellectual property law, including opinions and evaluations of patents, due diligence in mergers and acquisitions, licensing, and strategic patenting. David is a dedicated lawyer and an active participant in industry and community service organizations, experienced in serving in leadership positions with the American Bar Association, AIDS Law of Louisiana, The Nature Conservancy, and Legacy Community Health Services. He has demonstrated time and again the ability to balance sometimes competing demands on his time and yet remain focused on his mission: “Conscientious counsel who believes a personal relationship with the client is essential.” A Senior Counsel in Fulbright & Jaworski L.L.P.’s Houston location, David has received several fellowships and awards, both in law and science. Through his practice, as well as his writing and speaking engagements, David addresses issues that are of vital importance to owners of intellectual property as well as those confronting intellectual property rights of others. He has authored numerous papers and chapters on patent law. For more information, visit www.fulbright.com/dfox. Comments and suggestions on this treatise are welcomed and may be made to the author by email at [email protected] or [email protected] or by phone at 713-651-8231 or 713-416-6082. David resides in Houston, Texas, with his partner of more than 20 years (with whom he shares a love of global travel), two cats, and a dog named Junie B.

xliii


Acknowledgments

Many people made this work possible and I express my sincere gratitude to each of these wonderful people. To name but a few, I thank my friends and colleagues at Fulbright & Jaworski L.L.P., including the members of the Intellectual Property and Technology Section, Tom Paul, Richard Zembek, David Parker, Jim Repass, Charles Walker, Tom Godbold, Hon. Helen Berrigan, Laura McMahan, Evelyn Biery, David Rosenzweig, Robert deButts, Zack Clement, Albert Kimball, Lester Hewitt, David Clonts, Gregory Hasley, Greg Smith, Chris Crawford, Michael Fogarty, Ed Steakley, Glynn Lunney, Geri Field, Matt Gallaway, John May, Ellen Delap, Lisa Weaver, and Clyde Katz.

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CHAP T ER

1 Evaluations and Opinions of U.S. Patents Overview

I. How to Use This Treatise/Highlights of the Treatise

3

A. If You Read Only One Chapter in Its Entirety, It Should Be This Chapter

3

B. This Treatise Is Expressly Limited to U.S. Patents and U.S. Law

3

C. Usage Notes and Footnotes

4

D. Practice Points

4

E. A Businessperson’s Guide to Evaluations and Opinions Regarding U.S. Patents

4

F. Patent Issues in Bankruptcy

7

G. Securities Issues and Patent Rights

8

H. Strategic Patenting

9

II. Overview of Evaluations and Opinions of U.S. Patents

10

III. The Four Patent Law Principles That Apply to Evaluations and Opinions of U.S. Patents

11

A. Claim Construction: The Paramount Principle 1. Claim “Construction”

11 14

B. Infringement

15

C. Validity

16

D. Enforceability

18

IV. Evaluations and Opinions of Third Party Patent Rights

20

A. Evaluating and Opining on Third Party Patent Rights for Patent Due Diligence

20

B. Evaluating and Opining on Third Party Patent Rights for Clearance (Freedom to Operate), Noninfringement, and Invalidity

21

C. Evaluating and Opining on Third Party Patent Rights to Avoid Willful Infringement

21

1

2

Chapter 1 Evaluations and Opinions of U.S. Patents D. Evaluating and Opinion on Third Party Patent Rights for Prefiling Rule 11 and Section 285 Investigations in Declaratory Judgment Actions, ANDA Paragraph IV Certifications, Avoidance of Preliminary Injunctions, and Readiness in “Rocket Docket” Jurisdictions and ITC Investigations

22

E. Evaluating and Opining on Third Party Patent Rights for Due Diligence Prior to Post-Grant Challenges

23

V. Evaluating and Opining on One’s Own Patent Rights

23

A. Evaluating and Opining on One’s Own Patents for SEC Considerations, Including Patent Audits

24

B. Evaluating and Opining on One’s Own Patents for Patentability Determinations

24

C. Evaluating and Opining on One’s Own Patent Rights for Strategic Patenting (Including Patent Landscapes)

24

D. Evaluating and Opining on One’s Own Patent Rights Prior to Sale or Licensing: Defensive Due Diligence

25

E. Evaluating and Opining on One’s Own Patent Rights for Due Diligence Prior to Enforcement Actions, Including Rule 11 Prefiling Investigations, FDA Orange Book Listing Considerations, Preparations for Obtaining Preliminary Injunctions, and Readiness in “Rocket Docket” Jurisdictions and ITC Investigations

25

F. Evaluating and Opining on One’s Own Patent Rights Before Post-Issuance Proceedings

26

G. Evaluating and Opining on One’s Own Patent Rights in Bankruptcy Cases

26

VI. Legal Competency of (and Reliance on) Opinions to Avoid Willful Infringement

26

VII. Waiver of Attorney–Client Privilege and Work-Product Immunity Issues with Evaluations and Opinions of U.S. Patents

27

VIII. Sample Outlines of Noninfringement and Invalidity Opinions

27

IX. Detailed Subject Matter Index and Case, Statute and Rule Index

27

How to Use This Treatise/Highlights of the Treatise 3

I. How to Use This Treatise/Highlights of the Treatise This treatise is written with the understanding that most readers will use it primarily for information on specific topics and issues that they will access from the Subject Matter Index or the Table of Contents. The readers will then study a specific topic or issue until they obtain the information necessary to complete their research or reach the point where they can embark on more detailed research into a specific topic or issue. Accordingly, each section of the chapters of this book is written to be as complete as possible on the topics and issues it covers, with references to other chapters and sections as necessary. To a certain extent, some redundancy is unavoidable and intentional to save readers from having to access multiple sections of the book to research a single topic or issue.

A. If You Read Only One Chapter in Its Entirety, It Should Be This Chapter As typical readers will use this treatise primarily for information on specific topics or issues, they may not read the entire book from beginning to end (and likely not on a single occasion). This chapter provides a concise summary of the entire contents of this treatise so readers can obtain a general understanding of all the topics and issues discussed in detail in the following chapters.

B. This Treatise Is Expressly Limited to U.S. Patents and U.S. Law The subject matter of this treatise is expressly limited to U.S. patents and U.S. law in order to concentrate on a single body of law and a single patent system. Generally, each country has its own patent laws and its own patent office (or the equivalent) that examines and issues patents. In addition, under certain treaties and conventions multiple countries cooperate in certain aspects of the patenting process. These include the Patent Cooperation Treaty (PCT) patent applications under the auspices of the World Intellectual Property Organization (WIPO) and European patent applications and patents under the auspices of the European Patent Office. Ultimately however, each country issues its own patents and enforces them under its own patent laws. Further, non-U.S. patent laws and patenting requirements can differ significantly from U.S. patent laws and patenting requirements. Thus to maintain a sharp focus, this book addresses only U.S. patent laws and patenting requirements.

4

Chapter 1 Evaluations and Opinions of U.S. Patents

However, when significant non-U.S. patent issues arise in specific situations covered by this book, these issues are noted to alert readers of the need to address them. Furthermore—and very significantly—attorneys and agents licensed to practice only in the United States should never advise on any non-U.S. patent issues or laws, including but not limited to providing evaluations or opinions regarding non-U.S. patent rights. Whenever there is a need to address nonU.S. patent issues or laws of any kind (and to any extent), U.S. counsel must seek the advice of competent counsel duly registered in the country of the specific patent or law at issue.

C. Usage Notes and Footnotes The introductory pages of each chapter contain “Usage Notes” directing the reader to other chapters of this book that cover related topics and issues. For the convenience of the reader, the footnotes in each chapter begin with full case and other citations and follow The Bluebook (18th ed.) rule of requiring full citations for any case not cited within the previous five footnotes. Therefore, readers never need to look far to find the full citation for a case or other reference.

D. Practice Points Each chapter concludes with “Practice Points” designed to emphasize and reinforce the aspects of the chapter that are the most pertinent to the practical application of the laws and issues discussed. These should assist readers in applying the legal concepts of the chapter to the practical aspects of the practice of law. Further, these provide an important summary of key issues and concepts of the chapter.

E. A Businessperson’s Guide to Evaluations and Opinions Regarding U.S. Patents One of the unique and useful aspects of this treatise for non-patent law practitioners (including non-attorneys) is the “Businessperson’s Guide to Evaluations and Opinions of U.S. Patents” (presented in Section IV of Chapter 16). Often, individuals who must rely on evaluations and opinions of U.S. patents and patent rights for various reasons are businesspeople who are not patent attorneys or even attorneys at all. For example, U.S. courts generally hold that a company’s decision makers are the ones who must understand and rely on advice of counsel of patent


noninfringement or invalidity in order to avoid engaging in willful infringement (as discussed in Chapter 13). Additionally, a company’s management (including senior management) and auditors are the individuals who must understand and rely on evaluations and opinions regarding a company’s patent rights for SEC-issuer companies. This includes situations in which disclosures about patent rights are made in reports or registration statements filed with the SEC or in which value is assigned to patent rights reflected in the assets on a company’s balance sheet that are included in such reports or registration statements. This includes compliance with SEC Regulation S-K, Item 101(c)(iv), which expressly requires that when an issuer company has patent rights that are material, the description of the issuer’s business in registration statements filed under the Securities Act or in periodic reports filed under the Exchange Act must discuss the importance, duration, and effect of all patent rights and licenses held by the company. This may further include senior management’s duties of compliance with the financial reporting requirements of the Sarbanes-Oxley Act when a company’s patent rights are material to the company’s SEC-related financial reports (see Chapter 16 for all SEC-related issues). Furthermore, a company’s business and technical managers must understand and rely on evaluations and opinions of both the company’s and third parties’ patents and patent rights in making decisions regarding the company’s strategic patenting, research and development, and product development (see Chapter 18 for strategic patenting). Additional situations in which businesspeople must understand and rely on evaluations and opinions of patent rights include patent due diligence both for acquiring companies (see Chapter 11) and target companies (see Chapter 19), bankruptcy (see Chapter 22), FDA-related matters such as ANDA Paragraph IV Certifications and Orange Book listings (see Chapters 14 and 20), and pre-litigation investigation duties, such as compliance with Rule 11 (see Chapters 14 and 20). The “Businessperson’s Guide to Evaluations and Opinions of U.S. Patents” in Section IV of Chapter 16 provides a summary of important information about evaluations and opinions of U.S. patents for business professionals who must understand and rely on these materials. This information is intended to help business professionals better understand evaluations and opinions of U.S. patents so that they may better determine whether they may comfortably and confidently rely on them in various matters. The “Businessperson’s Guide to Evaluations and Opinions of U.S. Patents” also includes a discussion of U.S. court opinions that have discussed the minimum requirements noninfringement or invalidity opinions must meet to be considered legally competent so that businesspeople may rely on them to avoid willful infringement claims (see Chapter 13 for the use of opinions of noninfringement or invalidity to avoid willful infringement). Although most court decisions addressing the legal competency of evaluations and opinions of U.S. patents have been in the context of opinions to avoid willful

6


infringement, it is reasonable to assume that the minimum requirements for a legally competent opinion in this context should also apply to reliance on evaluations and opinions of patent rights in other contexts, including each of those listed above. Briefly, the minimum requirements of a competent opinion include: 1. that an opinion not be conclusory and unsupported;1 2. that any evaluation or opinion addressing anything to do with a patent’s claims (which includes virtually every kind of patent evaluation and opinion) properly construes the patent’s claims. Generally, competent opinions expressly construe every term of the patent’s claims (even if only to note that some terms have their ordinary meaning as known in the relevant art). Furthermore, the construction must be based on the proper evidence, including the patent’s specification and the complete history of the patent application in the U.S. Patent Office (even if only to note that the history of the application in the U.S. Patent Office did not shed light on the meaning of the claims); 3. that the opinion discuss the up-to-date and relevant law, and clearly and correctly apply the law to the facts to reach the conclusions of the evaluation or opinion. A businessperson relying on a patent evaluation or opinion may not be able to determine whether the proper and most up-to-date law is discussed and applied. Nevertheless, a competent opinion should allow any reader to at least easily understand that all of the conclusions are clearly based on the application of the law discussed in the opinion to the relevant facts; 4. that the preparer of the opinion is competent to render the opinion. Generally, an evaluation or opinion of a U.S. patent should be prepared by a competent patent attorney who is licensed in the United States (and registered with the U.S. Patent and Trademark Office) and who has no interest in the outcome of any issues discussed in (or even just related to) the opinion. While not necessarily dispositive, it is generally preferable for an evaluation or opinion to be prepared by independent outside counsel as opposed to in-house counsel; 5. that the opinion conclude with a reasonable degree of certainty, although overly certain opinions may be suspect;2

1. Read Corp. v. Portec, Inc., 970 F.2d 816, 829 (Fed. Cir. 1992) (“A written opinion may be incompetent on its face by reason of its containing merely conclusory statements without discussion of facts or obviously presenting only a superficial or off-the-cuff analysis.”). 2. Id. at 829 n. 9 (“An opinion of counsel, of course, need not unequivocally state that the client will not be held liable for infringement. An honest opinion is more likely to speak of probabilities than certainties.”); Westvaco Corp. v. Int’l Paper Co., 991 F.2d 735, 744 (Fed. Cir. 1993) (in finding reasonable reliance on an opinion to avoid willful infringement, the court noted “[i]ndeed, counsel’s opinion letters in this case spoke in terms of probabilities. For example,


6. that the evaluation or opinion be in writing; 7. that to avoid willful infringement, opinions of noninfringement or invalidity be delivered prior to the beginning of the potentially infringing activity even if only verbally, with a written opinion following and confirming the initial verbal opinion. Additionally, opinions regarding compliance with U.S. securities laws should be delivered no later than the time they are needed for proper reliance, as opinions issued after the fact are generally not sufficient for purposes of complying with U.S. securities laws;3 8. that evaluations and opinions of noninfringement: (a) take into consideration literal infringement, or if there is no literal infringement, consider infringement under the doctrine of equivalents; (b) accurately describe the potentially infringing product or process; (c) compare the construed claims (i.e., rather than the patentee’s commercial embodiment) with the potentially infringing product or process; and (d) address at least every independent claim; and 9. that evaluations and opinions of invalidity: (a) compare the construed claims with the prior art (preferably with prior art not considered by the Patent Office in the examination of the application), other potentially invalidating events (such as an item sold in the United States), and the support for the claims provided by the patent’s specification; (b) address every claim; and (c) in determining obviousness, consider indicia of nonobviousness to the extent such information is known or knowable as of the date of the opinion.

F. Patent Issues in Bankruptcy Another important and unusual feature of this treatise is a full chapter with an extensive discussion of patent issues in bankruptcy. In today’s technological age, U.S. patent rights are one of American industry’s most valuable assets. Accordingly, when companies file for reorganization or liquidation, the proper handling of their patent rights is of utmost importance. Chapter 22 covers this issue in detail. For example, the chapter indicates that bankruptcy counsel should work closely with patent counsel in reorganizations or liquidations of any company having patent rights as an asset. Prompt action by patent counsel at the onset of filing—and careful coordination between patent and

the final version of the ’575 opinion letter stated that ‘it was more likely than not’ that the claims would be held invalid over the prior art”). 3. E.g., Pommer v. Medtest Corp., 961 F.2d 620, 623 (7th Cir. 1992) (the fact that an event later occurred was not a defense to a company’s misrepresentation at the time of a securities statement that an event had occurred, when at the time of the statement the event had not occurred and the company did not know whether the event would occur).

8


bankruptcy counsel throughout a case—can help assure that a company’s patent rights are either retained as valuable assets in the reorganization or receive maximum value in liquidation. Thorough evaluations and opinions of a company’s patent rights (including analyses of their validity, infringement and scope, enforceability, and inventorship and ownership issues—as well as evaluations and opinions of relevant third party patents) can assist in attaining maximum value for a company’s patent assets. One way to increase the value of a company’s patent assets is by identifying potential buyers who have especially strong interests in acquiring the rights, such as third parties whose desired activities may be affected by those rights. Another method is determining whether the debtor company has two or more competitors who might want to obtain exclusivity by purchasing the debtor’s patent rights, thus leading to competing offers that may significantly enhance the value of the debtor’s patent rights. The bankruptcy coverage also addresses issues in bankruptcy having particular relevance to U.S. patent rights, including those related to patent licensing and the handling of patent licenses as executory contracts under Section 365 of the U.S. Bankruptcy Code. There is an extensive discussion of the assumption and rejection of patent licenses by debtor licensees under Section 365 and election of retention of license rights by non-debtor licensees under the Intellectual Property Bankruptcy Act of 1988, including the implications of these actions from the point of view of both debtor and non-debtor licensees and licensors.

G. Securities Issues and Patent Rights Yet another important and unusual feature of this treatise is a full chapter that extensively covers U.S. securities laws and their relationship to U.S. patent rights. Chapter 16 analyzes the multiple intersections of U.S. securities laws with U.S. patent rights, including how to avoid or address situations in which patent practitioners can inadvertently become subject to liability under U.S. securities laws. For example, the chapter presents evaluations and opinions regarding a company’s patent rights and how they might be affected by third party patent rights, with the analysis being performed to aid in compliance with SEC disclosure requirements. This may include situations in which disclosures regarding an SEC issuer’s patent rights are made in reports or registration statements filed with the SEC, or in which the value assigned to those patent rights is reflected as assets on the company’s balance sheet and included in such reports or registration statements. These may also include evaluations and opinions of patent rights for compliance with SEC Regulation S-K, Item 101(c)(iv), which expressly requires as to material patent rights that the issuer describe its business in registration statements filed under the Securities Act


or in periodic reports filed under the Exchange Act and discuss the importance, duration, and effect of all patents and licenses held by the company. Further still, these may include evaluations and opinions of patent rights to aid in the financial reporting requirements of the Sarbanes-Oxley Act where a company’s patent rights are material to the company’s SEC-related financial reports. Chapter 16 also provides examples of situations in which patent counsel to an SEC issuer company commits certain acts that may expose counsel to liability under securities laws or require reporting by counsel under securities laws such as the Sarbanes-Oxley Act. In certain instances described in Chapter 16, a patent attorney can become potentially liable under certain U.S. securities laws even when the attorney has no idea that securities liability may be a possibility. In addition to alerting patent counsel to situations in which they could unwittingly become liable under securities laws, the chapter also discusses ways by which counsel can avoid this potential liability. The chapter further addresses in detail U.S. cases whose courts have considered issues pertaining to disclosures (or omissions) related to patent rights that have led to either potential or actual liability under U.S. securities laws. These cases illustrate the need for patent counsel to be knowledgeable about potential securities issues related to evaluations and opinions of U.S. patents. They also emphasize the importance of patent counsel working closely with securities counsel whenever any actual or potential securities issues may arise.

H. Strategic Patenting This treatise includes a full chapter devoted to the topic of strategic patenting (Chapter 18), as well as several chapters covering related issues, including determining the patentability of potentially new inventions (Chapter 17), challenges to third party patents (Chapters 14 and 15), clearance evaluations and opinions (Chapter 12), defensive due diligence (Chapter 19), corrections to a company’s own patents (Chapters 10 and 21), and issues related to patent scope, validity, inventorship, ownership, and enforceability (Chapters 2–10). Strategic patenting involves evaluations and opinions of a company’s current and potential patent rights (as well as and third party current and potential patent rights) in specific areas of technology, including a company’s current and potential commercial technology. Evaluations and opinions are used to prepare “patent landscapes” that describe the patented and patentable aspects of a given technology. Patent landscapes, in combination with the concepts of strategic patenting (as discussed extensively in Chapter 18 and related chapters), can significantly aid companies in coordinating and maximizing their patent positions to best protect their current and future commercial technologies while obtaining patent-related leverage over their competitors.

10


II. Overview of Evaluations and Opinions of U.S. Patents Intellectual property rights are one of the most important—and growing— global assets. It is expected they will become even more important, especially to developed nations such as the United States. Due to the rapid increase in technology in the United States, patent rights are among the most important and valuable intellectual properties in the country. As the United States continues to develop more technology at an ever-increasing rate, patent rights and related issues are expected to continue to grow in scope and significance as well as complexity. A fast-growing part of today’s world, from businesses to universities and beyond, owns or is affected by U.S. patent rights. Determining the role those patent rights play in today’s and tomorrow’s world is of critical importance. The significance of patent rights is amplified by the fact that in addition to protecting the inventions of patent owners, patents allow owners to potentially block the actions of others who may be infringing their patents, even in situations in which the owners do not practice (or license others to practice) their patented inventions. Therefore, it is increasingly important to understand the ways in which U.S. patent rights affect various aspects of our society. However, because patent rights by definition cover “intellectual property inventions,” it is often difficult to precisely determine the meaning and scope of patent rights. This is due in large part to patents often requiring complex inventions to be described in the English language. In fact, as discussed throughout this book, the patent grant is specifically defined by single sentences called patent claims. As noted by the Federal Circuit, “[w]hen the complexities inherent in the English language meet the peculiarities of patent jargon, the result can be the bane of many unsuspecting patentees.”4 The importance of patents, combined with the inherent difficulties in describing and “claiming” inventions in patents, have led to a substantial body of U.S. law (both statutory and judicial) that attempts to define and govern how patents are analyzed in order to ascertain their proper legal meaning and scope. As discussed briefly below, and at length in the following chapters, this treatise sets forth: (a) the current legal requirements and procedures for objectively determining the meaning and scope of issued U.S. patents; (b) the current legal requirements and procedures for objectively determining whether an issued U.S. patent is valid and enforceable; (c) the current legal requirements and procedures for objectively determining whether an issued U.S. patent has been infringed; (d) a detailed discussion of the law and teaching of

4. Predicate Logic, Inc. v. Distributive Software, Inc., 544 F.3d 1298, 1300 (Fed. Cir. 2008).

The Four Patent Law Principles That Apply 11

how to evaluate and opine on third party U.S. patent rights in regard to various issues; and (e) a detailed discussion of the law and teaching on how to evaluate and opine on one’s own U.S. patent rights and their application to various issues.

III. The Four Patent Law Principles That Apply to Evaluations and Opinions of U.S. Patents This treatise divides U.S. patent law into four principles for purposes of evaluating and opining on U.S. patent rights: (a) claim construction; (b) infringement (including noninfringement and claim scope); (c) validity (and invalidity); and (d) enforceability (and unenforceability). As these legal principles generally apply to most patents in most situations,5 they are presented at the beginning of the treatise and referred to throughout the following chapters.

A. Claim Construction: The Paramount Principle Chapter 2 covers patent claims and claim interpretation (referred to in U.S. patent law as claim construction). Briefly, U.S. patents may be generally divided into two sections: the specification and the claims. The specification of a patent is everything except the claims. As explained by the Federal Circuit: The patent document which grants the patentee a right to exclude others and hence bestows on the owner the power to license, consists of two primary parts: (1) a written description of the invention, which may and here does include drawings, called the “specification,” enabling those skilled in the art to practice the invention, and (2) claims which define or delimit the scope of the legal protection which the government grant gives the patent owner, the patent “monopoly.”6

A patent’s specification includes: (a) an abstract summarizing the invention; (b) a background section describing the general technology and subject

5. While U.S. patent law provides for specific types of patents for plants and designs (35 U.S.C.S. §§ 161–164 (2009) (plant patents) and 35 U.S.C.S. §§ 171–174 (2009) (design patents)), the vast majority of commercially significant U.S. patents are utility patents, which are what most people envision as patents. They cover “any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof.” 35 U.S.C.S. § 101 (2009). This book focuses on U.S. utility patents and the laws related to them. 6. E.g., Gen. Foods Corp. v. Studiengesellschaft Kohle mbH, 972 F.2d 1272, 1274 (Fed. Cir. 1992).

12


matter of the field of art most closely related to the invention; (c) a general description of the invention; and (d) a detailed description of the invention (which may include examples, figures, and the like). A patent’s claims are a series of single sentences that define the precise subject matter being patented.7 The meaning of the claims is based in large part on the description of the invention provided in the specification. However, it is the claims—and only the claims—that define the actual subject matter that is legally patented. Thus, it is the claims, and only the claims, that define the subject matter the patent owner can prevent others from practicing without permission. Therefore, understanding (construing) the meaning of a patent’s claims is of primary importance in virtually all aspects of evaluations and opinions of U.S. patents. A common analogy is to compare a U.S. patent with a land deed. As explained by the U.S. Supreme Court in 1917: The scope of every patent is limited to the invention described in the claims contained in it, read in the light of the specification. These so mark where the progress claimed by the patent begins and where it ends that they have been aptly likened to the description in a deed, which sets the bounds to the grant which it contains. It is to the claims of every patent, therefore, that we must turn when we are seeking to determine what the invention is, the exclusive use of which is given to the inventor by the grant provided for by the statute,—“He can claim nothing beyond them.”8

More specifically, a typical land deed contains a general description of a property, such as its country, state, county, city, neighborhood, and street number. Following this are the survey measurements of the plot of land subject to the deed. The legal metes and bounds of the land covered by the deed are defined only by the survey measurements. The other information assists in identifying and describing the location of the specific survey measurements. However, the legally enforceable aspects of the deed are typically limited to the precise land area defined by the survey measurements. Similar to a land deed, the specification of a U.S. patent defines the invention both broadly and specifically, including examples of the invention and experimental results. The patent’s claims follow the specification and state exactly what subject matter is patented (i.e., what is “claimed” as the patent

7. E.g., Motion Picture Patents Co. v. Universal Film Mfg. Co., 243 U.S. 502, 510 (1917) (“The scope of every patent is limited to the invention described in the claims contained in it, read in the light of the specification.”). 8. Id. at 510 (quoting Keystone Bridge Co. v. Phoenix Iron Co., 95 U.S. 274, 278 (1877)); Railroad Co. v. Mellon, 104 U.S. 112, 118 (1881); Yale Lock Mfg. Co. v. Greenleaf, 117 U.S. 554, 559 (1886); McClain v. Ortmayer, 141 U.S. 419, 424 (1891); Studiengesellschaft, 972 F.2d at 1274; Markman v. Westview Instruments, Inc., 52 F.3d 967, 997 (Fed. Cir. 1995) (en banc).


rights to the invention). Therefore, the specification of a U.S. patent is similar to the part of a land deed that generally and more specifically describes the location of the land while the claims of a patent are similar to the survey measurements of a deed. It is only the survey measurements of a deed, viewed in light of the other identifying information, that legally describe the land subject to the deed. Thus, the survey measurements of a land deed define exactly what land the owner may exclusively control, for example, by prohibiting others from occupying the land (i.e., trespassing). Similarly, in a U.S. patent, it is only the claims (viewed in light of the defining information in the specification) that legally describe the subject matter of the patent grant, which is the specific subject matter the patent owner may prevent others from practicing (i.e., infringing).9 Thus, understanding the meaning of the claims of a U.S. patent is critically important in determining the patent’s scope. Indeed, as the claims define the patent’s grant and subject matter, they must be considered for any evaluation or opinion of a U.S. patent involving any issue related to the claims. This includes virtually every evaluation or opinion of a U.S. patent, including but not limited to evaluations and opinions of patent infringement (including noninfringement and claim scope), validity (and invalidity), and enforceability (and unenforceability). Generally, any evaluation or opinion of a U.S. patent must take into consideration the claims unless the evaluation or opinion is based solely on something entirely unrelated to the claimed subject matter, such as an evaluation or opinion based solely on the term of a patent. The importance of claims has been repeatedly stated by U.S. courts, such as the Federal Circuit (which as the U.S. appellate court that hears appeals in most U.S. patent cases creates much of the country’s judicial patent law). For example, the Federal Circuit stated in its en banc ruling in the Phillips case: It is a “bedrock principle” of patent law that “the claims of a patent define the invention to which the patentee is entitled the right to exclude.” Innova, 381 F.3d at 115; see also Vitronics, 90 F.3d at 1582 (“we look to the words of the claims

9. Examples of issued U.S. patents may be found at the U.S. Patent Office’s Web site via patent number at http://patft.uspto.gov/netahtml/PTO/srchnum.htm. To access a specific patent, one can enter the patent’s seven-digit number. If one is interested in looking at patents in general, one can enter any number (say between 6,500,000 and 7,500,000) and see what patent bears it. Unfortunately, the presentation of patents on this Patent Office Web site does not reflect the actual layout of an “official” issued U.S. patent in which the layout of the specification is followed by the claims, although the claims are identified separately from the other parts of the patent (the specification). One may view an image of an official U.S. patent by following the prompts on the U.S. Patent Office’s Web site http://www.uspto.gov/ or obtain a PDF of an official issued U.S. patent at http://www.pat2pdf.org/ by entering its seven-digit number. Other Web sites such as http://www.lexis.com/ also provide copies of issued U.S. patents.

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Chapter 1 Evaluations and Opinions of U.S. Patents themselves . . . to define the scope of the patented invention”); Markman, 52 F.3d at 980 (“The written description part of the specification itself does not delimit the right to exclude. That is the function and purpose of claims.”). That principle has been recognized since at least 1836, when Congress first required that the specification include a portion in which the inventor “shall particularly specify and point out the part, improvement, or combination, which he claims as his own invention or discovery.” Act of July 4, 1836, ch. 357, § 6, 5 Stat. 117, 119. In the following years, the Supreme Court made clear that the claims are “of primary importance, in the effort to ascertain precisely what it is that is patented.” Merrill v. Yeomans, 94 U.S. 568, 570, 24 L. Ed. 235, 1877 Dec. Comm’r Pat. 279 (1877).10

In its en banc Markman decision, the Federal Circuit reiterated that “[t]he written description part of the specification itself does not delimit the right to exclude. That is the function and purpose of the claims.”11 Finally, in Vitronics the Federal Circuit described its approach to evaluating U.S. patents as: “First, we look to the words of the claims themselves, both asserted and nonasserted, to define the scope of the patented invention.”12 1. Claim “Construction” As mentioned above (and as will be discussed in detail in Chapter 2), due to the inherent difficulty of describing inventions in single sentences in the English language, determining the precise meaning and scope of a patent’s claims is frequently far more difficult than simply reading the words of the claims. The process of determining what a patent’s claims actually, legally mean is termed claim construction. Because this determination is very important, claim construction is of paramount significance in U.S. patent law. For this reason, U.S. courts (including the Federal Circuit) have ruled extensively on claim construction and have developed a set of rules and procedures that must be followed. They include but are not limited to: (a) specific, detailed rules as to what types of evidence may be considered when construing claims, including the relative weight of each type of evidence that may be considered and when and how certain types of evidence may be considered; (b) description of the role one of ordinary skill in the art of the claim terms (read in light of the specification), plays in construing claims; and (c) series of specific rules for construing claims having specific features or using specific terms, such as so-called means-plus-function claims and product-by-process claims. (Chapter 2 discusses these rules in detail.)

10. Phillips v. AWH Corp., 415 F.3d 1303, 1312 (Fed. Cir. 2005) (en banc) (emphasis added). 11. Markman, 52 F.3d at 980. 12. Vitronics Corp. v. Conceptronic, Inc., 90 F.3d 1582 (Fed. Cir. 1996).


The importance of these rules for claim construction has been underscored by U.S. courts which have held that evaluations and opinions of U.S. patents that do not properly follow the rules may be legally incompetent.13

B. Infringement The second legal principle discussed in this treatise is patent infringement. However, emphasizing the importance of claim construction, in virtually all evaluations and opinions of U.S. patents, before any evaluation or opinion of infringement may be given, one must first construe a patent’s claims (as discussed above and in Chapters 2–5). The construed claims of a patent are then compared with a potentially infringing product or process to determine and opine on infringement of the claims. Generally, there are two types of infringement: literal infringement and infringement under the doctrine of equivalents. Literal infringement occurs when a party in the United States without authorization of the patent holder makes, uses, sells, offers to sell, or imports into the country a product or method that literally has every limitation of at least one claim of a patent.14 For purposes of illustration, consider a claim that is open-ended (which is explained in detail in Chapters 2 and 3 as essentially meaning that an infringing product or process must have at least all of the claim limitations) and has three limitations, A, B, and C. Such a claim will be literally infringed by a method or product that has elements identical to the claimed A, B, and C limitations. Because the claim is open-ended, it would also be infringed if the infringing method or product had elements in addition to A, B, and C (such as A, B, C, and D). Thus, to literally infringe an open-ended claim, a method or process must have at the least an element identical to every limitation of the claim (literal infringement in particular is discussed in detail in Chapter 3).

13. E.g., Critikon, Inc. v. Becton Dickinson Vascular Access, Inc., 120 F.3d 1253, 1259–60 (Fed. Cir. 1997) (opinions were not sufficiently competent to overcome a charge of willful infringement where the opinions contained “no analysis of specific claims, [and] no interpretation of claim language . . ..”); compare Westvaco Corp. v. Int’l Paper Co., 991 F.2d 735, 744 (Fed. Cir. 1993) (“Counsel’s opinions in this case are clearly competent and Westvaco was justified in relying on them. Each opinion letter begins with a statement that the opinion is based on a review of the file history of the patent, the prior art of record, and additional prior art. Thus, the opinions evidence an adequate foundation. Moreover, the opinions are not conclusory. The validity and infringement issues are analyzed in detail, including discussions of the prior art, the accused device, and the claim language. The claims are not discussed as a group but are separately analyzed.”). 14. As explained in detail in Chapters 3–5, claims have limitations, such as steps in a method or components in a product. Steps or items in an infringing method or product that correlate with a patent claim’s limitations are referred to as elements.

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By contrast, infringement under the doctrine of equivalents (discussed in detail in Chapter 4) occurs where an infringing method or product does not have identical elements for every claim limitation, but has either identical or equivalent elements for every claim limitation. For purposes of illustration, consider an open-ended claim having limitations A, B, and C and a product or process having elements A, B, and C´ (C-prime). Here, there would be no literal infringement because element C´ is not identical to claim limitation C. However, if element C´ is equivalent to claim limitation C, there would be infringement under the doctrine of equivalents. U.S. courts have set forth specific and sometimes complex rules that must be followed in determining whether there is infringement under the doctrine of equivalents (these are discussed in detail in Chapter 4). Generally, if an element in a product or process is not identical to a claim limitation, it is equivalent under the doctrine of equivalents if it performs substantially the same function, in substantially the same way, to achieve substantially the same result as the claimed limitation, or if there are only insubstantial differences between the element and the claim limitation. However, there are a number of significant restrictions on the application of the doctrine of equivalents that must be considered when determining infringement under the doctrine. Finally, Chapter 5 discusses other forms of infringement (including inducing another to infringe and contributing to infringement by another), divided infringement, and legal “safe harbors” wherein under certain specific circumstances, one may be exempt from infringement liability.

C. Validity The third legal principle discussed in this treatise is patent validity. Evaluations and opinions of patent validity also include evaluations and opinions of invalidity and patentability. (Chapters 6–9 and 17 discuss in detail the various bases on which a patent may be found to be invalid.) Perhaps the most common evaluations and opinions regarding patent validity are those involving the invalidity of patents of third party competitors. These will be discussed here for purposes of illustration. As with infringement, before any evaluation or opinion of invalidity, validity, or patentability may be done, one must construe a patent’s claims as discussed above and in Chapter 2. The construed claims of a patent are then compared with a potentially invalidating reference or event or with the patent’s specification for support for the claims. As discussed in detail in Chapters 6–9 and 17, there are a number of bases on which the claims of an issued U.S. patent may be shown to be invalid. These include (but are not limited to) printed publication prior art references (including published patent applications and issued patents), prior sales or


offers for sale, lack of enablement or support of the claimed invention by the specification, or lack of definiteness of the claimed subject matter. There are essentially three main forms of patent invalidity (although, as discussed in Chapters 6–9 and 17, others exist as well): anticipation, obviousness, and lack of support. Anticipation is discussed in detail in Chapters 5 and 6. Generally, it occurs when a prior art reference (for example, a published paper) or event (for example, a sale in the United States) that occurs at a specific time relative to the date of the filing of an application for a patent, or the invention date for a patent (different dates and events apply, depending on the type of anticipation), discloses every limitation of a claim. For example, a qualifying prior art reference disclosing A, B, and C will anticipate a claim having limitations A, B, and C. Similarly, a qualifying sale in the United States of a device having elements A, B, and C will anticipate a claim having limitations A, B, and C (see Chapters 6 and 7). Anticipation requires that a single reference or event disclose every limitation of a claim (essentially, it is somewhat similar to literal infringement in that the invalidating reference, as with a literally infringing item, must contain identical correlating elements to every claim limitation). If a single prior art publication or event does not have every identical claim limitation, there is no anticipation. Additional issues relating to anticipation include that the prior art reference must enable the subject matter that correlates with a claim’s limitations in order to anticipate the subject matter, and that a reference (such as a printed publication) need not explicitly disclose every claim limitation if the subject matter corresponding to a claim’s limitation was necessarily present (i.e., was “inherently present”) from the teaching of the reference at the critical prior art date (this is termed inherent anticipation and is discussed in Chapters 5 and 6). A claim that is anticipated is invalid, with invalidity being determined on a claim-by-claim basis. Therefore, a patent may have some invalid claims and others that remain valid. When a single prior art reference does not identically disclose or enable every claim limitation, and thus cannot anticipate a claimed invention, a claimed invention may still be obvious over the reference, either alone or in combination with another reference that supplies the missing elements. A claim is obvious if the difference would have been obvious between the claimed subject matter and the disclosure and teaching of one or more prior art references, viewed in light of the level of one of ordinary skill in the art at the time of the invention. Obviousness (which is discussed in detail in Chapter 8) is often based on a combination of two or more prior art references that individually do not disclose every claim limitation (and thus, cannot anticipate), but when combined disclose every limitation. The critical issue in determining obviousness when based on combining references is whether one of ordinary skill in the relevant art would have found the combination to be obvious. For example, when a combination of prior art produces the claimed invention, and the properties of the claimed

18 Chapter 1 Evaluations and Opinions of U.S. Patents

invention are what one of skill in the art would have expected at the relevant date to occur from the combination of prior art, obviousness may be found. On the other hand, when a claimed invention has properties that one of skill in the art would not have expected to result from combining prior art references (such as unexpected success) or where references themselves teach against making a combination that has every claim limitation, obviousness may not be found. Unlike anticipation, obviousness does not require prior art references to enable the claimed subject matter. Further—and also unlike anticipation—a showing of obviousness may be overcome by the patent owner with evidence of nonobviousness, such as commercial success, long-felt and unmet need in the marketplace, or copying by others. However, a court is not compelled to hold that an invention is not obvious where it has been shown to be obvious even though the patent owner presents evidence of nonobviousness. A third major form of invalidity involves deficiencies of a patent’s specification to enable, support, or describe the full scope of the claimed subject matter. These include the enablement, written description, and best mode requirements. The U.S. patent statute requires that a specification of a patent “enable” one of ordinary skill in the art at the time the application was filed to be able to practice the full scope of the claims of the patent without undue experimentation. Failure of the specification to enable the practice of the full scope of a claim by one of ordinary skill in the art without undue experimentation invalidates the claim. Under the written description requirement, a patent’s specification must make it clear to one of skill in the relevant art that the patent holder was in possession of the claimed invention when the application for the patent was filed. Claims that lack proper written description are also invalid. Finally, under the best mode rule, a patent inventor must disclose and enable in the specification the inventor’s subjective best mode of carrying out the claimed invention (if there is one) as of the filing date of the application. Failure to comply with the best mode requirement also invalidates claims, and in certain circumstances may make an entire patent unenforceable.

D. Enforceability Finally, the fourth patent law principle of this book is patent enforceability (or unenforceability). This is discussed in detail in Chapter 10, which indicates that evaluations and opinions of unenforceability of third party patent rights are rare. This is because demonstrating unenforceability under the most common form, inequitable conduct (fraud on the Patent Office) requires a showing of intent to defraud on the part of the patent applicant. Generally, when one is opining on a third party patent, the evidence necessary to demonstrate inequitable conduct (including intent), is not available, as typically this


information is only brought forth in the discovery process of patent infringement litigation under counterclaims of unenforceability due to inequitable conduct. Nonetheless, unenforceability plays an important role in evaluations and opinions of U.S. patent rights. For example, when someone evaluates a company’s own patent rights prior to enforcing, licensing, or assigning those rights, determination of the enforceability of the those rights can be very important. This significance is due in part to certain types of patent unenforceability being correctable (this is discussed in detail in Chapter 10). Unlike invalidity, a finding by a court of patent unenforceability (e.g., due to fraud on the Patent Office) even for only one claim renders the entire patent unenforceable. Furthermore, a patent that is unenforceable may not necessarily have invalid claims; thus, a patent may be unenforceable yet valid. In such a case, the effect is the same in that there is no infringement liability as the patent holder cannot sue for infringement (i.e., the patent may not be enforced in a U.S. court of law). There are two basic types of events that can lead to patent unenforceability. As discussed above, probably the most common is inequitable conduct, which is intentional fraud on the U.S. Patent Office in the procurement of a patent. To prove inequitable conduct, one must show that the patent applicant made an affirmative misrepresentation of material fact, failed to disclose material information, or submitted false material information with the intent to deceive the Patent Office. Information is considered to be material if a reasonable examiner would have considered it important in deciding whether to allow the patent to be issued. Materiality and intent are separate elements and must be proven separately; however, intent may be inferred from certain types of evidence of materiality. Materiality and intent for inequitable conduct must be proven by clear and convincing evidence. However, even then a court may not find a patent to be unenforceable as the court must balance the egregiousness of the fraud against the severity of the penalty (unenforceability of the entire patent) in making its determination. Unenforceability for inequitable conduct can be “cured,” but only if the inequitable conduct itself is cured in the application (or a related application) before a patent issues. To do so as to a pending application, the applicant must expressly advise the Patent Office of the conduct, provide the Patent Office with the correct material information, indicate that additional examination may be necessary, and establish that the claims are patentable over the correct material information. Conversely, once a patent issues from an application having uncured inequitable conduct, the problem cannot be cured. For example, inequitable conduct cannot be cured in a reissue examination. The other basic form of patent unenforceability is patent misuse, which arises when a patent owner impermissibly broadens the scope of the patent

20 Chapter 1 Evaluations and Opinions of U.S. Patents

grant with anticompetitive effect. Certain acts are per se patent misuse, such as “tying” arrangements (in which a patentee conditions a license under a patent on the purchase of separable, stable goods) and other arrangements in which a patentee effectively extends the term of a patent, such as by requiring payment of royalties on a patent license after a patent expires. Other acts are statutorily not patent misuse.15 Still other acts are determined via a “rule of reason” analysis which takes into consideration whether an act broadens the scope of the patent grant and imposes an unreasonable restraint on competition. However, it is not necessary for activities to rise to the level of antitrust violations in order to constitute patent misuse. Patents which have been misused may be unenforceable until the misuse is remedied.

IV. Evaluations and Opinions of Third Party Patent Rights Following the detailed discussion of the principles of U.S. patent law most applicable to evaluations and opinions of U.S. patents, the book is divided between evaluations and opinions of third party patent rights and of one’s own patent rights. This division reflects the reality of patent opinion practice, in which one is typically asked either to evaluate or opine on third party patent rights (e.g., in a patent clearance evaluation or opinion), or on a company’s own patent rights (e.g., in preparation under Rule 11 prior to suing a party for infringement of a company’s patent rights).

A. Evaluating and Opining on Third Party Patent Rights for Patent Due Diligence One of the most common reasons for evaluating and opining on third party patent rights is patent due diligence from the perspective of the potential purchaser of a third party’s patent rights (i.e., an acquiring company). This due diligence involves several different uses of evaluations and opinions of third party patent rights. For example, the target company’s patents need to be analyzed for claim scope and infringement (via evaluations and opinions of infringement and claim scope), for potential invalidity (via evaluations and opinions of invalidity), and for potential unenforceability (via evaluations and opinions of enforceability). Further, clearance evaluations and opinions need to be performed on the practice of the technology of the target company’s patents. As discussed in

15. 35 U.S.C.S. § 271(d) (2009).

Evaluations and Opinions of Third Party Patent Rights 21

detail in Chapter 11, clearance evaluations and opinions require searching to determine whether third party patent rights may be infringed by the practice of technology potentially being acquired. If third party patent rights are identified that might be so infringed, one needs to analyze whether the potentially infringed patents should be licensed, or whether they may be determined to be invalid or not infringed by the subject technology via evaluations and opinions of noninfringement and invalidity. Other issues need to be examined as well, including the inventorship, ownership, and the ability to assign ownership of the target company’s patent rights.

B. Evaluating and Opining on Third Party Patent Rights for Clearance (Freedom to Operate), Noninfringement, and Invalidity Another common reason for evaluating and opining on third party patent rights arises in the context of patent clearance analyses. These may be done in representing an acquiring company in patent due diligence as discussed above. Other common situations include when companies are considering practicing a new technology or introducing a new method or product into the marketplace. In such cases, searches are performed to determine whether any third party patent rights may be affected by the proposed new activity. Analyses of these patents assist companies in determining whether any third party patents should be licensed or acquired, whether the company’s proposed new products or technologies may be changed in order to design around certain patents, or whether the patents are invalid or would not infringed by the proposed new technology (via evaluations and opinions of noninfringement or invalidity).

C. Evaluating and Opining on Third Party Patent Rights to Avoid Willful Infringement Historically, perhaps the most common reason for a company to obtain opinions of noninfringement or invalidity of third party patent rights was if it had notice that its products or processes potentially infringed third party patent rights, but the company believed either that it was not infringing or that the patents were invalid. Prior to the Federal Circuit’s Seagate Technologies opinion in 2007,16 Federal Circuit law held that a party had an affirmative duty to seek a noninfringement or invalidity opinion of counsel when it had notice of potential infringement of a third party patent. If the party was sued for

16. In re Seagate Tech., LLC, 497 F.3d 1360 (Fed. Cir. 2007) (en banc).

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infringement of the patent, and was found by the court to have infringed, failure to have obtained and relied on a competent opinion of noninfringement or invalidity could result in the infringer being found to have willfully infringed the patent, thus allowing courts to treble infringement damages. In contrast, reliance on an objectively reasonable and competent opinion of noninfringement or invalidity could counter a charge of willful infringement even after the court has found infringement. Seagate eliminated the affirmative duty for a potential infringer to seek an opinion of noninfringement or invalidity to avoid a finding of willful infringement. Further, Seagate held that to willfully infringe a patent, the infringement must have been objectively reckless. Immediately following the Seagate decision, several commentators speculated that opinions of noninfringement or invalidity to avoid willful infringement were no longer important or necessary. However, since Seagate, at least two Federal Circuit cases have found that reliance on a competent opinion of counsel of noninfringement or invalidity was sufficient evidence to avoid a finding of willful infringement under the objectively reckless standard. Therefore, following Seagate, opinions of noninfringement and invalidity remain an important means by which a potential infringer may protect itself against a possible holding of willful infringement (and the threat of treble damages) should it be sued regarding a patent that it had notice it might be infringing. Thus, the pre-Seagate practice of companies performing patent clearance analyses—and obtaining and relying on opinions of noninfringement or invalidity of third party patent rights prior to a company practicing a new technology or launching a new product or process—remains firmly in place.

D. Evaluating and Opinion on Third Party Patent Rights for Prefiling Rule 11 and Section 285 Investigations in Declaratory Judgment Actions, ANDA Paragraph IV Certifications, Avoidance of Preliminary Injunctions, and Readiness in “Rocket Docket” Jurisdictions and ITC Investigations Chapter 14 discusses evaluations and opinions of third party patents prior to the initiation of a number of different court and other proceedings regarding these patents. One example involves evaluations and opinions of noninfringement or invalidity of a third party patent prior to the filing of a declaratory judgment action seeking a holding regarding its noninfringement or invalidity. The typical Rule 11 investigation in a patent infringement action is discussed in Chapter 20; it involves obtaining evaluations and opinions of

Evaluating and Opining on One’s Own Patent Rights

infringement and validity of one’s own patent prior to suing another for infringement. However, the same Rule 11 requirements apply when a party is contemplating seeking a holding that a third party patent is either not infringed or is invalid. Thus, prior to filing a declaratory judgment action for noninfringement or patent invalidity, Rule 11 requires an investigation of infringement or patent invalidity of the third party patent. To satisfy Rule 11 in this context, evaluations or opinions of noninfringement or invalidity of the third party patent are performed prior to initiation of a declaratory judgment action. Similarly, evaluations and opinions of third party patents are required (or at least recommended) prior to initiation of other actions, such as ANDA (Abbreviated New Drug Application) Paragraph IV Certifications regarding third party patents listed in the FDA’s Orange Book. Other uses of evaluations and opinions of third party patents include readiness for potentially being sued in so-called “rocket docket” jurisdictions or ITC investigations, in which the speed of litigation makes it advantageous for a potential infringement defendant to have its noninfringement and invalidity positions of a third party patent worked out in advance of being sued for infringement.

E. Evaluating and Opining on Third Party Patent Rights for Due Diligence Prior to Post-Grant Challenges Still another use of evaluations and opinions of U.S. patents involves those regarding patent invalidity prior to challenging a third party patent in a postgrant challenge with the U.S. Patent Office. As discussed in Chapter 15, the U.S. Patent Office offers several means of challenging the validity of thirdparty patents. However, each of these have certain disadvantages, including in some instances the potential of creating estoppel that will deprive a party from being able to challenge the validity of the patent on the same basis later in a court of law. Therefore, prior to initiating any post-grant challenge of a third party patent, one should perform careful evaluations and opinions of invalidity of the patent, including evaluating the strengths and weaknesses of positions of invalidity and other options for challenging the patent such as in a court of law.

V. Evaluating and Opining on One’s Own Patent Rights As discussed below (and in detail in Chapters 16–22), there are many different situations in which patent owners should evaluate or opine on their own

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patent rights. Examples include Rule 11 pre-infringement lawsuit investigations, patentability determinations of new inventions, strategic patenting, and defensive due diligence.

A. Evaluating and Opining on One’s Own Patents for SEC Considerations, Including Patent Audits Compliance with certain U.S. securities laws may be aided in certain circumstances by evaluations and opinions of a company’s patent rights, including patent audits. Chapter 16 discusses SEC issues and their application to U.S. patent rights. That chapter also provides important information for compliance with U.S. securities laws regarding reporting on a company’s patent rights in certain circumstances. Further, Chapter 16 discusses situations in which U.S. patent counsel evaluating and opining on a public company’s patent rights for purposes other than SEC compliance may inadvertently trigger potential liability under U.S. securities laws.

B. Evaluating and Opining on One’s Own Patents for Patentability Determinations Evaluations and opinions of patentability of potential new inventions can aid companies in strategically determining whether to pursue patent applications on new inventions, and if so, which aspects of the inventions should be patented. The considerations discussed in Chapter 17 fit closely with those discussed in Chapter 18 regarding strategic patenting. As discussed below and in Chapter 18, one of the goals of strategic patenting is to use a company’s patenting resources prudently by efficiently and strategically building a patent portfolio that best meets the company’s patent needs while avoiding waste and unnecessary patenting. Evaluations and opinions of patentable subject matter of company inventions are an important component of strategic patenting.

C. Evaluating and Opining on One’s Own Patent Rights for Strategic Patenting (Including Patent Landscapes) Chapter 18 discusses comprehensive strategic patenting for companies that makes use of evaluations and opinions of the scope, infringement, validity, inventorship and ownership, and enforceability of a company’s patent rights. This information is combined with the current and future commercial goals of a company and the third party patent landscape in the technologies of commercial interest to a company. As discussed in detail in Chapter 18, by evaluating and coordinating this information, a company can efficiently use its

Evaluating and Opining on One’s Own Patent Rights

resources to ensure that its commercially important technology (both present and future) is adequately protected by patent rights and is free from potential infringement of third party patents. Moreover, strategic patenting may identify rights owned by a company that could be used as leverage against competing companies or sold or licensed to generate income for a company.

D. Evaluating and Opining on One’s Own Patent Rights Prior to Sale or Licensing: Defensive Due Diligence As discussed above, Chapter 11 addresses the role of evaluations and opinions of third party patents in patent due diligence. Another important role of patent evaluations and opinions is determining the patent assets of a company in defensive due diligence, which allows a company to proactively determine the strengths and weaknesses of its patent portfolio prior to sale or licensing negotiations (see Chapter 19). Generally, the more prepared a company is as a target for due diligence, the more value it can obtain from selling or licensing its patent portfolio. Also, by combining defensive due diligence with strategic patenting (as discussed in Chapter 18), a company can carefully control which patent assets it desires to sell or license and which it should maintain to enhance the company’s value and competitive position in a patent landscape.

E. Evaluating and Opining on One’s Own Patent Rights for Due Diligence Prior to Enforcement Actions, Including Rule 11 Prefiling Investigations, FDA Orange Book Listing Considerations, Preparations for Obtaining Preliminary Injunctions, and Readiness in “Rocket Docket” Jurisdictions and ITC Investigations Chapter 20 is related to Chapter 14, except that Chapter 20 concerns the evaluation of a company’s own patent rights prior to court and other actions. For example, evaluations and opinions of infringement and validity of a company’s patents are usually necessary and thus recommended to satisfy Rule 11 prefiling investigation requirements prior to suing a party for infringement of these rights. Courts generally hold that, at a minimum before suing a party for patent infringement, a patent owner must perform an infringement evaluation or opinion wherein the company’s patent claims are construed and compared against the potentially infringing third party activities. It is also helpful to evaluate the validity and unenforceability of a company’s patent rights prior to asserting them in infringement litigation. This can both satisfy Rule 11 requirements for prefiling investigations and prevent a company from unwittingly having its patent rights held invalid or unenforceable by a court due to the company attempting to enforce a patent that has potential in validity or

25

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enforceability issues. Further, prefiling investigations of the validity, inventorship and ownership, and enforceability of a patent to be enforced can place a company at an advantage in so-called “rocket docket” jurisdictions and in ITC investigations in which there is but little time after an action is filed to investigate such issues. Chapter 18 also discusses specialized issues related to evaluating a company’s own patent rights such as issues to be investigated and considered prior to a company listing its U.S. patents in the FDA’s Orange Book.

F. Evaluating and Opining on One’s Own Patent Rights Before Post-Issuance Proceedings Chapter 21 discusses the evaluations and opinions of a company’s patent rights that need to be done prior to initiation of post-grant correction processes in the U.S. Patent Office (such as reexamination and reissue proceedings). As discussed in that chapter, a patent holder should carefully evaluate and consider the potential risks and rewards of post-grant actions on its patent rights. These actions should not be undertaken without careful consideration of the risks, rewards, and other options available to a patent owner. Evaluations or opinions of patent issues are essential in making informed decisions as to post-grant procedures.

G. Evaluating and Opining on One’s Own Patent Rights in Bankruptcy Cases Chapter 22 discusses patent issues in bankruptcy cases. This is a specialized area of law in which patent attorneys working with competent bankruptcy counsel can significantly enhance the outcome of reorganization or liquidation proceedings of companies owning patent assets by applying patent law principles and evaluations or opinions of patent rights in the context of bankruptcy cases.

VI. Legal Competency of (and Reliance on) Opinions to Avoid Willful Infringement As discussed above (and in detail in Chapter 13), reliance on opinions of patent counsel of noninfringement or invalidity of third party patents remains an important means for potentially avoiding a holding of willful infringement and treble damages in patent infringement litigation. However, to avoid a finding of willful infringement, the infringer must show that the opinion was objectively reasonable and that the infringer reasonably relied upon it.

Detailed Subject Matter Index and Case, Statute and Rule Index

Chapter 23 discusses minimum requirements that opinions of noninfringement and invalidity must meet in order to be legally competent. These include that the person preparing the opinion properly construes the patent’s claims and correctly applies the proper law to reach any conclusions of noninfringement or invalidity. Moreover, an infringer must also show that it reasonably relied on the advice of patent counsel that its products or processes did not infringe any valid claims of a third-party’s patent. Chapter 23 discusses Federal Circuit decisions evaluating the necessary requirements for proving reasonable reliance on an advice-of-counsel defense against willful infringement.

VII. Waiver of Attorney–Client Privilege and Work-Product Immunity Issues with Evaluations and Opinions of U.S. Patents Finally, Chapter 24 discusses important issues related to maintaining or waiving attorney–client privilege and work product immunity in the context of opinions of counsel for the avoidance of willful infringement. This is a complex and evolving area of law in which strict compliance with the current law is essential to retain the important privileges and immunities associated with these opinions.

VIII. Sample Outlines of Noninfringement and Invalidity Opinions Appendices A, B, and C provide sample outlines of noninfringement and invalidity opinions. These include important disclaimer language and language related to the preservation of attorney–client privilege and work product immunity of the opinion; they also provide outlined examples of such opinions.

IX. Detailed Subject Matter Index and Case, Statute and Rule Index In keeping with the envisioned use of this treatise as discussed above—that most users will access specific topics and issues—this treatise provides a detailed subject matter index to facilitate a reader in locating specific chapters and sections that address topics and issues of interest. A case, statute and rule index provides further guidance in finding sections of the book relevant to a specific case, statute, or rule.

27


CHAP T ER

2 Patent Law Principle I Claim Construction

I. Virtually All Patent Evaluations and Opinions Must Construe Claims II. The Claims Define the Scope of the Patent Grant

33 35

A. Statutory Basis

35

B. Jurisprudence

36

III. Evidence for Claim Construction

39

A. Background: Pre-Phillips Law

40

1. Generally

40

2. Intrinsic and Extrinsic Evidence Defined

41

3. Intrinsic Evidence Is Always to Be Considered in Claim Construction

41

4. Pre-Phillips Consideration of Extrinsic Evidence

42

a) Dictionary Definitions B. Phillips v. AWH Corp.

43 44

1. Eliminating the Texas Digital Dictionary Presumption

45

2. Extrinsic Evidence May Be Considered at Any Time to Inform Claim Construction

46

C. Current Law of Evidence for Claim Construction

48

1. Overview

48

2. The Timing for Evidence

50

3. Intrinsic Evidence

50

a) The Claims

50

b) The Specification

51

c) The Prosecution History

51

4. The Relative Weight of Intrinsic Evidence a) The Claims

61 61


62


65

29

30

Chapter 2 Patent Law Principle I 5. Extrinsic Evidence IV. Current Law of the Process of Claim Construction

67 69

A. Overview

69

B. A Brief Summary of the Evidence of Claim Construction

69

1. Intrinsic Versus Extrinsic Evidence

69

2. Relative Weight of Intrinsic Evidence

70

a) The Claims

71


71


71

C. The Step-By-Step Process of Claim Construction

72

1. Focus on and Define the Claim Terms

72

2. Determine the Ordinary and Customary Meaning of the Claim Terms as an “Objective Baseline from which to Begin Claim Construction”

73

a) Extrinsic Evidence May Be Consulted to Determine the Ordinary and Customary Meaning of Claim Terms in the Relevant Art

73

b) The Intrinsic Evidence Must Be Considered to Determine the Ordinary and Customary Meaning of Claim Terms in the Relevant Art

74

3. The Proper Claim Construction May Differ from the Ordinary and Customary Meaning in the Relevant Art

77

a) Patentee as Own Lexicographer

78

b) Disclaimer or Disavowal of Claim Scope

79

4. In Certain Situations, Reliance on Extrinsic Evidence to Define Claim Terms Is Proper V. Specific Rules of Claim Construction

80 82

A. Claim Construction Should Not Take into Consideration the Accused Infringing Product or Process

82

B. Avoid Importing Limitations from the Specification into the Claims

82

C. Avoid Reading Out the Preferred Embodiment

85

D. Internal Inconsistency of Terms

85

1. Same Term Within Claims

85

2. Same Term in Specification and Claims

85

E. Doctrine of Claim Differentiation

86

F. Means-Plus-Function Claim Limitations

87

1. Construing Whether a Claim Limitation Is a Means-Plus-Function Limitation

88

Patent Law Principle I 31 2. Construing Means-Plus-Function Limitations

90

a) Function

91

b) Structure

92

G. Product-by-Process Claims

94

1. Construing Product-by-Process Claims for Validity

94

2. Construing Product-by-Process Claims for Infringement

95

a) History of Product-by-Process Claims in the Federal Circuit b) Basis of the Abbott Court’s En Banc Holding c) Scripps Is Expressly Overruled d) The Holding of Abbott Applies to All Types of Product-by-Process Claims H. Preamble as a Limitation 1. Determining Whether the Preamble Is a Limitation I. Construction of Claims to Preserve Validity J. Transitional Phrases

96 99 100 100 101 102 103 105

1. Open-Ended (Comprising)

105

2. Partially Open-Ended (Consisting Essentially of )

106

3. Closed (Consisting of )

107

a) Markush Claiming and Other Uses of Consisting of Within a Claim Limitation VI. Practice Points

109 111

A. Legally Competent Patent Opinions Must Properly Construe Claims

111

B. In Proper Claim Construction, the Meaning of All Claim Terms Must Be Construed Based on the Meaning of the Terms to One of Ordinary Skill in the Relevant Art in Light of the Intrinsic Evidence

111

C. Every Claim Term Must Be Construed

112

D. Hierarchy of Intrinsic Evidence for Claim Construction

112

E. The Full Prosecution History Must Be Evaluated in Claim Construction

112

F. Express Definitions in the Specification

113

G. Express Definitions and Representations in a Patent’s Prosecution History

113

H. A Patentee May Be His Own Lexicographer

113

I. Disclaimer and Disavowal in a Patent’s Prosecution History

113

32 Chapter 2 Patent Law Principle I J. Know and Use the Rules for Extrinsic Evidence in Claim Construction

114

K. Be Aware of and Apply Specific Rules of Claim Construction

114

L. Up-to-Date Law of Claim Construction Must Be Included in Opinions

115

M. Literal Claim Scope May Differ from Claim Scope under the Doctrine of Equivalents

115

Virtually All Patent Evaluations and Opinions Must Construe Claims 33

Usage Note: This chapter covers claim construction. As discussed throughout this treatise, claim construction is a necessary component of virtually every evaluation and opinion of U.S. patents. Therefore, this chapter is relevant to almost every chapter in this treatise. For example, this chapter relates directly to Chapter 3 (literal infringement) because claim construction defines the scope of a patent’s claims for purposes of determining literal infringement.1 Similarly, this chapter is directly relevant to the following chapters because claim construction is an essential component of the evaluations and opinions of each chapter: Chapter 4 (infringement under the doctrine of equivalents), Chapter 5 (indirect infringement), Chapters 6–9 (validity), Chapter 10 (enforceability), Chapter 12 (clearance [freedom to operate] opinions), Chapter 13 (opinions to avoid willful infringement), Chapters 14 and 15 (prefiling due diligence), Chapter 16 (patent audits), Chapter 18 (strategic patenting and patent landscapes), Chapter 19 (defensive due diligence), Chapters 20 and 21 (prefiling due diligence), Chapter 22 (patent issues in bankruptcy), and Chapter 23 (legal competency of opinions).

I. Virtually All Patent Evaluations and Opinions Must Construe Claims Claim construction is the determination of the proper and legal meaning of a patent’s claims. As these claims define the subject matter of the patent grant, claim construction is essential to virtually all evaluations and opinions regarding U.S. patents. Indeed, without determination of the proper meaning of a patent’s claims, it is simply not possible to evaluate and opine almost on any issue relating to rights of a U.S. patent, including on one’s own patent rights or the patent rights of others. For example, U.S. courts consistently hold it virtually impossible for anyone to prepare a competent legal opinion of patent noninfringement or invalidity without construing a patent’s claims,2 with the rare exceptions including situations in which the meaning of a patent’s claims has been agreed to by the parties of a transaction (perhaps based upon

1. Claim construction is also a necessary component of evaluations and opinions of infringement under the doctrine of equivalents. However, the interpretation of the scope of a patent’s claims for determining infringement under the doctrine of equivalents may differ from a patent’s claim scope as determined by claim construction. Chapter 4 covers determination of the scope of claims for purposes of evaluating and opining on infringement under the doctrine of equivalents. 2. E.g., Critikon, Inc. v. Becton Dickinson Vascular Access, Inc., 120 F.3d 1253, 1259–60 (Fed. Cir. 1997) (finding that opinions were not sufficiently competent to overcome a charge of willful infringement where the opinions contained “no analysis of specific claims, [and] no interpretation of claim language. . . .”).

34

Chapter 2 Patent Law Principle I

a court’s prior construction of the claims) or those in which only a patent’s term is at issue. Unfortunately, the requirement that complex inventions be reduced to one sentence descriptions in a patent’s claims leads to the never-ending challenge of determining exactly what a patent’s claims truly cover. As explained by Federal Circuit Judge Linn: When the complexities inherent in the English language meet the peculiarities of patent jargon, the result can be the bane of many unsuspecting patentees. While claim language is generally the product of the patentee alone, the patentee’s drafting efforts are sometimes aided by the examiner. Usually, such collaborative efforts are constructive. On occasion, however, these efforts result in confusion, not clarity. In this case, there were two such occasions. The first was during the original prosecution—when the patentee authored and the examiner allowed a claim with an arguably ambiguous limitation. The second was during reexamination—when the patentee and the examiner clarified the claim but failed to make an adequate record explaining the rationale for the amendment. Careful and straightforward claim drafting by prosecuting attorneys and agents, and rigorous application by examiners of the statutory standard to particularly point out and distinctly claim the subject matter regarded to be the invention, see 35 U.S.C. § 112, P 2 (2000), serve an important public notice function. Here, the public notice function was not well served. Indeed, the controversy in this case might have been avoided had the claims been presented differently and accepted by the examiner only after more careful scrutiny.3

As will be discussed in detail below, in addition to a long and old line of U.S. Supreme Court and appeals court cases on claim construction, the Federal Circuit (the U.S. Appellate Court that hears most patent appeals) has issued two major en banc decisions and two additional leading cases on the principles of claim construction. These important cases are Phillips v. AWH Corp.,4 Markman v. Westview Instruments,5 Vitronics v. Conceptronic,6 and Innova/Pure Water v. Safari Water Filtration.7 The following sections of the chapter address: (a) the principle that the claims themselves define the scope of the patent grant (Section II); (b) the types of evidence available for claim construction and their appropriate use in properly construing claims (Section III); (c) the process of claim construction

3. Predicate Logic, Inc. v. Distributive Software, Inc., 544 F.3d 1298, 1300 (Fed. Cir. 2008). 4. Phillips v. AWH Corp., 415 F.3d 1303 (Fed. Cir. 2005) (en banc). 5. Markman v. Westview Instruments, Inc., 52 F.3d 967 (Fed. Cir. 1995) (en banc), aff ’d, 517 U.S. 370 (1996). 6. Vitronics Corp. v. Conceptronic, Inc., 90 F.3d 1576 (Fed. Cir. 1996). 7. Innova/Pure Water, Inc. v. Safari Water Filtration Sys., 381 F.3d 1111 (Fed. Cir. 2004).

The Claims Define the Scope of the Patent Grant 35

(Section IV); and (d) specific rules of claim construction (Section V); it concludes with practice tips for construing claims (Section VI).

II. The Claims Define the Scope of the Patent Grant Claim construction is ubiquitous in evaluating and opining on U.S. patents as it is the claims—and only the claims—that define the patent grant. This is clearly set forth both in the U.S. patent statutes and by a long line of U.S. Supreme Court and appellate court jurisprudence dating back to the 1800s.

A. Statutory Basis The second paragraph of patent statute 35 U.S.C. §112 provides: The specification shall conclude with one or more claims particularly pointing out and distinctly claiming the subject matter which the applicant regards as his invention.8

In 1887, the U.S. Supreme Court described this section of the Patent Code as it was written in 1836 as follows: Since the act of 1836, the patent laws require that an applicant for a patent shall not only, by a specification in writing, fully explain his invention, but that he “shall particularly specify and point out the part, improvement, or combination which he claims as his own invention or discovery.” This provision was inserted in the law for the purpose of relieving the courts from the duty of ascertaining the exact invention of the patentee by inference and conjecture, derived from a laborious examination of previous inventions, and a comparison thereof with that claimed by him.9

Another Supreme Court decision in 1876 praised Congress for enacting the section of the Patent Code requiring the patent applicant to define his or her invention fully within the claims, and only the claims: The act of Congress, therefore, very wisely requires of the applicant a distinct and specific statement of what he claims to be new, and to be his invention. In

8. 35 U.S.C.S. § 112, P 2 (2009). 9. Keystone Bridge Co. v. Phoenix Iron Co., 95 U.S. 274, 278 (1887).

36

Chapter 2 Patent Law Principle I practice, this allegation of the distinct matters for which he claims a patent comes at the close of the . . . specification. . . . This distinct and formal claim is, therefore, of primary importance in the effort to ascertain precisely what it is that is patented. . . .10

B. Jurisprudence Since the 1800s, the U.S. Supreme Court has consistently held that the claims of a patent, and only the claims, define the patented invention. For example, in 1881 the Court stated: As a rule, therefore, the specification filed with the application for letters-patent contains a general description of the invention sought to be patented, which is followed by what is technically called the “claim.”. . . In view, therefore, of the statute, the practice of the Patent Office, and the decisions of this court, we think that the scope of letters-patent should be limited to the invention covered by the claim, and that though the claim may be illustrated, it cannot be enlarged by the language used in other parts of the specification. We are, therefore, justified in looking at the “claim” with which the specification of the appellee’s invention concludes, to determine what is covered by his letters-patent. . . . He cannot go beyond what he has claimed and insist that his patent covers something not claimed, merely because it is to be found in the descriptive part of the specification.11

In addition, in a much-cited U.S. Supreme Court case from 1917, Motion Picture Patents v. Universal Film Mfg., the Supreme Court indicated: The scope of every patent is limited to the invention described in the claims contained in it, read in the light of the specification. These so mark where the progress claimed by the patent begins and where it ends that they have been aptly likened to the description in a deed, which sets the bounds to the grant which it contains. It is to the claims of every patent, therefore, that we must turn when we are seeking to determine what the invention is, the exclusive use of which is given to the inventor by the grant provided for by the statute,—“He can claim nothing beyond them.”12

10. Merrill v. Yeomans, 94 U.S. 568, 570 (1876). 11. Railroad Co. v. Mellon, 104 U.S. 112, 118–19 (1881). 12. Motion Pictures Patents Co. v. Universal Film Mfg. Co., 243 U.S. 502, 510 (1917) (emphasis added) (quoting Keystone, 95 U.S. at 278).

The Claims Define the Scope of the Patent Grant 37

The Federal Circuit has clearly followed the Supreme Court’s precedence on this issue. For example, in Hoechst-Roussel v. Lehman, the court stated: The term “claims” has been used in patent legislation since the Patent Act of 1836 to define the invention that an applicant believes is patentable. See Act of July 4, 1836, ch. 357, § 6, 5 Stat. 117. Since that time, the term has represented that portion of the specification that defines the patent owner’s property rights in the invention. See Corning Glass Works v. Sumitomo Elec. U.S.A., Inc., 868 F.2d 1251, 1257–58 (Fed. Cir. 1989) (“A claim in a patent provides the metes and bounds of the right which the patent confers on the patentee to exclude others from making, using, or selling the protected invention.”). Accordingly, the current patent statutes require that “the specification shall conclude with one or more claims particularly pointing out and distinctly claiming the subject matter which the applicant regards as his invention.” 35 U.S.C. § 112 (1994).13

In the 1992 case General Foods v. Studiengesellschaft, the Federal Circuit referred to the U.S. Supreme Court’s Motion Picture Patents 1917 opinion and a pre-Federal Circuit patent appeal case14 when it explained: Preliminarily, in order to better focus on the crucial aspects of the patents under discussion, we make the following elementary observations about patent claims. The patent document which grants the patentee a right to exclude others and hence bestows on the owner the power to license, consists of two primary parts: (1) a written description of the invention, which may and here does include drawings, called the “specification,” enabling those skilled in the art to practice the invention, and (2) claims which define or delimit the scope of the legal protection which the government grant gives the patent owner, the patent “monopoly.” As stated by Judge Lane, who served on both of our predecessor courts, in In re Vogel, 422 F.2d 438 (CCPA 1970), “A claim is a group of words defining only the boundary of the patent monopoly.” (Emphasis ours.) The Supreme Court has likened patent claims to the description of real property in a deed which sets the bounds to the grant which it contains. It is to the claims of every patent, therefore, that we must turn when we are seeking to determine what the invention is, the exclusive use of which is given to the inventor by the grant provided for in the statute,—“He can claim nothing beyond them.” Motion Pictures Patents Co. v. Universal Film Mfg. Co., 243 U.S. 502, 510, 61 L. Ed. 871, 37 S. Ct. 416 (1917)(emphasis ours).15

13. Hoechst-Roussel Pharm. Inc. v. Lehman, 109 F.3d 756, 758 (Fed. Cir. 1997). 14. The U.S. Court of Appeals for the Federal Circuit was established in 1982 to hear, inter alia, all appeals from lower courts involving patent law issues. As a consequence, Federal Circuit decisions are a major source of U.S. patent law jurisprudence. 15. General Foods Corp. v. Studiengesellschaft Kohle mbH, 972 F.2d 1272, 1274 (Fed. Cir. 1992) (emphasis in original).

38


Most recently, in all four of its currently leading cases on claim construction the Federal Circuit has consistently reaffirmed the principle that the claims, and only the claims, define the scope of the patented subject matter— and therefore, the scope of the patent grant. For example, in Phillips v. AWA Corp., the court stated: It is a “bedrock principle” of patent law that “the claims of a patent define the invention to which the patentee is entitled the right to exclude.” Innova, 381 F.3d at 115; see also Vitronics, 90 F.3d at 1582 (“we look to the words of the claims themselves . . . to define the scope of the patented invention”); Markman, 52 F.3d at 980 (“The written description part of the specification itself does not delimit the right to exclude. That is the function and purpose of claims.”). That principle has been recognized since at least 1836, when Congress first required that the specification include a portion in which the inventor “shall particularly specify and point out the part, improvement, or combination, which he claims as his own invention or discovery.” Act of July 4, 1836, ch. 357, § 6, 5 Stat. 117, 119. In the following years, the Supreme Court made clear that the claims are “of primary importance, in the effort to ascertain precisely what it is that is patented.” Merrill v. Yeomans, 94 U.S. 568, 570, 24 L. Ed. 235, 1877 Dec. Comm’r Pat. 279 (1877).16

In its en banc Markman decision the Federal Circuit said, “[t]he written description part of the specification itself does not delimit the right to exclude. That is the function and purpose of the claims.”17 Then in Vitronics, the court described this approach: “First, we look to the words of the claims themselves, both asserted and nonasserted, to define the scope of the patented invention.”18 Finally, in Innova, the court summarized the law as follows: It is a bedrock principle of patent law that the claims of a patent define the invention to which the patentee is entitled the right to exclude. Aro Mfg., Co. v. Convertible Top Replacement Co., 365 U.S. 336, 339, 5 L. Ed. 2d 592, 81 S. Ct. 559, 1961 Dec. Comm’r Pat. 635 (1961) (“The claims made in the patent are the sole measure of the grant.”); Altoona Publix. Theaters, Inc. v. Am. Tri-Ergon Corp., 294 U.S. 477, 747, 79 L. Ed. 1005, 55 S. Ct. 455, 1935 Dec. Comm’r Pat. 785 (1935) (“Under the statute it is the claims of the patent which define the invention.”); Smith v. Snow, 294 U.S. 1, 11, 79 L. Ed. 721, 55 S. Ct. 279, 1935 Dec. Comm’r Pat. 757 (1935) (“The claims of the patent, not its specifications, measure the invention.”); Cont’l Paper Bag Co. v. E. Paper Bag Co., 210 U.S. 405, 419,

16. Phillips v. AWH Corp., 415 F.3d 1303, 1312 (Fed. Cir. 2005) (en banc). 17. Markman v. Westview Instruments, Inc., 52 F.3d 967, 980 (Fed. Cir. 1995) (en banc), aff ’d, 517 U.S. 370 (1996). 18. Vitronics Corp. v. Conceptronic, Inc., 90 F.3d 1576, 1582 (Fed. Cir. 1996).

Evidence for Claim Construction 39 52 L. Ed. 1122, 28 S. Ct. 748, 1908 Dec. Comm’r Pat. 594 (1908) (“In making his claim the inventor is at liberty to choose his own form of expression, and while the courts may construe the same in view of the specifications and the state of the art, they may not add to or detract from the claim.” (citation omitted)); White v. Dunbar, 119 U.S. 47, 52, 30 L. Ed. 303, 7 S. Ct. 72, 1886 Dec. Comm’r Pat. 494 (1866) (“The claim is a statutory requirement, prescribed for the very purpose of making the patentee define precisely what his invention is; and it is unjust to the public . . . to construe it in a manner different from the plain import of its terms.”); Merrill v. Yeomans, 94 U.S. 568, 570, 24 L. Ed. 235, 1877 Dec. Comm’r Pat. 279 (1876) (“[The statutorily required] distinct and formal claim is, therefore, of primary importance, in the effort to ascertain precisely what it is that is patented to the appellant in this case.”); SRI Int’l v. Matsushita Corp. of Am., 775 F.2d 1107, 1121 (Fed. Cir. 1985) (en banc) (“It is the claims that measure the invention.”). Attending this principle, a claim construction analysis must begin and remain centered on the claim language itself, for that is the language the patentee has chosen to “particularly point[] out and distinctly claim[] the subject matter which the patentee regards as his invention.” Interactive Gift Express, Inc. v. Compuserve, Inc., 256 F.3d 1323, 1331 (Fed. Cir. 2001) (quoting 35 U.S.C. § 112, P2); see also Johnson Worldwide Assocs., Inc. v. Zebco Corp., 175 F.3d 985, 989—90 (Fed. Cir. 1999).19

With the importance of a patent’s claim now being well established, we turn now to the equally important and indeed essential task of claim construction.

III. Evidence for Claim Construction As discussed above, as a patent’s claims are of central importance to virtually all matters related to patents, claim construction is of paramount importance. To ensure consistency, U.S. courts have established an ordered system of claim construction under which these claims are construed based upon specific evidence. As discussed in detail below, U.S. courts have established two broad categories of evidence for claim construction: intrinsic and extrinsic evidence. Intrinsic evidence consists of a patent’s claims and specification, as well as its prosecution history in the U.S. Patent Office and any prior art cited in the application or prosecution. Extrinsic evidence is everything that is not intrinsic evidence.

19. Innova/Pure Water, Inc. v. Safari Water Filtration Sys., 381 F.3d 1111, 1115–16 (Fed. Cir. 2004).

40


Courts have instructed that claims be construed based only on intrinsic evidence. Extrinsic evidence may be consulted at any time during claim construction, but may only be used to help in understanding the meaning of claim terms based on the intrinsic evidence. For example, extrinsic evidence such as a technical dictionary may be consulted to determine the meaning of a claim term to one of ordinary skill in the art from the intrinsic evidence. Extrinsic evidence may also be used in claim construction if a claim’s meaning cannot be unambiguously determined based on intrinsic evidence alone. However, the meaning of a claim term must be construed based on the intrinsic evidence, even if it contradicts the extrinsic evidence. Moreover, U.S. courts have instructed that claims must be construed based on a hierarchical division of intrinsic evidence ranked by importance. A claim’s terms comprise the most important intrinsic evidence for claim construction, with a patent’s specification being the second-most important. A patent’s prosecution history follows the claims and specification in order of importance. Practically, this means that if different forms of intrinsic evidence indicate different possible claim constructions, the meaning derived from the most important evidence should control. Thus, generally the meaning of a claim term is first based on the term itself; other terms in the claims dominate the meaning of a term based on the specification; which dominates the meaning of a term based on the prosecution history. However, there are circumstances in which a patent’s specification or prosecution history can dictate the meaning of a claim term, even if different from the meaning based on other intrinsic evidence. For example, if a patent’s specification clearly provides a definition for a claim term, generally that meaning is given to the term. Similarly, if a patentee clearly represented to the Patent Office during prosecution that a claim term has a specific meaning, generally that meaning is given to the term.

A. Background: Pre-Phillips Law 1. Generally The Federal Circuit has long defined two separate types of evidence that may be considered in construing the meaning of a patent’s claims: intrinsic and extrinsic. As discussed below, the definitions of intrinsic and extrinsic evidence have not changed over time; however, the law concerning when different types of intrinsic and extrinsic evidence may be used and the relative weight of different types of this evidence has changed. In 2005, the Federal Circuit greatly clarified the use of evidence in claim construction in its en banc Phillips decision on claim construction.20

20. Phillips, 415 F.3d at 1303.

Evidence for Claim Construction 41

2. Intrinsic and Extrinsic Evidence Defined The Federal Circuit has long defined intrinsic evidence as “the patent claim, specification and file history.”21 Conversely, the Federal Circuit has long defined extrinsic evidence as, quite literally, everything that is not intrinsic evidence. Therefore, extrinsic evidence “consists of all evidence external to the patent and prosecution history, including expert and inventor testimony, dictionaries, and learned treatises.”22 3. Intrinsic Evidence Is Always to Be Considered in Claim Construction The law has long been settled that intrinsic evidence is always to be considered for claim construction. For example, in Markman, the Federal Circuit stated: “To ascertain the meaning of claims, we consider three sources: The claims, the specification, and the prosecution history.” Unique Concepts, Inc. v. Brown, 939 F.2d 1558, 1561 (Fed. Cir. 1991); accord Autogiro Co. of Am. v. United States, 181 Ct. Cl. 55, 384 F.2d 391, 396–98 (Ct. Ct. 1967). . . . Claims must be read in view of the specification, of which they are a part. Autogiro, 384 F.2d at 397; see Winans v. Denmead, 56 U.S. (15 How.) at 338; Bates v. Coe, 98 U.S. at 38–39. The specification contains a written description of the invention that must enable one of ordinary skill in the art to make and use the invention. For claim construction purposes, the description may act as a sort of dictionary, which explains the invention and may define terms used in the claims. . . . To construe claim language, the court should also consider the patent’s prosecution history. . . . Graham v. John Deere Co., 383 U.S. 1, 33, 473, 15 L. Ed. 2d 545, 86 S. Ct. 684 (1966). This “undisputed public record” of proceedings in the Patent and Trademark Office is of primary significance in understanding the claims. See Autogiro, 384 F.2d at 397 (the “file wrapper” is “part[] of the patent”). The court has broad power to look as a matter of law to the prosecution history of the patent in order to ascertain the true meaning of language used in the patent claims: The construction of the patent is confirmed by the avowed understanding of the patentee, expressed by him, or on his half [sic], when his application for the original patent was pending. . . . When a patent bears on its

21. Vitronics, 90 F.3d at 1582 (the term “a patent’s file history” means the same thing as a patent’s prosecution history, and refers to the prosecution history in the U.S. Patent Office of the patent application(s) that issued as the subject patent). 22. Markman, 52 F.3d at 980 (citing Seymour v. Osborne, 78 U.S. 516, 546 (1870)), aff ’d, 517 U.S. 370 (1996); Vitronics, 90 F.3d at 1583.

42 Chapter 2 Patent Law Principle I face a particular construction, inasmuch as the specification and claim are in the words of the patentee, . . . such a construction may be confirmed by what the patentee said when he was making his application. Goodyear Dental Vulcanite Co. v. Davis, 102 U.S. 222, 227, 26 L. Ed. 149 (1880); see Singer Mfg. Co., 192 U.S. at 278–85 (construing claims in light of the prosecution history as a matter of law).23

4. Pre-Phillips Consideration of Extrinsic Evidence Prior to the Phillips case, it was not entirely clear from Federal Circuit jurisprudence exactly when it was proper to rely on extrinsic evidence in claim construction or what types of extrinsic could be relied upon. Some Federal Circuit cases seemed to clearly put forth that it was proper to rely extrinsic evidence in claim construction “only when the intrinsic evidence is insufficient to establish the clear meaning of the asserted claim.”24 For example, in Vitronics, a leading pre-Phillips case on claim construction, the Federal Circuit stated: In most situations, an analysis of the intrinsic evidence alone will resolve any ambiguity in a disputed claim term. In such circumstances, it is improper to rely on extrinsic evidence. See, e.g., Pall Corp. v. Micron Separations, Inc., 66 F.3d 1211, 1216 (Fed. Cir. 1995) (“In construing the claims we look to the language of the claims, the specification, and the prosecution history. Extrinsic evidence may also be considered, if needed to assist in determining the meaning or scope of technical terms in the claims.”)(citations omitted, emphasis added); Hormone, 904 F.2d at 1562 (“Claim interpretation involves a review of the specification, the prosecution history, the claims (including unasserted as well as asserted claims), and, if necessary, other extrinsic evidence, such as expert testimony.”) (citations omitted, emphasis added). In those cases where the public record unambiguously describes the scope of the patented invention, reliance on any extrinsic evidence is improper.25

However, other Federal Circuit opinions seemed to indicate that extrinsic evidence could be considered, if not relied upon, more broadly. For example, in Pitney Bowes, the court indicated: Vitronics does not prohibit courts from examining extrinsic evidence, even when the patent document is itself clear. . . . Although the patent file may often

23. Markman, 52 F.3d at 979–80. 24. Zodiac Pool Care, Inc. v. Hoffinger Indus, Inc., 206 F.3d 1408, 1414 (Fed. Cir. 2000). 25. Vitronics, 90 F.3d at 1583 (emphasis in original).

Evidence for Claim Construction 43 be sufficient to permit the judge to interpret the technical aspects of the patent properly, consultation of extrinsic evidence is particularly appropriate to ensure that his or her understanding of the technical aspects of the patent is not entirely at variance with the understanding of one skilled in the art. . . .26

a) Dictionary Definitions The pre-Phillips inconsistency of legal guidance by the Federal Circuit on when to rely on extrinsic evidence for construing claims was especially true regarding dictionary, treatise, and encyclopedia definitions. As explained by the Federal Circuit in Phillips: Some of this court’s cases have suggested a somewhat different approach to claim construction, in which the court has given greater emphasis to dictionary definitions of claim terms and has assigned a less prominent role to the specification and the prosecution history. The leading case in this line is Texas Digital Sys., Inc. v. Telegenix, Inc., 308 F.3d 1193 (Fed. Cir. 2002).27

In Texas Digital and its related line of cases, the Federal Circuit created a rebuttable presumption that the proper construction of claim terms was the definition of the terms taken from dictionaries, treatises, and/or encyclopedias unless the intrinsic evidence rebutted that presumption by expressly defining a term otherwise or by clearly disclaiming or disavowing the full scope of the dictionary, treatise, or encyclopedia definitions.28 In Texas Digital, the Federal Circuit stated, “dictionaries, encyclopedias and treatises are particularly useful resources to assist the court in determining the ordinary and customary meanings of claim terms.”29 Those texts, the court explained, are “objective resources that serve as reliable sources of information on the established meanings that would have been attributed to the terms of the claims by those of skill in the art,” and they “deserve no less fealty in the context of claim construction” than in any other area of law.30 The court added that because words often have multiple dictionary meanings, the intrinsic record must be consulted to determine which of the different possible dictionary meanings is most consistent with the use of the term in question by the inventor. If more than one dictionary definition is consistent with the use

26. Pitney Bowes, Inc. v. Hewlett-Packard Co., 182 F.3d 1298, 1308–09 (Fed. Cir. 1999) (citations omitted). 27. Phillips v. AWH Corp., 415 F.3d 1303, 1319 (Fed. Cir. 2005) (en banc). 28. Texas Digital Sys., Inc. v. Telegenix, Inc., 308 F.3d 1193, 1203–04 (Fed. Cir. 2002), criticized in Phillips, 415 F.3d at 1320. 29. Id. at 1202. 30. Id. at 1203.

44


of the words in the intrinsic record, the court indicated, “[t]he claim terms may be construed to encompass all such consistent meanings.”31 The Texas Digital court further explained that the patent’s specification and prosecution history must be consulted to determine if the patentee has used “the words [of the claim] in a manner clearly inconsistent with the ordinary meaning reflected, for example, in a dictionary definition.”32 The court identified two circumstances in which such an inconsistency may be found. First, the court stated: “The presumption in favor of a dictionary definition will be overcome where the patentee, acting as his or her own lexicographer, has clearly set forth an explicit definition of the term different from its ordinary meaning.”33 Second, “the presumption also will be rebutted if the inventor [in the specification or prosecution history] has disavowed or disclaimed scope of coverage, by using words or expressions of manifest exclusion or restriction, representing a clear disavowal of claim scope.”34 The Texas Digital court added that it was necessary to consult first the extrinsic evidence of dictionaries and the like to avoid the court’s proscription of not reading limitations from the specification into the claims.35 However, as explained in Section III[B] below, the Federal Circuit’s en banc Phillips decision in 2005 took issue with the role and level of importance the Texas Digital line of cases placed on extrinsic evidence in the form of dictionaries, treatises, and encyclopedias. As indicated below, Phillips effectively eliminated the presumption under the Texas Digital line of cases that the dictionary, treatise, and/or encyclopedia definition was the proper construction unless the intrinsic evidence rebutted that presumption.36 Instead, Phillips provides a more reasoned approach to claim construction wherein the intrinsic evidence is always of primary importance, but extrinsic evidence (such as dictionaries and the like) may be consulted to inform the meaning of the claims in light of the intrinsic evidence.37

B. Phillips v. AWH Corp. It was against the above-described inconsistent teaching on when to use extrinsic evidence in claim construction (and what weight to place on such evidence) that the Federal Circuit issued its en banc claim construction

31. Id. 32. Id. at 1204. 33. Id. See also Sinorgchem Co. v. ITC, 511 F.3d 1132, 1138 (Fed. Cir. 2007) (“We have frequently found that a definition set forth in the specification governs the meaning of the claims.”). 34. Texas Digital, 308 F.3d at 1204. 35. Id. at 1204. 36. Phillips v. AWH Corp., 415 F.3d 1303, 1321–24 (Fed. Cir. 2005) (en banc). 37. Id.


decision, Phillips v. AWH Corp.38 While many aspects of Phillips are discussed in more detail in Section IV below, for purposes of this section—which addresses what and how evidence is properly used in claim construction—it can be summarized that Phillips reaffirmed the primary importance of intrinsic evidence to claim construction. Further, Phillips subdivided intrinsic evidence into different types and levels of evidentiary importance. Phillips also reaffirmed that extrinsic evidence can be considered at any time in claim construction, but it must always be considered in the context of the intrinsic evidence and never be used to contradict clear intrinsic evidence. 1. Eliminating the Texas Digital Dictionary Presumption One of the primary holdings of the Federal Circuit’s en banc decision in Phillips eliminated the dictionary presumption of the Texas Digital line of cases. As explained in Section III[B] above, prior to the Phillips opinion, Texas Digital Sys., Inc. v. Telegenix, Inc.39 was the leading case in a line of Federal Circuit cases that held that extrinsic evidence in the form of dictionary, treatise, and encyclopedia definitions of claim terms was presumed to be the proper method for construction of claim terms unless this presumption was expressly rebutted in the patent’s specification or file history by the patentee either: (a) clearly defining the claim term otherwise; or (b) clearly disclaiming or disavowing the scope of the dictionary definition.40 In addressing Texas Digital and related cases, the Phillips court stated: Although the principles [of claim construction based on the intrinsic evidence (first the ordinary meaning of the claim terms, next the specification, then the file history)] have been articulated [by the Federal Circuit] on numerous occasions, some of this court’s cases have suggested a somewhat different approach to claim construction, in which the court has given greater emphasis to dictionary definitions of claim terms and has assigned a less prominent role to the specification and the prosecution history. The leading case in this line is Texas Digital Sytems., Inc. v. Telegenix, Inc., 308 F.3d 1193 (Fed. Cir. 2002). . . . [T]he methodology [of Texas Digital] placed too much reliance on extrinsic sources such as dictionaries, treatises, and encyclopedias and too little on intrinsic sources, in particular the specification and file history. . . . In effect, the Texas Digital approach limits the role of the specification in claim construction to serving as a check on the dictionary meaning of a claim term if the specification requires the court to conclude that fewer than all of the dictionary definitions apply, or if the specification contains a sufficiently

38. Phillips, 415 F.3d at 1303. 39. Texas Digital, 308 F.3d at 1193. 40. Id. at 1202.

46 Chapter 2 Patent Law Principle I specific alternative definition of disavowal. See, e.g., Texas Digital, 308 F.3d at 1202 (“unless compelled otherwise, a court will give a claim term the full range of its ordinary meaning”). . . . That approach, in our view, improperly restricts the role of the specification in claim construction. Assigning such a limited role to the specification, and in particular requiring that any definition of claim language in the specification be express, is inconsistent with our rulings that the specification is “the single best guide to the meaning of a disputed term,” and that the specification “acts as a dictionary when it expressly defines terms used in the claims or when it defines terms by implication.” Vitronics, 90 F.3d at 1582; Irdeto Access, Inc. v. Echostar Satellite Corp., 383 F.3d 1295, 1300 (Fed. Cir. 2004) (“Even when guidance is not provided in explicit definitional format, the specification may define claim terms by implication such that the meaning may be found in or ascertained by a reading of the patent documents.”)(citations omitted); Novartis Pharms. Corp. v. Abbott Labs., 375 F.3d 1328, 1334–35 (Fed. Cir. 2004) (same); Bell Atl. Network Servs., Inc. v. Covad Communications Group, Inc., 262 F.3d 1258, 1268 (Fed. Cir. 2001) (“[A] claim term may be clearly redefined without an explicit statement of redefinition.”).41

2. Extrinsic Evidence May Be Considered at Any Time to Inform Claim Construction While eliminating Texas Digital dictionary presumption, the Phillips court retained some of the advances the Texas Digital line of cases had given to extrinsic evidence in claim construction. As discussed in Section III[B] above, prior to Phillips, some Federal Circuit cases held that extrinsic evidence was to be relied upon “only when the intrinsic evidence is insufficient to establish the clear meaning of the asserted claim.”42 Rather than entirely precluding the use of all extrinsic evidence (including dictionaries and the like) unless the meaning of a claim could not be determined solely from the intrinsic evidence (as some Federal Circuit cases had implied),43 the Phillips court held that extrinsic evidence could be consulted at any time to inform claim construction based on the intrinsic evidence: Although we have emphasized the importance of intrinsic evidence in claim construction, we have also authorized district courts to rely on extrinsic evidence, which “consists of all evidence external to the patent and prosecution history, including expert and inventor testimony, dictionaries, and learned treatises.”

41. Phillips, 415 F.3d at 1319–21. 42. E.g., Zodiac Pool Care, Inc. v. Hoffinger Indus, Inc., 206 F.3d 1408, 1414 (Fed. Cir. 2000). 43. Id.

Evidence for Claim Construction 47 Markman, 52 F.3d at 980, citing Seymour v. Osborne, 78 U.S. 516, 546 (1870); see also Vitronics, 90 F.3d at 1583.44

The court further stated: As we have noted above, however, we do not intend to preclude the appropriate use of dictionaries. Dictionaries or comparable sources are often useful to assist in understanding the commonly understood meaning of words and have been used both by our court and the Supreme Court in claim interpretation.45

While cautioning that “we have explained that [extrinsic evidence] is ‘less significant than the intrinsic record in determining ‘the legally operative meaning of claim language,’’”46 the Phillips court noted: Within the class of extrinsic evidence, the court has observed that dictionaries and treatises can be useful in claim construction. See Renishaw 158 F.3d at 1250; Rexnord, 274 F.3d at 1344. We have especially noted the help that technical dictionaries may provide to a court “to better understand the underlying technology” and the way in which one of skill in the art might use the claim terms. Vitronics, 90 F.3d at 1584 n.6. Because dictionaries, and especially technical dictionaries, endeavor to collect the accepted meanings of terms used in various fields of science and technology, those resources have been properly recognized as among the many tools that can assist the court in determining the meaning of particular terminology to those of skill in the art of the invention. See Teleflex, Inc. v. Ficosa N. Am. Corp., 299 F.3d 1313, 1325 (Fed. Cir. 2002). Such evidence, we have held, may be considered if the court deems it helpful in determining “the true meaning of language used in the patent claims.” Markman, 52 F.3d at 980. We have also held that extrinsic evidence in the form of expert testimony can be useful to a court for a variety of purposes, such as to provide background on the technology at issue, to explain how an invention works, to ensure that the court’s understanding of the technical aspects of the patent is consistent with that of a person of skill in the art, or to establish that a particular term in the patent or the prior art has a particular meaning in the pertinent field. See Pitney Bowes, Inc. v. Hewlett-Packard Co., 182 F.3d 1298, 1308–09 (Fed. Cir. 1999); Key Pharms. v. Hercon Lab. Corp., 161 F.3d 709, 716 (Fed. Cir. 1998).47

44. Phillips, 415 F.3d at 1317. 45. Id. at 1322. 46. Phillips, 415 F.3d at 1317 (quoting C.R. Bard, Inc. v. U.S. Surgical Corp., 383 F.3d 858, 862 (Fed. Cir. 2004) (quoting Vanderlande Indus. Nederland BV v. Int’l Trade Comm’n, 366 F.3d 1311, 1318 (Fed. Cir. 2004))). 47. Id. at 1318.

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C. Current Law of Evidence for Claim Construction Following the Phillips case in 2005, as discussed in Section III[B] above the law of evidence for claim construction became rather settled. It is summarized below. 1. Overview The Phillips court rearticulated long-standing law that “it is a ‘bedrock principle’ of patent law that ‘the claims of a patent define the invention to which the patentee is entitled the right to exclude.’”48 Therefore, all claim construction begins with—and remains focused on—the intrinsic evidence of the claims.49 The words of the claims are generally given their ordinary and customary meaning,50 which “is the meaning that the term would have to a person of ordinary skill in the art in question at the time of the invention.”51 “When interpreting claims, we inquire into how a person of ordinary skill in the art would have understood [the] claim terms at the time of the invention.”52 “The inquiry into how a person of ordinary skill in the art understands a claim term provides an objective baseline from which to begin claim interpretation.”53 “Importantly, the person of ordinary skill in the art is deemed to read the claim term not only in the context of the particular claim in which the disputed term appears, but in the context of the entire patent, including the specification.”54 Thus, the claims “must be read in view of the [intrinsic evidence of the] specification, of which they are a part.”55 Thus, in regarding evidence for claim construction, intrinsic evidence in the form of the individual words of the claims, and the claims themselves, is of primary importance. However, intrinsic evidence in the form of the

48. Id. at 1313 (quoting Innova/Pure Water, Inc. v. Safari Water Filtration Sys., 381 F.3d 1111, 1115 (Fed. Cir. 2004); Nystrom v. Trex Co., Inc., 424 F.3d 1136, 1142 (Fed. Cir. 2005); Callicrate v. Wadsworth Mfg., Inc., 427 F.3d 1361, 1366 (Fed. Cir. 2005). 49. Vitronics Corp. v. Conceptronic, Inc., 90 F.3d 1576, 1582 (Fed. Cir. 1996); Nystrom, 424 F.3d at 1142. 50. Vitronics, 90 F.3d at 1582; Nystrom, 424 F.3d at 1142. 51. Phillips, 415 F.3d at 1313; Nystrom, 424 F.3d at 1142. 52. Pfizer, Inc. v. Teva Pharms., USA, Inc., 429 F.3d 1364, 1372–73 (Fed. Cir. 2005) (citing Phillips, 415 F.3d at 1313); see also, e.g., Cook Biotech Inc. v. Acell, Inc., 460 F.3d 1365,1372–73 (Fed. Cir. 2006). 53. Phillips, 415 F.3d at 1313; Pfizer, 429 F.3d at 1373. 54. Phillips, 415 F.3d at 1313. 55. Markman v. Westview Instruments, Inc., 52 F.3d 967, 979 (Fed. Cir. 1995) (en banc), aff ’d, 517 U.S. 370 (1996); Nystrom, 424 F.3d at 1142.


specification also plays a very important role in defining the claims. As stated by the Phillips court: “‘The [claim] construction that stays true to the claim language and most naturally aligns with the patent’s description of the invention will be, in the end, the correct construction.’”56 In addition to the written description, intrinsic evidence in the form of “the prosecution history can often inform the meaning of the claim language by demonstrating how the inventor understood the invention and whether the inventor limited the invention in the course of prosecution, making the claim scope narrower than it would otherwise be.”57 Furthermore, extrinsic evidence, such as dictionary, treatise, and encyclopedia definitions, “concerning relevant scientific principles, the meaning of technical terms, and the state of the art,” may be considered at any time to aid the court in construing claims based on the intrinsic evidence.58 As the Phillips court stated: “We have especially noted the help that technical dictionaries may provide to a court to ‘better understand the underlying technology’ and the way in which one of skill in the art might use the claim terms.”59 The Phillips court explained: Because dictionaries, and especially technical dictionaries, endeavor to collect the accepted meanings of terms used in various fields of science and technology, those resources have been properly recognized as among the many tools that can assist the court in determining the meaning of a particular terminology to those of skill in the art of the invention. Such [extrinsic] evidence, we have held, may be considered [at any time] in determining the “true meaning of language used in the patent claims.”60

However, Phillips cautioned that “extrinsic evidence in general [is] less reliable than the [intrinsic evidence of the] patent and its prosecution history.”61 Furthermore, “undue reliance on extrinsic evidence poses the risk that it will be used to change the meaning of claims in derogation of the ‘indisputable public records consisting of [the intrinsic evidence of] the claims, the specification and the prosecution history,’ thereby undermining the public notice

56. Phillips, 415 F.3d at 1316 (quoting Renishaw PLC v. Marposs Societa’ per Azioni, 158 F.3d 1243, 1250 (Fed. Cir. 1998)); Nystrom, 424 F.3d at 1142. 57. Phillips, 415 F.3d at 1317; Nystrom, 424 F.3d at 1142. 58. Phillips, 415 F.3d at 1313 (quoting Innova/Pure Water, Inc. v. Safari Water Filtration Sys., Inc., 381 F.3d 1111, 1116 (Fed. Cir. 2004)). 59. Id. at 1318 (quoting Vitronics Corp. v. Conceptronic, Inc., 90 F.3d 1576, 1584 n.6 (Fed. Cir. 1996)). 60. Id. (quoting Markman, 52 F.3d at 980). 61. Phillips, 415 F.3d at 1319.

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function of patents.”62 Therefore, extrinsic evidence may never be used to “arrive at a claim construction that is clearly at odds with the construction mandated by the intrinsic evidence.”63 2. The Timing for Evidence The Federal Circuit has clearly held in several cases that evidence for claim construction must show the “meaning that the term would have . . . at the time of the invention, i.e., as of the effective filing date of the patent application.”64 3. Intrinsic Evidence Intrinsic evidence is defined by the Federal Circuit as “the patent claim, specification and file history.”65 All intrinsic evidence is always to be considered for claim construction. As stated by the Federal Circuit in its en banc Markman decision on claim construction: “To ascertain the meaning of claims, we consider three sources: The claims, the specification, and the prosecution history.” Unique Concepts, Inc. v. Brown, 939 F.2d 1558, 1561 (Fed. Cir. 1991); accord Autogiro Co. of Am. V. United States, 181 Ct. Cl. 55, 384 F.2d 391, 396–98 (Ct. Ct. 1967). . . .66

a) The Claims As discussed in Section II above, the claims define the scope of the patent grant. Therefore, it is the language of the claims—and only the claims—that is

62. Id. (quoting Southwall Techs., Inc. v. Cardinal IG Co., 54 F.3d 1570, 1578 (Fed. Cir. 1995)). 63. Elkay Mfg. Co. v. Ebco Mfg. Co., 192 F.3d 973, 977 (Fed. Cir. 1999); Markman, 52 F.3d at 981 (extrinsic evidence may not be used “for the purpose of varying or contradicting the terms in the claims”); Vitronics, 90 F.3d at 1584; Key Pharms. v. Hercon Labs. Corp., 161 F.3d 709, 716 (Fed. Cir. 1998) (“What is disapproved of is an attempt to use extrinsic evidence to arrive at a claim construction that is clearly at odds with the claim construction mandated by the claims themselves, the written description, and the prosecution history, in other words, the written record of the patent.”). 64. Phillips, 415 F.3d at 1313; Innova/Pure Water, Inc. v. Safari Water Filtration Sys., 381 F.3d 1111, 1116 (Fed. Cir. 2004) (“A court construing a patent claim seeks to accord a claim the meaning it would have to a person of ordinary skill in the art at the time of the invention.”); PC Connector Solutions, L.L.C. v. SmartDisk Corp., 406 F.3d 1359 (Fed. Cir. 2005) (meaning of claim “must be interpreted as of [the] effective filing date” of the patent application); Schering Corp. v. Amgen Inc., 222 F.3d 1347, 1353 (Fed. Cir. 2000) (“In sum, this court must determine what the term meant at the time the patentee filed the ’901 application.”). 65. Vitronics, 90 F.3d at 1582 (the term “a patent’s file history” means the same thing as a patent’s prosecution history, and refers to the prosecution history in the U.S. Patent Office of the patent application(s) that issued as the subject patent). 66. Markman, 52 F.3d at 979.


to be construed in claim construction. As stated by the Federal Circuit in Innova: It is a bedrock principle of patent law that the claims of a patent define the invention to which the patentee is entitled the right to exclude. . . . Attending this principle, “a claim construction analysis must begin and remain centered on the claim language itself, for that is the language the patentee has chosen to “particularly point[] out and distinctly claim[] the subject matter which the patentee regards as his invention.”67

b) The Specification As stated in Markman: Claims must be read in view of the specification, of which they are a part. Autogiro, 384 F.2d at 397; see Winans v. Denmead, 56 U.S. (15 How.) at 338; Bates v. Coe, 98 U.S. at 38–39. The specification contains a written description of the invention that must enable one of ordinary skill in the art to make and use the invention. For claim construction purposes, the description may act as a sort of dictionary, which explains the invention and may define terms used in the claims. . . .68

c) The Prosecution History The Markman court explained the role of a patent’s prosecution history in claim construction as follows: To construe claim language, the court should also consider the patent’s prosecution history. . . . Graham v. John Deere Co., 383 U.S. 1, 33, 473, 15 L. Ed. 2d 545, 86 S. Ct. 684 (1966). This “undisputed public record” of proceedings in the Patent and Trademark Office is of primary significance in understanding the claims. See Autogiro, 384 F.2d at 397 (the “file wrapper” is “part[] of the patent”). The court has broad power to look as a matter of law to the prosecution history of the patent in order to ascertain the true meaning of language used in the patent claims: The construction of the patent is confirmed by the avowed understanding of the patentee, expressed by him, or on his half [sic], when his application for the original patent was pending. . . . When a patent bears on its face a

67. Innova, 381 F.3d at 115–16 (emphasis added) (quoting Interactive Gift Express, Inc. v. Compuserve, Inc., 256 F.3d 1323, 1331 (Fed. Cir. 2001) (quoting 35 U.S.C. § 112, P 2)); Johnson Worldwide Assocs., Inc. v. Zebco Corp., 175 F.3d 985, 989–90 (Fed. Cir. 1999). 68. Markman, 52 F.3d at 979.

52 Chapter 2 Patent Law Principle I particular construction, inasmuch as the specification and claim are in the words of the patentee, . . . such a construction may be confirmed by what the patentee said when he was making his application. Goodyear Dental Vulcanite Co. v. Davis, 102 U.S. 222, 227, 26 L. Ed. 149 (1880); see Singer Mfg. Co., 192 U.S. at 278–85 (construing claims in light of the prosecution history as a matter of law).69

(1) The Scope of a Patent’s Prosecution History The prosecution history of a U.S. patent includes both the prosecution history in the U.S. Patent Office of the U.S. patent application that was issued as the subject patent and the prosecution histories of other U.S. patents and/or patent applications70 that are “formally” related to the subject patent and have at least one claim term in common.71 Applications that are formally related include: (a) parent and ancestor applications, from which the patent at issue is related as, or via, continuation, divisional, or continuation-in-part applications; (b) sibling applications to the patent at issue that are related to the patent at issue by pending from a common ancestor or parent application as, or via, continuation, divisional, or continuation-in-part applications; and (c) child and grandchild applications that are related to the patent at issue as, or via, continuation, divisional, or continuation-in-part applications.72 Therefore, the prosecution history of a patent may include multiple applications related to the patent that have at least one claim term in common with the patent; it can also include applications that were prosecuted in the U.S. Patent Office before, during, or even after prosecution of the application that issued as the patent. (a) Prior Related U.S. Applications Federal Circuit law is well-established that the intrinsic evidence for claim construction for a patent includes not only the application that issued as the

69. Id. at 980. 70. The term the prosecution history of related U.S. patent applications means the same thing as the term the prosecution history of related U.S. patents. Both refer to the prosecution history in the U.S. Patent Office of related U.S. patent applications. If the related patent application issued as the subject U.S. patent, its prosecution history is typically referred to as “the prosecution history of the patent” that issued from the related application. If the related application did not issue as the subject patent (for example, it was a prior application), its prosecution history is typically referred to as “the prosecution history of the related patent application.” 71. E.g., Goldenberg v. Cytogen, Inc., 373 F.3d 1158, 1167–68 (Fed. Cir. 2004) (formal relationship required); Microsoft Corp. v. Multi-Tech Sys., Inc., 357 F.3d 1340, 1349 (Fed. Cir. 2004); Advanced Cardiovascular Sys. v. Medtronic, Inc., 265 F.3d 1294, 1305 (Fed. Cir. 2001) (the prosecution history of a related patent must address “a limitation in common with the patent in suit”). 72. E.g., Abbott Labs. v. Dey, L.P., 287 F.3d 1097, 1105 (Fed. Cir. 2002).


patent, but also separate prior U.S. patent applications that are related by a common specification and that address at least one claim term in common with the patent. Such prior patent applications are commonly referred to as “parent” and “ancestor” applications of the patent, and the patent is related to these applications as (or via) continuation, divisional, or continuationin-part applications. This law is well summarized by the Federal Circuit in Microsoft v. Multi-Tech: In the past, we have held that the prosecution history of one patent is relevant to an understanding of the scope of a common term in a second patent stemming from the same parent application. E.g., Jonsson v. Stanley Works, 903 F.2d 812, 818 (Fed. Cir. 1990). . . .73

In the 1990 decision in Jonsson v. Stanley Works, the Federal Circuit held that the prosecution history of a parent application from which the patent at issue was a continuation application was relevant, intrinsic evidence to claim construction of the patent at issue where the same term was at issue in both prosecution histories: “Hence, the prosecution history of the [parent application] and the construction of the term ‘diffuse light’ contained in that patent, is relevant to an understanding of ‘diffuse light’ as that term is used in the [child/continuation patent at issue].”74 Numerous Federal Circuit cases have echoed the same conclusion. For example, in Alloc, Inc. v. ITC, the Federal Circuit held that statements made during the prosecution history of a parent application surrendering scope of subject matter for a particular claim limitation were binding on the interpretation of the claim limitation in all subsequent related patents having that same claim limitation: During prosecution of the U.S. parent . . . application, the patentee represented to the United States Patent and Trademark Office (USPTO) that play is “important” because it enables displacement and disassembly of connected panels. Specifically, in response to a prior art rejection under 35 U.S.C. § 102(b), the patentee stated: . . . . In response, the USPTO examiner allowed the claims over the [Section 102(b)] reference. . . .

73. Microsoft, 357 F.3d at 1349 (Fed. Cir. 2004) (statement made during prosecution of related patent operated as a disclaimer with respect to a later-issued patent); NTP, Inc. v. Research in Motion, Ltd., 418 F.3d 1282, 1293 (Fed. Cir. 2005); Verizon Servs. Corp. v. Vonage Holdings Corp., 503 F.3d 1295, 1306 (Fed. Cir. 2007) (“We have held that a statement made by the patentee during prosecution history of a patent in the same family as the patent-in-suit can operate as a disclaimer.”). 74. Jonsson v. Stanley Works, 903 F.2d 812, 818 (Fed. Cir. 1990).

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Chapter 2 Patent Law Principle I Thus, . . . the USPTO relied on the patentee’s statement distinguishing the invention from the prior art based on the invention’s ability to displace panels (“slide movably”) and to release adjacent panels by rotation about the joint. The applicant persuaded the USPTO that play enables these features. . . . As such, the applicant represented to the USPTO examiner that play facilitated its novel system set forth in the revised claims. Because the applicant invoked play to overcome the prior art, which lacked displacement and disassembly, Alloc cannot now contend that the [parent] patent claims a flooring system and method for installing that system without play. The applicant expressly disavowed systems without play during prosecution of the parent . . . application. Likewise, the independent claims of the [child] patents incorporate the same limitations adopted by the applicant to secure allowance of the parent . . . patent.75

Also, for example, in Augustine v. Gaymar, the Federal Circuit succinctly stated this law as follows: Because the prosecution history of a parent application may limit the scope of a later application using the same claim term, see Jonsson v. Stanley Works, 903 F.2d 812, 818 (Fed. Cir. 1990), these claim amendments and arguments restrict the scope of the claims in each of the later issued patents containing the [same claim] limitation.76

In Elkay Mfg. v. Ebco Mfg., the court stated: When multiple patents derive from the same initial application, the prosecution history regarding a claim limitation in any patent that has issued applies with equal force to subsequently issued patents that contain the same claim limitation.77

Finally, in 2005, in construing the claims of five patents that issued from a “string of continuation applications,” beginning with a common ancestor patent, and thus sharing the same specification,78 the court in NTP v. Research in Motion held:

75. Alloc, Inc, v. ITC, 342 F.3d 1361, 1371–72 (Fed. Cir. 2003) (internal citation omitted) (emphasis added). 76. Augustine Med., Inc. v. Gaymar Indus., Inc., 181 F.3d 1291, 1300 (Fed. Cir. 1999). 77. Elkay Mfg. Co. v. Ebco Mfg. Co., 192 F.3d 973, 980 (Fed. Cir. 1999) (emphasis added). 78. NTP, 418 F.3d at 1288–89 (“[The inventors] developed an electronic mail system that was claimed in the ’960, ’670, ’172, ’451, and ’592 patents. The ’960 patent, filed on May 20, 1991, is the parent of a string of continuation applications. The most recent patent, the ’592 patent, filed December 6, 1999, is a continuation of the ’451 patent, filed September 28, 1998. The ’451 patent, in turn, is a continuation of the ’172 patent, which itself originates from the ’670

Evidence for Claim Construction 55 Because NTP’s patents all derive from the same parent application and share many common terms, we must interpret the claims consistently across all asserted patents. See, e.g., Microsoft Corp. v. Multi-Tech Sys., Inc., 357 F.3d 1340, 1350 (Fed. Cir. 2004). . . .79

(b) Prior Related U.S. Continuation-in-Part Applications Federal Circuit precedent also holds that the intrinsic evidence of a patent that issues off a continuation-in-part application includes the parent application when: (a) there is a common term shared by the parent and the continuationin-part application; and (b) the relevant portions of the specification are in common with the continuation-in-part application. For example, in 1990, the Federal Circuit in Wang Labs v. Am. Online, Inc. indicated: Wang argues that this statement was made in the parent application and does not apply to the continuation-in-part that is the [patent at issue]. However, [the] subject matter [in the application at issue] is common to the continuationin-part application, and argument concerning the [prior art] reference was correctly viewed as applying to the common subject matter.80

In Omega v. Raytek, the Federal Circuit held: We agree with Raytek that the disclaimer from the prosecution of claims 1 of the [patent issuing off the parent application] attaches to the construction of the [claims of the patent issuing off a continuation-in-part application off the parent application] and narrows the broad scope of the asserted claims. Despite Omega’s assertions to the contrary, prosecution disclaimer may arise from disavowals made during the prosecution of ancestor patent applications. [citing, e.g., Augustine, 181 F.3d at 1300; Wang Labs., 197 F.3d at 1384; Jonsson, 903 F.2d at 818] . . . Our precedent holds . . . that an interpretation asserted in the prosecution of a parent application can also affect continuation applications, Elkay, 192 F.3d at 980, continuation-in-part applications, Wang Labs, Inc. v. Am. Online, Inc., 197 F.3d 1377, 1384 (Fed. Cir. 1999) (“This subject matter is common to the continuation-in-part application, and argument concerning the [prior art] reference was correctly viewed as applying to the common subject matter.”), and even related continuation-in-part applications arising from the same parent, Jonsson v. Stanley Works, 903 F.2d 812, 818 (Fed. Cir. 1990) (holding that when two patents issued from continuation-in-part applications derived from one

patent, a direct continuation of the parent ’960 patent. As continuations of that single parent application, these patents contain the same written descriptions as the ’960 patent.”). 79. Id. at 1293. 80. Wang Labs, Inc. v. Am. Online, Inc., 197 F.3d 1377, 1384 (Fed. Cir. 1999).

56 Chapter 2 Patent Law Principle I original application, the prosecution history of a claim limitation in the first patent to issue was properly applied to the same claim limitation in the second patent to issue). Consequently, that the [patent at issue] is a continuation-inpart of the [parent] patent does not shield it from narrowing disclaimers made during the prosecution of a parent application. . . . [T]here is a common term in dispute here. The disputed term “to outline” is the same throughout all five patents in the genealogy, including the [parent] and [the continuation-in-part] patents. The patentee made a clear and unmistakable disclaimer of claim scope in its prosecution of the parent [patent], and we presume, unless otherwise compelled, that the same claim term in the same patent or related patents carries the same construed meaning. . . . As with the [first patent at issue], the disclaimer made by the patentee during the prosecution of the [parent] flows down to the [second patent at issue]. Indeed, the [second patent at issue] is a continuation in part of the [first patent at issue], and it is settled that prosecution disclaimer attaches to progeny continuation in part applications where the same claim limitation is at issue. See Advanced Cardiovascular, 265 F.3d at 1305, Wang Labs., 197 F.3d at 1380; Jonsson, 903 F.2d at 818. Consequently, because the prosecution disclaimer made in the [parent patent] extends to the [second patent at issue], we conclude that. . . .81

(c) Related U.S. Sibling Applications It is also well-settled Federal Circuit law that “a statement made by the patentee during the prosecution history of a patent in the same family [e.g., as a sibling] as the patent-in-suit can operate as a disclaimer.”82 Therefore, the intrinsic evidence of a patent includes not only its immediate predecessor patents that are directly linked in a single lineage such as continuation or continuation-in-part applications but also sibling patents that are separate lineages off a common ancestor. For example, in Elkay v. Ebco, the Federal Circuit determined that claim scope was surrendered, with the surrender occurring during the prosecution of a separate patent application that was not related to the patent at issue by direct lineage, but was a sibling application originating from a common ancestor application. The court stated: The ’531 [the sibling patent] and the ’855 [the patent at issue] patents stem from the same genus [ancestor application]. The ’531 [sibling] patent issued on June 29,

81. Omega Eng’g, Inc. v. Raytek Corp., 334 F.3d 1314, 1333–35 (Fed. Cir. 2003) (emphasis added); Jonsson v. Stanley Works, 903 F.2d 812, 818 (Fed. Cir. 1990) (holding that when two patents issued from continuation-in-part applications derived from one original application, the prosecution history of a claim limitation in the first patent to issue was properly applied to the same claim limitation in the second patent to issue). 82. Verizon Servs. Corp. v. Vonage Holdings Corp., 503 F.3d 1295, 1306 (Fed. Cir. 2007).

Evidence for Claim Construction 57 1993 from application Ser. No. 898,570 (the ’570 application), which was filed as a continuation of application Ser. No. 684,642 (the ’642 application) [the common ancestor]. The ’855 [patent at issue] issued on March 1, 1994 from application Ser. No. 58,639 (the ’639 application), which was filed as a separate continuation of the ’642 application [the common ancestor] after the ’531 [sibling] patent was allowed. . . . Consequently, we hold that Elkay’s relinquishment of a potential construction of the feed tube limitation in claim 1 of the ’531 [sibling] patent . . . applies to the feed tube limitation in claim 1 of the ’855 [patent at issue].83

Still further, in Microsoft v. Multi-Tech the Federal Circuit applied a disclaimer to the definition of a term made during the prosecution history of a patent that was separate from the patent at issue,84 but that descended from a common ancestor patent application and addressed a claim term in common with the asserted patent: [A]lthough Multi-Tech made the above-quoted statement during prosecution of the ’627 [separate sibling patent not in litigation], it is also applicable to both the ’649 and the ’532 patents [separate, but sibling, patents in litigation, where all three patents descended from a common ancestor application]. In the past, we have held that the prosecution history of one patent is relevant to an understanding of the scope of a common term in a second patent stemming from the same parent application. E.g., Jonsson v. Stanley Works, 903 F.2d 812, 818 (Fed. Cir. 1990); see also Laitram Corp. v. Morehouse Indus., Inc., 143 F.3d 1456, 1460 n.2 (Fed. Cir. 1998) (applying the prosecution histories of two sibling patents, which shared a common written description, to one another). We likewise believe that Multi-Tech’s statement made during prosecution of the ’627 [separate sibling patent not at issue] is relevant to an understanding of the common disclosure in the sibling ’649 and ’532 [separate, but sibling, patents at issue]. Multi-Tech’s statement was expressly directed to the “communications system” disclosed “in the[] specification.” That communications system encompasses the inventions of all three patents, . . . and as noted above, the specification is identical for all three patents. Multi-Tech’s statement to the PTO was thus not limited to the invention disclosed in the ’627 [separate sibling patent not at issue], but was a representation of its own understanding of the inventions disclosed in all three patents. We therefore conclude that that statement from the ’627 patent’s [separate sibling patent not at issue] prosecution history is pertinent to an interpretation of the later issued ’532 [separate, but sibling, patent at issue, as well as to the ’649 separate, but sibling, patent at issue].

83. Elkay Mfg. Co. v. Ebco Mfg. Co., 192 F.3d 973, 975, 980 (Fed. Cir. 1999). 84. The patent that issued off the application was not even asserted in the litigation. Microsoft Corp. v. Multi-Tech Sys., Inc., 357 F.3d 1340, 1349–50 (Fed. Cir. 2004).

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Chapter 2 Patent Law Principle I See Elkay Mfg. Co. v. Ebco Mfg. Co., 192 F.3d 973, 980 (Fed. Cir. 1999) (applying the prosecution history of one patent to a related, subsequently issued patent).85

(d) Related U.S. Child and Grandchild Applications The intrinsic evidence for claim construction can include the prosecution history of related child and grandchild patents, even when the prosecution history occurs after issuance of the patent at issue. Several Federal Circuit cases hold that actions by the patentee in the U.S. Patent Office after issuance of the patent at issue in the prosecution of related patents (e.g., child, grandchild, or sibling patents) having a common specification and at least one claim term in common with the patent at issue are relevant intrinsic evidence for construing the claims of the earlier patent at issue. Furthermore, even though the ’649 [separate, but sibling, patent at issue] had already issued, we think that it is not unsound to apply the same interpretation to that patent. We take the patentee at its word and will not construe the scope of the ’649 patent’s claims more broadly than the patentee itself clearly envisioned.86

Also, for example, in Verizon v. Vonage, for example, the Federal Circuit held: Verizion nonetheless argues that the disclaimer in the ’291 application process (leading to the ’479 patent) should not apply to the ’880 patent because it occurred after the ’880 patent issued. We reject this argument. As we held in Microsoft, where we faced the same situation (disclaimer occurred after patentin-suit had issued), “we think that it is not unsound to apply the same interpretation to th[e] patent[-in-suit],” “even though [that] patent had already issued.”87

In Datamize v. Plumbtree, the Federal Circuit again clearly held that the prosecution history of a continuation application filed from the application that issued as the patent at issue was intrinsic evidence for claim construction of that patent even though the prosecution occurred after issuance of the patent at issue: The “aesthetically pleasing” claim language was not discussed by the inventor or the patent examiner during prosecution of the application that led to the [patent at issue]. The language was discussed, however, during prosecution of a

85. Id. (emphasis added); Verizon, 503 F.3d at 1306 (applying a disclaimer made to the scope of a claim term in prosecution of a separate sibling patent not at issue, to the same claim term in a separate, but sibling patent at issue). 86. Id. at 1350 (emphasis added). 87. Verizon, 503 F.3d at 1307 (emphasis added) (quoting Microsoft, 357 F.3d at 1350).

Evidence for Claim Construction 59 continuation application to the [patent at issue, which application was filed just prior to issuance of the patent at issue and all prosecution history occurred after issuance of the patent at issue] which eventually issued [about two years later] as United States Patent No. 6,460,040 (“the ’040 patent”). . . . We must also analyze the prosecution history to determine whether it provides any reasonable construction of “aesthetically pleasing.” Vitronics Corp. v. Conceptronic, Inc., 90 F.3d 1576, 1582, 1582. Since the [newer]’040 patent is a continuation of the [patent at issue], the ’040 patent’s prosecution history is relevant material that we should consider. See Microsoft Corp. v. Multi-Tech Sys., Inc., 357 F.3d 1340, 1349–50 (Fed. Cir. 2004) (recognizing that “the prosecution history of one patent is relevant to an understanding of the scope of a common term in a second patent stemming from the same parent application”).88

(e) Examiner’s Reliance on Statements and Amendments Made in Related Patent Applications Some initially objected when the Federal Circuit began using as intrinsic evidence the prosecution histories of related applications having common terms, but that were prosecuted after issuance of the patent at issue, stating this was not proper because “the Examiner [of the patent at issue] could not have relied on those statements in allowing the claims of the [patent at issue].”89 The Federal Circuit dismissed this argument, stating: We have stated on numerous occasions that a patentee’s statements during prosecution, whether relied on by the examiner or not, are relevant to claim interpretation. Laitram Corp., 143 F.3d at 1462 (“The fact that an examiner placed no reliance on an applicant’s statement distinguishing prior art does not mean that the statement is inconsequential for purposes of claim construction.”); E.I. Du Pont de Nemours & Co. v. Phillips Petroleum Co., 849 F.2d 1430, 1438 (Fed. Cir. 1988) (“Regardless of the examiner’s motives, arguments made during prosecution shed light on what the applicant meant by its various terms.”). Georgia-Pacific is not to the contrary. In that case, we rejected the argument that the patentee was “bound by” statements made by the applicant in connection with a later application after the patent in suit had already issued. GeorgiaPacific Corp., 195 F.3d at 1333. The accused infringer argued that the patentee was foreclosed by the later statement from arguing in favor of a broader construction of the earlier patent, even though intrinsic evidence supported that broader construction. We rejected the argument that the patentee was bound, or estopped, by a statement made in connection with a later application on which the examiner of the first application could not have relied. We did not suggest, however, that such a statement of the patentee as to the scope of the

88. Datamize L.L.C. v. Plumbtree Software, Inc., 417 F.3d 1342, 1345, 1353 (Fed. Cir. 2005) (some emphasis added, some omitted). 89. Microsoft, 357 F.3d at 1350.

60 Chapter 2 Patent Law Principle I disclosed invention would be irrelevant. Any statement of the patentee in the prosecution of a related application as to the scope of the invention would be relevant to claim construction, and the relevance of the statement made in this instance is enhanced by the fact that it was made in an official proceeding in which the patentee had every incentive to exercise care in characterizing the scope of its invention. Accordingly, we conclude that Multi-Tech’s statements made during the prosecution of the ’627 patent with regard to the scope of its inventions as disclosed in the common specification are relevant not only to the ’627 and ’532 patents, but also to the earlier issued ’649 patent.90

( f) Prior Art Cited in the Patent at Issue or in Its Prosecution History Prior art that is cited in the patent at issue or in its prosecution history (including related prosecution histories as discussed above) is intrinsic evidence for claim construction. A leading case on this issue is Kumar v. Ovonic Battery, which states: Our cases also establish that prior art cited in a patent or cited in the prosecution history of the patent constitutes intrinsic evidence. Tate Access Floors, Inc. v. Interface Architectural Res., Inc., 297 F.3d 1357, 1371–72 n.4 (Fed. Cir. 2002); Vitronics Corp. v. Conceptronic, Inc., 90 F.3d 1576, 1582 (Fed. Cir. 1996); Markman, 52 F.3d at 979–80.91

(g) A “Distinct Line” Between Intrinsic Evidence and Extrinsic Evidence Concerning Prosecution Histories From the above discussion, it is clear that the Federal Circuit has broadly defined the scope of prosecution history evidence that must be considered as intrinsic evidence in construing claims. However, the Federal Circuit has also clearly drawn a “distinct line” between intrinsic evidence and extrinsic evidence regarding prosecution histories of U.S. patent applications for purposes of claim construction.92 The Federal Circuit has firmly held that the prosecution histories of U.S. patents or patent applications that are not formally related to the patent at issue, or do not share a claim term in common with the patent at issue, are not intrinsic evidence.93

90. Id. (emphasis added). 91. Kumar v. Ovonic Battery Co., Inc., 315 F.3d 1364, 1368 (Fed. Cir. 2003); see also, e.g., V-Formation, Inc. v. Benetton Group SpA, 401 F.3d 1307, 1311 (Fed. Cir. 2005) (“This court has established that “prior art cited in a patent or cited in the prosecution history of the patent constitutes intrinsic evidence.”) (quoting Kumar at 1368. 92. Goldenberg v. Cytogen, Inc., 373 F.3d 1158, 1167–68 (Fed. Cir. 2004) (emphasis added). 93. E.g., id. (applications must be formally related to the patent at issue in order to be intrinsic evidence for claim construction of the patent at issue); Microsoft, 357 F.3d at 1349; Advanced Cardiovascular Sys. v. Medtronic, Inc., 265 F.3d 1294, 1305–06 (Fed. Cir. 2001) (requiring a


(h) Unrelated U.S. Patents/Non-U.S. Patents Are Not Intrinsic Evidence The prosecution histories of U.S. patents and/or patent applications that are not formally related as continuation, continuation-in-part, or divisional applications to the patent being construed—or that are formally related but do not address a claim limitation in common with the patent being construed— are not intrinsic evidence for claim construction.94 Further, the prosecution histories of all international, non-U.S., patents and patent applications, however related to the patent at issue (including as counterpart and even as priority non-U.S. patent applications and including both the applications and their prosecution histories)95 are never intrinsic evidence for claim construction of a U.S. patent.96 4. The Relative Weight of Intrinsic Evidence While all intrinsic evidence must be considered in construing a patent’s claims, not all intrinsic evidence is afforded equal weight. a) The Claims As discussed in Section II above, a fundamental principle of U.S. patent law is that a patent’s claims, and only its claims, define the patent grant. It necessarily follows that the words of the claims are what is construed in claim construction. Thus, the claims themselves (including the individual claim terms, the way the individual terms are used in the context of individual claims, and the way individual claims relate to one another) are the highest level of intrinsic evidence in claim construction. As indicated by the Federal Circuit: “First, we look to the words of the claims themselves, both asserted and nonasserted, to define the scope of the patented invention.”97 Therefore: Attending this principle, a claim construction analysis must begin and remain centered on the claim language itself, for that is the language the patentee has

94.

95.

96. 97.

formally related application to also have at least one claim term in common with the patent at issue in order to be intrinsic evidence for claim construction of the patent at issue). E.g., Goldenberg, 373 F.3d at 1167–68 (formal relationship required); Microsoft, 357 F.3d at 1349; Advanced Cardiovascular, 265 F.3d at 1305 (the prosecution history of a related patent must address “a limitation in common with the patent in suit”). A related non-U.S. patent or patent application may, however, be intrinsic evidence if brought in under another rule. For example, a non-U.S. published patent or published patent application may be intrinsic evidence if it was cited as prior art in the prosecution history of a U.S. patent. E.g., Pfizer Inc. v. Ranbaxy Labs. Ltd., 457 F.3d 1284, 1290 (Fed. Cir. 2006); TI Group Auto. Sys. (N. Am.) Inc. v. VDO N. Am. LLC, 375 F.3d 1126, 1136 (Fed. Cir. 2004). Vitronics Corp. v. Conceptronic, Inc., 90 F.3d 1576, 1582, 1582 (Fed. Cir. 1996).

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Chapter 2 Patent Law Principle I chosen to “particularly point[] out and distinctly claim[] the subject matter which the patentee regards as his invention.”98

This includes using “the claim themselves [to] provide substantial guidance as to the meaning of particular claim terms.”99 As explained by the Phillips court: To begin with, the context in which a term is used in the asserted claim can be highly instructive. To take a simple example, the claim in this case refers to “steel baffles,” which strongly implies that the term “baffles” does not inherently mean objects made of steel. This court’s cases provide numerous similar examples in which the use of a term within the claim provides a firm basis for construing the term. See, e.g., Mars, Inc., v. H.J. Heinz Co., 377 F.3d 1369, 1374 (Fed. Cir. 2004) (claim term “ingredients” construed in light of the use of the term “mixture” in the same claim phrase); Process Control Corp. v. HydReclaim Corp., 190 F.3d 1350, 1356 (Fed. Cir. 1999) (claim term “discharge rate” construed in light of the use of the same term in another limitation of the same claim). Other claims of the patent in question, both asserted and unasserted, can also be valuable sources of enlightenment as to the meaning of a claim term. Vitronics, 90 F.3d at 1582. Because claim terms are normally used consistently throughout the patent, the usage of a term in one claim can often illuminate the meaning of the same term in other claims. See Rexnord Corp. v. Laitram Corp., 274 F.3d 1336, 1342 (Fed. Cir. 2001); CVI/Beta Ventures, Inc. v. Tura LP, 112 F.3d 1146, 1159 (Fed. Cir. 1997). Differences among claims can also be a useful guide in understanding the meaning of particular claim terms. See Laitram Corp. v. Rexnord, Inc., 939 F.2d 1533, 1538 (Fed. Cir. 1991). For example, the presence of a dependent claim that adds a particular limitation gives rise to a presumption that the limitation in question is not present in the independent claim. See Lieble Flarsheim Co. v. Medrad, Inc., 358 F.3d 898, 910 (Fed. Cir. 2004).100

b) The Specification The specification is second only to the claims themselves as evidence for claim construction. The Phillips court explained: The claims, of course, do not stand alone. Rather, they are part of “a fully integrated written instrument,” Markman, 52 F.3d at 978, consisting principally of a specification that concludes with the claims. For that reason, claims “must be

98. Innova/Pure Water, Inc. v. Safari Water Filtration Sys., 381 F.3d 1111, 1116 (Fed. Cir. 2004). (emphasis added) (quoting Interactive Gift Express, Inc. v. Compuserve, Inc., 256 F.3d 1323, 1331 (Fed. Cir. 2001) (quoting 35 U.S.C. § 112, P 2)). 99. Phillips v. AWH Corp., 415 F.3d 1303, 1314 (Fed. Cir. 2005) (en banc). 100. Id. at 1314–15 (emphasis added).

Evidence for Claim Construction 63 read in view of the specification, of which they are a part.” Id. at 979. As we stated in Vitronics, the specification “is always highly relevant to the claim construction analysis. Usually, it is dispositive; it is the single best guide to the meaning of a disputed term.”101

The Federal Circuit indicated in Phillips that “[t]he importance of the specification in claim construction derives from its statutory role. The close kinship between the written description and the claims is enforced by the statutory requirement that the specification describe the claimed invention in ‘full, clear, concise, and exact terms.’”102 “In light of the statutory directive that the inventor provide a ‘full’ and ‘exact’ description of the claimed invention, the specification necessarily informs the proper construction of the claims.”103 The importance of the specification is demonstrated by the fact the specification can alter (or even totally redefine) the ordinary and customary meaning in the relevant art of a claim term. For example, the patentee can choose to be “his own lexicographer”104 and define a claim term in the specification that is contrary to its ordinary and customary meaning in the art. In addition, the specification may contain clear evidence of disclaimer or disavowal of scope that a claim term would otherwise have in its ordinary and customary meaning in the relevant art.105 The Phillips court summarized this law as follows: Consistent with that general principle, our cases recognize that the specification may reveal a special definition given to a claim term by the patentee that differs from the meaning it would otherwise possess. In such cases, the inventor’s lexicography governs. See CCS Fitness, Inc. v. Brunswick Corp., 288 F.3d 1359, 1366 (Fed. Cir. 2002). In other cases, the specification may reveal an intentional disclaimer, or disavowal, of claim scope by the inventor. In that instance as well, the inventor has dictated the correct claim scope, and the inventor’s intention, as expressed in

101. 102. 103. 104.

Id. at 1315 (emphasis added). Id. at 1316 (quoting 35 U.S.C. § 112, P 2). Id. CCS Fitness, Inc. v. Brunswick Corp., 288 F.3d 1359, 1366 (Fed. Cir. 2002); Rexnord Corp. v. Laitram Corp., 274 F.3d 1336, 1342 (Fed. Cir. 2001); Johnson Worldwide Assocs., Inc. v. Zebco Corp., 175 F.3d 985, 990 (Fed. Cir. 1999); Sinorgchem Co. v. ITC, 511 F.3d 1132, 1138 (Fed. Cir. 2007) (“We have frequently found that a definition set forth in the specification governs the meaning of the claims.”). 105. E.g., Verizon Servs. Corp. v. Vonage Holdings Corp., 503 F.3d 1295, 1306–07 (Fed. Cir. 2007); SciMed Life Sys., Inc. v. Advanced Cardiovascular Sys., Inc., 242 F.3d 1337, 1343–44 (Fed. Cir. 2001).

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Chapter 2 Patent Law Principle I the specification, is regarded as dispositive. See SciMed Life Sys., Inc. v. Advanced Cardiovascular Sys., Inc., 242 F.3d 1337, 1343–44 (Fed. Cir. 2001).106

The importance of the specification as evidence for claim construction has a long and consistent history dating back to appellate decisions before the formation of the Federal Circuit in 1982, as well as in U.S. Supreme Court cases dating back to the 1800s. For example, both predecessor appellate courts to the Federal Circuit (the U.S. Court of Claims and the U.S. Court of Customs and Patent Appeals) had addressed this issue. The U.S. Court of Claims characterized the specification as “a concordance for the claims,” based on the statutory requirement that the specification “describe the manner and process of making and using” the patented invention.107 Moreover, the Court of Customs and Patent Appeals stated: “Claims must always be read in light of the specification. Here, the specification makes clear what the appellants did and did not invent. . . .”108 Early Federal Circuit decisions also emphasized the importance of the specification as evidence in claim construction. For example, in 1985, not long after the creation of the Federal Circuit, the court indicated: “The descriptive part of the specification aids in ascertaining the scope and meaning of the claims inasmuch as the words of the claims must be based on the description. The specification is, thus, the primary basis for construing the claims.”109 In other pre-Phillips decisions, the Federal Circuit stated: “In most cases, the best source for discerning the proper context of claim terms is the patent specification wherein the patent applicant describes the invention”;110 “[t]he words of patent claims have the meaning and scope with which they are used in the specification . . .”;111 and “a fundamental rule of claim construction is that terms in a patent document are construed with the meaning with which they are presented in the patent document. Thus claims must be construed so as to be consistent with the specification, of which they are a part.”112 The primacy of this law is also reflected in—and supported by—a series of U.S. Supreme Court cases dating from 1878, wherein the Court has consistently held that a patent’s specification plays a crucial role in the evidence of claim construction. For example, in 1878 the Court held that “in case of doubt or ambiguity it is proper in all cases to refer back to the descriptive portions of the specification to aid in solving the doubt or in ascertaining the true

106. Phillips, 415 F.3d at 1316; Cook Biotech Inc. v. Acell, Inc., 460 F.3d 1365, 1373 (Fed. Cir. 2006) (quoting Phillips, 415 F.3d at 1316). 107. Autogiro Co. of Am. v. United States, 384 F.2d 391, 397–98 (Ct. Cl. 1967). 108. In re Fout, 675 F.2d 297, 400 (C.C.P.A. 1982). 109. Standard Oil Co. v. Am Cyanamid Co., 774 F.2d 448, 452 (Fed. Cir. 1985). 110. Metabolite Labs v. Lab. Corp. of Am. Holdings, 370 F.3d 1354, 1360 (Fed. Cir. 2004). 111. Kinik Co. v. ITC, 362 F.3d 1359, 1365 (Fed. Cir. 2004). 112. Merck & Co. v. Teva Pharms. USA, Inc., 347 F.3d 1367, 1371 (Fed. Cir. 2003) (citations omitted).


intent and meaning of the language employed in the claims.”113 In 1886, the Court held that the specification is appropriately resorted to “for the purpose of better understanding the meaning of the claim.”114 In the 1940s, the Court reiterated that “[t]he claims of a patent are always to be read or interpreted in light of its specification[].”115 Finally, in 1966 the Court held that “[i]t is fundamental that claims are to be construed in light of the specification[] and both are to be read with a view to ascertaining the invention.”116 In 2005, the Federal Circuit explained in its en banc Phillips decision that “[t]he importance of the specification in claim construction derives from its statutory role. The close kinship between the written description and the claims is enforced by the statutory requirement that the specification describe the claimed invention in ‘full, clear, concise, and exact terms.’”117 “In light of the statutory directive that the inventor provide a ‘full’ and ‘exact’ description of the claimed invention, the specification necessarily informs the proper construction of the claims.”118 In summarizing the importance of the specification to claim construction, the Federal Circuit’s Phillips case119 concluded with the following quote from an earlier Federal Circuit case: Ultimately, the interpretation to be given a term can only be determined and confirmed with a full understanding of what the inventors actually invented and intended to envelop with the claim. The construction that stays true to the claim language and most naturally aligns with the patent’s description of the invention will be, in the end, the correct construction.120

c) The Prosecution History A patent’s prosecution history in the U.S. Patent Office follows the claims and the specification in order of importance as evidence for construing claims. As explained by the Phillips court: In addition to consulting the specification, we have held that a court “should also consider the patent’s prosecution history. . . .” Markman, 52 F.3d at 980; see also Graham v. John Deere Co., 838 U.S. 1, 33 (1966) (“An invention is construed

113. 114. 115. 116. 117.

Bates v. Coe, 98 U.S. 31, 38 (1878). White v. Dunbar, 119 U.S. 47, 51 (1886). Schriber-Schroth Co. v. Cleveland Trust Co., 311 U.S. 211 (1941). United States v. Adams, 383 U.S. 39, 49 (1966). Phillips v. AWH Corp., 415 F.3d 1303, 1316 (Fed. Cir. 2005) (en banc) (quoting 35 U.S.C. § 112, P 2). 118. Id. 119. Id. 120. Renishaw PLC v. Marposs Societa’ per Azioni, 158 F.3d 1243, 1250 (Fed. Cir. 1998) (citations omitted).

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Chapter 2 Patent Law Principle I not only in the light of the claims, but also with reference to the file wrapper or prosecution history in the Patent Office.”). The prosecution history, which we have designated as part of the “intrinsic evidence,” consists of the complete record of the proceedings before the PTO and includes the prior art cited during the examination of the patent. Like the specification, the prosecution history provides evidence of how the PTO and the inventor understood the patent. Furthermore, like the specification, the prosecution history was created by the patentee in attempting to explain and obtain the patent.121

However, the Federal Circuit has cautioned repeatedly, including in Phillips, that a patent’s prosecution history may be less useful as evidence for claim construction than a patent’s claims and specification: Yet because the prosecution history represents an ongoing negotiation between the PTO and the applicant, rather than the final product of that negotiation, it often lacks the clarity of the specification and thus is less useful for claim construction purposes. See Inverness Med. Switz. GmgH v. Warner Lambert Co., 309 F.3d 1373, 1380–82 (Fed. Cir. 2002) (the ambiguity of the prosecution history made it less relevant to claim construction); Athletic Alternatives, Inc. v. Prince Mfg., Inc., 73 F.3d 1573, 1580 (Fed. Cir. 1996) (the ambiguity of the prosecution history made it “unhelpful as an interpretive resource” for claim construction).122

Nevertheless, the Phillips court concluded: Nonetheless, the prosecution history can often inform the meaning of the claim language by demonstrating how the inventor understood the invention and whether the inventor limited the invention in the course of prosecution, making the claim scope narrower than it would otherwise be. Vitronics, 90 F.3d at 1582–83; see also Chimie v. PPG Indus., Inc., 402 F.3d 1371, 1384 (Fed. Cir. 2005) (“The purpose of consulting the prosecution history in construing a claim is to ‘exclude any interpretation that was disclaimed during prosecution.’”), quoting ZMI Corp. v. Cardiac Resuscitator Corp., 844 F.2d 1576, 1580 (Fed. Cir. 1988); Southwall Techs., Inc. v. Cardinal IG Co., 54 F.3d 1570, 1576 (Fed. Cir. 1995).123

121. Phillips, 415 F.3d at 1317. 122. Id. 123. Id.


5. Extrinsic Evidence Extrinsic evidence “consists of all evidence external to the patent and prosecution history, including expert and inventor testimony, dictionaries, and learned treatises.”124 As explained above and in Section III[C][6] below, a court may consider extrinsic evidence at any time to inform claim construction based upon the intrinsic evidence.125 For example, the Phillips court teaches that extrinsic evidence such as dictionary definitions may be consulted to help determine the ordinary and customary meaning of claim terms to one of skill in the relevant art so as to create the Phillips court’s “objective baseline from which to begin claim construction.”126 Further, “‘extrinsic evidence concerning relevant scientific principles, the meaning of technical terms, and the state of the art’” may be consulted during claim construction based primarily upon the intrinsic evidence.127 In fact, the Phillips court stated: “We have especially noted the help that technical dictionaries may provide to a court to ‘better understand the underlying technology’ and the way in which one of skill in the art might use the claim terms.”128 However, the Federal Circuit has and consistently provided cautions over a number of opinions from which the following precepts may be drawn: 1. In most situations, an analysis of the intrinsic evidence alone will resolve any ambiguity in a disputed claim term. In such circumstances, it is improper to rely on extrinsic evidence;129 2. In those cases where the public record unambiguously describes the scope of the patented invention, reliance on any extrinsic evidence is improper;130 3. Extrinsic evidence is to be used for the court’s understanding of the patent, not for the purpose of varying or contradicting the terms of the claims;131

124. Markman v. Westview Instruments, Inc., 52 F.3d 967, 980 (Fed. Cir. 1995) (en banc), aff ’d, 517 U.S. 370 (1996). 125. See, e.g., id. (“The court may, in its discretion, receive extrinsic evidence in order ‘to aid the court in coming to a correct conclusion’ as to the ‘true meaning of the language employed’ in the patent.”) 126. Phillips, 415 F.3d at 1313–14. 127. Id. at 1313 (quoting Innova/Pure Water, Inc. v. Safari Water Filtration Sys., 381 F.3d 1111, 1116 (Fed. Cir. 2004)). 128. Id. at 1318 (quoting Vitronics Corp. v. Conceptronic, Inc., 90 F.3d 1576, 1584 n.6 (Fed. Cir. 1996)). 129. Vitronics, 90 F.3d at 1583. 130. Id. 131. Markman v. Westview Instruments, Inc., 52 F.3d 967, 981 (Fed. Cir. 1995) (en banc), aff ’d, 517 U.S. 370 (1996).

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4. However, extrinsic evidence cannot be used to alter a claim construction dictated by a proper analysis of the intrinsic evidence;132 5. When an analysis of intrinsic evidence resolves any ambiguity in a disputed claim term, it is improper to rely on extrinsic evidence to contradict the meaning so ascertained;133 and 6. The court may receive extrinsic evidence to educate itself about the invention and the relevant technology, but the court may not use extrinsic evidence to arrive at a claim construction that is clearly at odds with the construction mandated by the intrinsic evidence.134 The Federal Circuit has also held that “extrinsic evidence in general [is] less reliable than the [intrinsic evidence of the] patent and its prosecution history,”135 adding, “undue reliance on extrinsic evidence poses the risk that it will be used to change the meaning of claims in derogation of the ‘indisputable public records consisting of [the intrinsic evidence of] the claims, the specification and the prosecution history,’ thereby undermining the public notice function of patents.”136 On the other hand, extrinsic evidence may be consulted and relied upon in claim construction when the meaning of the claim is ambiguous based solely on the intrinsic evidence. As stated by the Federal Circuit: [A] trial court is quite correct in hearing and relying on expert testimony on an ultimate claim construction question in cases in which the intrinsic evidence (i.e., the patent and its file history—the “patent record”) does not answer the question. See Vitronics, 90 F.3d at 1584 (“No doubt there will be instances in which intrinsic evidence is insufficient to enable the court to determine the meaning of the asserted claims, and in those instances, extrinsic evidence . . . may . . . properly be relied upon to understand and construe the claims.”).137

132. On-Line Techs., Inc. v. Boden-Seewerk Perkin-Elmer GmbH, 386 F.3d 1133, 1139 (Fed. Cir. 2004). 133. Intel Corp. v. VIA Techs., Inc., 319 F.3d 1357, 1367 (Fed. Cir. 2003). 134. Elkay Mfg. Co. v. Ebco Mfg. Co., 192 F.3d 973, 977 (Fed. Cir. 1999). 135. Phillips v. AWH Corp., 415 F.3d 1303, 1319 (Fed. Cir. 2005) (en banc). 136. Id. (quoting Southwall, 54 F.3d at 1578); Elkay, 192 F.3d at 977; Markman v. Westview Instruments, Inc., 52 F.3d 967, 981 (Fed. Cir. 1995) (en banc), aff ’d, 517 U.S. 370 (1996) (extrinsic evidence may not be used “for the purpose of varying or contradicting the terms in the claims”); Vitronics Corp. v. Conceptronic, Inc., 90 F.3d 1576, 1584 (Fed. Cir. 1996); Key Pharms. v. Hercon Labs. Corp., 161 F.3d 709, 716 (Fed. Cir. 1998) (“What is disapproved of is an attempt to use extrinsic evidence to arrive at a claim construction that is clearly at odds with the claim construction mandated by the claims themselves, the written description, and the prosecution history, in other words, the written record of the patent.”) 137. Key Pharms., 161 F.3d at 716.

Current Law of the Process of Claim Construction 69

IV. Current Law of the Process of Claim Construction This section discusses the current law of the process of claim construction, which is the process of determining the proper and legally correct meaning of a U.S. patent’s claims. This process is based on the application of the law of evidence for claim construction that is discussed in Section III[C] above.

A. Overview The process of claim construction involves the careful application of the rules of evidence for claim construction (as discussed in detail in Section III[C] above). These rules categorize the evidence by specific types and weights of importance, thereby establishing a well-defined hierarchy of evidence to be applied in construing the legal meaning of a U.S. patent’s claims. The rules of evidence for and its related procedures are based on a long— and old—line of U.S. Supreme Court cases; they have most recently been summarized and clarified by the Federal Circuit in its four leading cases on claim construction, including two en banc decisions (Phillips138 and Markman139) along with Vitronics140 and Innova.141

B. A Brief Summary of the Evidence of Claim Construction As explained in detail above in Section III[C], the law of evidence of claim construction defines very specific types—and specific weights—of evidence to be used in construing a patent’s claims. 1. Intrinsic Versus Extrinsic Evidence All evidence for claim construction is divided into one of two main types: intrinsic or extrinsic. Intrinsic evidence is defined by the Federal Circuit as “the patent claim, specification and file history.”142 Extrinsic evidence

138. 139. 140. 141. 142.

Phillips, 415 F.3d at 1303. Markman, 52 F.3d at 967. Vitronics, 90 F.3d at 1576. Innova/Pure Water, Inc. v. Safari Water Filtration Sys., 381 F.3d 1111 (Fed. Cir. 2004). Vitronics Corp. v. Conceptronic, Inc., 90 F.3d 1576, 1582, 1582 (Fed. Cir. 1996) (the term “a patent’s file history” means the same thing as a patent’s prosecution history, and refers to the prosecution history in the U.S. Patent Office of the patent application(s) that issued as the subject patent).

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“consists of all evidence external to the patent and prosecution history, including expert and inventor testimony, dictionaries, and learned treatises.”143 All intrinsic evidence is always to be considered for claim construction.144 In addition, a court may consider extrinsic evidence at any time, but generally only to inform claim construction based upon the intrinsic evidence.145 For example, “‘extrinsic evidence concerning relevant scientific principles, the meaning of technical terms, and the state of the art’” may be consulted during claim construction based primarily upon the intrinsic evidence.146 The Federal Circuit stated in its en banc decision in Phillips on claim construction: “We have especially noted the help that technical dictionaries may provide to a court to ‘better understand the underlying technology’ and the way in which one of skill in the art might use the claim terms.”147 However, the Federal Circuit has strongly and consistently cautioned that: In most situations, an analysis of the intrinsic evidence alone will resolve any ambiguity in a disputed claim term. In such circumstances, it is improper to rely on extrinsic evidence. In those cases where the public record unambiguously describes the scope of the patented invention, reliance on any extrinsic evidence is improper.148

2. Relative Weight of Intrinsic Evidence Courts have assigned differing weights to specific types of evidence under the broad definition of a patent’s intrinsic evidence.

143. Markman v. Westview Instruments, Inc., 52 F.3d 967, 980 (Fed. Cir. 1995) (en banc), aff ’d, 517 U.S. 370 (1996). 144. Id. at 979 (“To ascertain the meaning of claims, we consider three sources: The claims, the specification, and the prosecution history.”). 145. E.g., id. at 980 (“The court may, in its discretion, receive extrinsic evidence in order ‘to aid the court in coming to a correct conclusion’ as to the ‘true meaning of the language employed’ in the patent.”). 146. Id. at 1313 (quoting Innova/Pure Water, Inc. v. Safari Water Filtration Sys., 381 F.3d 1111, 1116 (Fed. Cir. 2004)). 147. Id. at 1318 (quoting Vitronics, 90 F.3d at 1584 n.6). 148. Vitronics, 90 F.3d at 1583 (citations omitted, emphasis added); Markman, 52 F.3d at 981 (“Extrinsic evidence is to be used for the court’s understanding of the patent, not for the purpose of varying or contradicting the terms of the claims.”); Innova, 381 F.3d at 1116 (“Attending this principle, a claim construction analysis must begin and remain centered on the claim language itself, for that is the language the patentee has chosen to ‘particularly point[] out and distinctly claim[] the subject matter which the patentee regards as his invention.’”) (quoting Interactive Gift Express, Inc. v. Compuserve, Inc., 256 F.3d 1323, 1331 (Fed. Cir. 2001) (quoting 35 U.S.C. § 112, P 2)).


a) The Claims “First, we look to the words of the claims themselves, both asserted and nonasserted, to define the scope of the patented invention.”149 b) The Specification Second only to the claims themselves is the specification as evidence for claim construction. The Phillips court explained: The claims, of course, do not stand alone. Rather, they are part of “a fully integrated written instrument,” Markman, 52 F.3d at 978, consisting principally of a specification that concludes with the claims. For that reason, claims “must be read in view of the specification, of which they are a part.” Id., at 979. As we stated in Vitronics, the specification “is always highly relevant to the claim construction analysis. Usually, it is dispositive; it is the single best guide to the meaning of a disputed term.”150

The specification “acts as a dictionary” for the definition of claim terms.151 It may show that the terms have their objectively defined ordinary and customary meaning in the relevant art, or it may alter (or even totally redefine) the meaning of a claim term.152 For example, the patentee can choose to be “his own lexicographer”153 and define a claim term in the specification that is contrary to its ordinary meaning in the art; alternatively, the specification may contain clear evidence of disclaimer or disavowal of scope that a claim term would otherwise have in its objectively defined ordinary and customary meaning in the relevant art.154 c) The Prosecution History Following the claims and specification in order of importance as evidence for construing claims is a patent’s prosecution history in the U.S. Patent Office. As explained in Phillips: In addition to consulting the specification, we have held that a court “should also consider the patent’s prosecution history. . . .” Markman, 52 F.3d at 980; see also Graham v. John Deere Co., 838 U.S. 1, 33 (1966) (“An invention is

149. 150. 151. 152. 153. 154.

Vitronics, 90 F.3d at 1582. Phillips v. AWH Corp., 415 F.3d 1303, 1315 (Fed. Cir. 2005) (en banc). Id. at 1582. E.g., id. CCS Fitness, Inc. v. Brunswick Corp., 288 F.3d 1359, 1366 (Fed. Cir. 2002). E.g., Verizon Servs. Corp. v. Vonage Holdings Corp., 503 F.3d 1295, 1306–07 (Fed. Cir. 2007).

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Chapter 2 Patent Law Principle I construed not only in the light of the claims, but also with reference to the file wrapper or prosecution history in the Patent Office.”)155

The Federal Circuit has cautioned repeatedly, including in Phillips, that a patent’s prosecution history may be less useful as evidence for claim construction than a patent’s claims and specification: Yet because the prosecution history represents an ongoing negotiation between the PTO and the applicant, rather than the final product of that negotiation, it often lacks the clarity of the specification and thus is less useful for claim construction purposes. See Inverness Med. Switz. GmgH v. Warner Lambert Co., 309 F.3d 1373, 1380–82 (Fed. Cir. 2002) (the ambiguity of the prosecution history made it less relevant to claim construction); Athletic Alternatives, Inc. v. Prince Mfg., Inc., 73 F.3d 1573, 1580 (Fed. Cir. 1996) (the ambiguity of the prosecution history made it “unhelpful as an interpretive resource” for claim construction).156

However, the Phillips court concluded: Nonetheless, the prosecution history can often inform the meaning of the claim language by demonstrating how the inventor understood the invention and whether the inventor limited the invention in the course of prosecution, making the claim scope narrower than it would otherwise be.157

C. The Step-By-Step Process of Claim Construction The following sets forth the process of claim construction on a step-by-step basis. 1. Focus on and Define the Claim Terms Claim construction is the interpretation of the legal meaning of a patent’s claims. The process of claim construction focuses on and provides the meaning of the words the claims, thereby determining the meaning of the claims themselves. As articulated in Phillips: “It is a ‘bedrock principle’ of patent law that ‘the claims of a patent define the invention to which the patentee is entitled



the right to exclude.’”158 Accordingly, the court “begin(s) our analysis with the words of the claim.”159 2. Determine the Ordinary and Customary Meaning of the Claim Terms as an “Objective Baseline from which to Begin Claim Construction” “The inquiry into how a person of ordinary skill in the art understands a claim term provides an objective baseline from which to begin claim interpretation.”160 The words of the claims are “generally given their ordinary and customary meaning,”161 which “is the meaning that the term would have to a person of ordinary skill in the art in question at the time of the invention.”162 In interpreting claims, the court “inquire(s) into how a person of ordinary skill in the art would have understood [the] claim terms at the time of the invention.”163 a) Extrinsic Evidence May Be Consulted to Determine the Ordinary and Customary Meaning of Claim Terms in the Relevant Art A court may consider extrinsic evidence to determine the objective, ordinary meaning of claim terms to one of ordinary skill in the relevant art at the time the application for the patent was filed.164 For example, the Phillips court indicated: In some cases, the ordinary meaning of claim language as understood by a person of skill in the art may be readily apparent even to lay judges, and claim

158. Id. at 1313 (quoting Innova/Pure Water, Inc. v. Safari Water Filtration Sys., 381 F.3d 1111, 1115 (Fed. Cir. 2004); Nystrom v. Trex Co., Inc., 424 F.3d 1136, 1142 (Fed. Cir. 2005); Callicrate v. Wadsworth Mfg., Inc., 427 F.3d 1361, 1366 (Fed. Cir. 2005). 159. Nystrom, 424 F.3d at 1142. 160. Phillips, 415 F.3d at 1313 (emphasis added); Cook Biotech Inc. v. Acell, Inc., 460 F.3d 1365, 1373 (Fed. Cir. 2006); Callicrate, 427 F.3d at 1366–67; Pfizer, Inc. v. Teva. Pharm. USC, Inc., 429 F.3d 1364, 1373 (Fed. Cir. 2005). 161. Phillips., 415 F.3d at 1312 (quoting Vitronics Corp. v. Conceptronic, Inc., 90 F.3d 1576, 1582 (Fed. Cir. 1996); Nystrom, 424 F.3d at 1142; Callicrate, 427 F.3d at 1366. 162. Phillips, 415 F.3d at 1313; Cook Biotech, 460 F.3d at 1372–73 (Fed. Cir. 2006); Nystrom, 424 F.3d at 1142. 163. Pfizer, 429 F.3d at 1372–73 (Fed. Cir. 2005) (citing Phillips, 415 F.3d at 1313); Cook Biotech, 460 F.3d at 1372–73 (Fed. Cir. 2006); Nystrom, 424 F.3d at 1142. 164. E.g., Markman v. Westview Instruments, Inc., 52 F.3d 967, 980 (Fed. Cir. 1995) (en banc), aff ’d, 517 U.S. 370 (1996) (“The court may, in its discretion, receive extrinsic evidence in order ‘to aid the court in coming to a correct conclusion’ as to the ‘true meaning of the language employed’ in the patent.”).

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Chapter 2 Patent Law Principle I construction in such cases involves little more than the application of the widely accepted meaning of commonly understood words. See Brown v. 3M, 265 F.3d 1349, 1352 (Fed. Cir. 2001) (holding that the claims did “not require elaborate interpretation”). In such circumstances, general purpose dictionaries may be helpful. In many cases that give rise to litigation, however, determining the ordinary and customary meaning of the claim requires examination of terms that have a particular meaning in a field of art. Because the meaning of a claim term as understood by persons of skill in the art is often not immediately apparent, and because patentees frequently use terms idiosyncratically, the court looks to “those sources available to the public that show what a person of skill in the art would have understood disputed claim language to mean.” Innova, 381 F.3d at 1116. Those sources include “the words of the claims themselves, the remainder of the specification, the prosecution history, and extrinsic evidence concerning relevant scientific principles, the meaning of technical terms, and the state of the art.” Id.; see also Gemstar-TV Guide Int’l v. ITC, 383 F.3d 1352, 1364 (Fed. Cir. 2004); Vitronics, 90 F.3d at 1582–83; Markman, 52 F.3d at 979.165

Therefore, “‘extrinsic evidence concerning relevant scientific principles, the meaning of technical terms, and the state of the art’” may be consulted during claim construction.166 As the Phillips court concluded: “We have especially noted the help that technical dictionaries may provide to a court to ‘better understand the underlying technology’ and the way in which one of skill in the art might use the claim terms.”167 b) The Intrinsic Evidence Must Be Considered to Determine the Ordinary and Customary Meaning of Claim Terms in the Relevant Art While extrinsic evidence may be consulted as to the ordinary meaning claim terms in general in the art relevant to the patent, proper claim construction must determine the meaning that one of ordinary skill in the relevant art would give to the claim terms in view of all of the intrinsic evidence (i.e., the claims, the specification, and the prosecution history).168 “We cannot look at the ordinary meaning of the term . . . in a vacuum. Rather, we must look at the ordinary meaning in the context of the written description and the prosecution history.”169 The intrinsic record “usually

165. Phillips, 415 F.3d at 1314. 166. Id. at 1313 (quoting Innova/Pure Water, Inc. v. Safari Water Filtration Sys., 381 F.3d 1111, 1116 (Fed. Cir. 2004)). 167. Id. at 1318 (quoting Vitronics Corp. v. Conceptronic, Inc., 90 F.3d 1576, 1584 n.6 (Fed. Cir. 1996); Nystrom, 424 F.3d at 1142–43 (“In discerning the meaning of claim terms, resort to dictionaries and treatises also may be helpful.”). 168. E.g., Phillips, 415 F.3d at 1313. 169. Medrad, Inc. v. MRI Devices Corp., 401 F.3d 1313, 1319 (Fed. Cir. 2005); Phillips, 415 F.3d at 1314.


provides the technological and temporal context to enable the court to ascertain the meaning of the claim to one of ordinary skill in the art at the time of the invention.”170 The proper definition is the “definition that one of ordinary skill in the art could ascertain from the intrinsic evidence in the record.”171 As the Phillips court noted: “This court explained [this] point well” in Multiform Desiccants v. Medzam, which stated: It is the person of ordinary skill in the field of the invention through whose eyes the claims are construed. Such person is deemed to read the words used in the patent documents with an understanding of their meaning in the field, and to have knowledge of any special meaning and usage in the field. The inventor’s words that are used to describe the invention—the inventor’s lexicography— must be understood and interpreted by the court as they would be understood and interpreted by a person in that field of technology. Thus the court starts the decision making process by reviewing the same resources as would that person, viz., the patent specification and the prosecution history.172

(1) The Claims As indicated by the Federal Circuit: “First, we look to the words of the claims themselves, both asserted and nonasserted, to define the scope of the patented invention.”173 Therefore: Attending this principle, a claim construction analysis must begin and remain centered on the claim language itself, for that is the language the patentee has chosen to “particularly point[] out and distinctly claim[] the subject matter which the patentee regards as his invention.”174

This includes using “the claims themselves [to] provide substantial guidance as to the meaning of particular claim terms.”175 As explained by the Phillips court: To begin with, the context in which a term is used in the asserted claim can be highly instructive. . . . This court’s cases provide numerous similar examples in which the use of a term within the claim provides a firm basis for construing the term.

170. V-Formation, Inc. v. Benetton Group SpA, 401 F.3d 1307, 1310 (Fed. Cir. 2005). 171. Unitherm Food Sys., Inc. v. Swift-Eckrich, Inc., 375 F.3d 1341, 1351 (Fed. Cir. 2004). 172. Phillips, 415 F.3d at 1313 (quoting Multiform Desiccants, Inc. v. Medzam, Ltd., 133 F.3d 1473, 1477 (Fed. Cir. 1998)). 173. Vitronics Corp. v. Conceptronic, Inc., 90 F.3d 1576, 1582 (Fed. Cir. 1996). 174. Innova/Pure Water, Inc. v. Safari Water Filtration Sys., 381 F.3d 1111, 1116 (Fed. Cir. 2004) (emphasis added) (quoting Interactive Gift Express, Inc. v. Compuserve, Inc., 256 F.3d 1323, 1331 (Fed. Cir. 2001) (quoting 35 U.S.C. § 112, P 2)). 175. Phillips, 415 F.3d at 1314.

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Chapter 2 Patent Law Principle I Other claims of the patent in question, both asserted and unasserted, can also be valuable sources of enlightenment as to the meaning of a claim term. Because claim terms are normally used consistently throughout the patent, the usage of a term in one claim can often illuminate the meaning of the same term in other claims. Differences among claims can also be a useful guide in understanding the meaning of particular claim terms. For example, the presence of a dependent claim that adds a particular limitation gives rise to a presumption that the limitation in question is not present in the independent claim.176

(2) The Specification “Importantly, the person of ordinary skill in the art is deemed to read the claim term not only in the context of the particular claim in which the disputed term appears, but in the context of the entire patent, including the specification.”177 Thus, the claims “must be read in view of the specification, of which they are a part.”178 “The construction that stays true to the claim language and most naturally aligns with the patent’s description of the invention will be, in the end, the correct construction.”179 (3) The Prosecution History In addition to the specification, in claim construction the person of ordinary skill in the art is also deemed to read the claim term in the context of the patent’s prosecution history. As explained in Phillips: In addition to consulting the specification, we have held that a court “should also consider the patent’s prosecution history. . . .” Markman, 52 F.3d at 980; see also Graham v. John Deere Co., 838 U.S. 1, 33 (1966) (“An invention is construed not only in the light of the claims, but also with reference to the file wrapper or prosecution history in the Patent Office.”). The prosecution history, which we have designated as part of the “intrinsic evidence,” consists of the complete record of the proceedings before the PTO and includes the prior art cited during the examination of the patent. Like the specification, the prosecution history

176. Id. at 1314–15 (citations omitted). 177. Id. at 1313; Cook Biotech Inc. v. Acell, Inc., 460 F.3d 1365, 1373 (Fed. Cir. 2006); Callicrate v. Wadsworth Mfg., Inc., 427 F.3d 1361, 136 (Fed. Cir. 2005); Pfizer, Inc. v. Teva. Pharm. USC, Inc., 429 F.3d 1364, 1373 (Fed. Cir. 2005). 178. Markman v. Westview Instruments, Inc., 52 F.3d 967, 979 (Fed. Cir. 1995) (en banc), aff ’d, 517 U.S. 370 (1996); Phillips, 415 F.3d at 1313; Cook Biotech, 460 F.3d at 1373; Callicrate, 427 F.3d at 1366; Pfizer, 429 F.3d at 1373; Nystrom v. Trex Co., Inc., 424 F.3d 1136, 1142 (Fed. Cir. 2005). 179. Renishaw PLC v. Marposs Societa’ per Azioni, 158 F.3d 1243, 1250 (Fed. Cir. 1990); see also, e.g., Nystrom, 424 F.3d at 1142; Phillips, 415 F.3d at 1316.

Current Law of the Process of Claim Construction 77 provides evidence of how the PTO and the inventor understood the patent. Furthermore, like the specification, the prosecution history was created by the patentee in attempting to explain and obtain the patent.180

The Federal Circuit has repeatedly cautioned, however, including in Phillips, that the evidentiary weight of a patent’s prosecution history may not be as strong as that of its claims and specification: Yet because the prosecution history represents an ongoing negotiation between the PTO and the applicant, rather than the final product of that negotiation, it often lacks the clarity of the specification and thus is less useful for claim construction purposes. See Inverness Med. Switz. GmgH v. Warner Lambert Co., 309 F.3d 1373, 1380–82 (Fed. Cir. 2002) (the ambiguity of the prosecution history made it less relevant to claim construction); Athletic Alternatives, Inc. v. Prince Mfg., Inc., 73 F.3d 1573, 1580 (Fed. Cir. 1996) (the ambiguity of the prosecution history made it “unhelpful as an interpretive resource” for claim construction).181

However, the Phillips court concluded: Nonetheless, the prosecution history can often inform the meaning of the claim language by demonstrating how the inventor understood the invention and whether the inventor limited the invention in the course of prosecution, making the claim scope narrower than it would otherwise be. Vitronics, 90 F.3d at 1582– 83; see also Chimie v. PPG Indus., Inc., 402 F.3d 1371, 1384 (Fed. Cir. 2005) (“The purpose of consulting the prosecution history in construing a claim is to ‘exclude any interpretation that was disclaimed during prosecution”), quoting ZMI Corp. v. Cardiac Resuscitator Corp., 844 F.2d 1576, 1580 (Fed. Cir. 1988); Southwall Techs., Inc. v. Cardinal IG Co., 54 F.3d 1570, 1576 (Fed. Cir. 1995).182

3. The Proper Claim Construction May Differ from the Ordinary and Customary Meaning in the Relevant Art While a claim term may have a definition that is generally known to those skilled in the art without taking into account a patent’s intrinsic evidence, a patent’s intrinsic evidence may show that the proper construction of the term differs from that generally known in the art.


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a) Patentee as Own Lexicographer Court decisions have long held that a patentee can be “his own lexicographer”183 and define a claim term in the specification that is contrary to its ordinary and customary meaning in the art.184 As explained by the Federal Circuit: A patent applicant thus has the flexibility to imbue new or old terms with a different meaning than they would otherwise have to a person of ordinary skill in the art. All that is required is that the patent applicant set out the different meaning in the specification in a manner sufficient to give one of ordinary skill in the art notice of the change from ordinary meaning.185

The Phillips court indicated: Consistent with that general principle, our cases recognize that the specification may reveal a special definition given to a claim term by the patentee that differs from the meaning it would otherwise possess. In such cases, the inventor’s lexicography governs. See CCS Fitness, Inc. v. Brunswick Corp., 288 F.3d 1359, 1366 (Fed. Cir. 2002).186

Further: Because the inquiry into the meaning of claim terms is an objective one, a patentee who notifies the public that claim terms are to be limited beyond their ordinary meaning to one of skill in the art will be bound by that notification, even where it may have been unintended. See, e.g., Liebel-Flarsheim Co. v. Medrad, Inc., 358 F.3d 989, 905–09 (Fed. Cir. 2004); Scimed Life Sys., Inc, v. Advanced Cardiovascular Sys., Inc., 242 F.3d 1337, 1344 (Fed. Cir. 2001) (stating, in the written description, “[the] structure . . . is the basic . . . structure for all embodiments”); Watts v. XL Sys., 232 F.3d 877, 883 (Fed. Cir. 2000) (stating, in the written description, “the present invention utilizes [the] feature”).187

183. Autogiro Co. of Am. v. United States, 384 F.2d 391, 397 (Ct. Cl. 1967) (“Patent law allows the inventor to be his own lexicographer”); Sinorgchem Co. v. ITC, 511 F.3d 1132, 1138 (Fed. Cir. 2007) (“We have frequently found that a definition set forth in the specification governs the meaning of the claims.”). 184. E.g., CCS Fitness, Inc. v. Brunswick Corp., 288 F.3d 1359, 1366 (Fed. Cir. 2002); Rexnord Corp. v. Laitram Corp., 274 F.3d 1336, 1342 (Fed. Cir. 2001); Johnson Worldwide Assocs., Inc. v. Zebco Corp., 175 F.3d 985, 9890 (Fed. Cir. 1999). 185. Innova/Pure Water, Inc. v. Safari Water Filtration Sys., 381 F.3d 1111, 1116–17 (Fed. Cir. 2004) (citation omitted). 186. Phillips, 415 F.3d at 1316; Cook Biotech Inc. v. Acell, Inc., 460 F.3d 1365, 1373 (Fed. Cir. 2006). 187. Innova/Pure Water, 381 F.3d at 1117.


In addition, redefining a claim term does not necessarily require an express statement of redefinition. As indicated by the Federal Circuit: [A] claim term may be clearly redefined without an explicit statement of redefinition. . . . The specification may define claim terms “by implication” such that the meaning may be “found in or ascertained by a reading of the patent documents.”188

b) Disclaimer or Disavowal of Claim Scope The intrinsic evidence (such as the specification and prosecution history) can also show that the patentee disclaimed or disavowed the scope that a claim term would otherwise have in its ordinary and customary meaning in the relevant art.189 Regarding the specification, the Phillips court explained that: The specification may reveal an intentional disclaimer, or disavowal, of claim scope by the inventor. In that instance . . . the inventor has dictated the correct claim scope, and the inventor’s intention, as expressed in the specification, is regarded as dispositive.190

For example, in SciMed, the Federal Circuit held that when a patent’s specification stated that “[t]he . . . structure defined above is the basic . . . structure for all embodiments of the present invention contemplated and disclosed herein,”191 the words “all embodiments of the present invention” limited the scope of the claimed subject matter to only the embodiments described in the specification. The court found that this was “a clear case of disclaimer of

188. Bell Atl. Network Servs., Inc. v. Covad Commc’ns Group, Inc., 262 F.3d 1258, 1268 (Fed. Cir. 2001) (citation omitted); Astrazeneca AB v. Mutual Pharm. Co., Inc., 384 F.3d 1333, 1339–40 (Fed. Cir. 2004) (“Certainly the ’081 specification’s statement that ‘the solubilizers suitable according to the invention are defined below’ provides a strong signal of lexicography.”). 189. E.g., Verizon Servs. Corp. v. Vonage Holdings Corp., 503 F.3d 1295, 1306–07 (Fed. Cir. 2007); AquaTex Indus., Inc. v. Techniche Solutions, 419 F.3d 1374, 1381–82 (Fed. Cir. 2005) (express disavowal of claim scope not necessary where intrinsic evidence consistently uses description that is more narrow than objective ordinary meaning); Nystrom v. Trex Co., Inc., 424 F.3d 1136, 1145 (Fed. Cir. 2005) (“What Phillips now counsels is that in the absence of something in the written description and/or prosecution history to provide explicit or implicit notice to the public—i.e., those of ordinary skill in the art—that the inventor intended a disputed term to cover more than ordinary and customary meaning revealed by the context of the intrinsic record, it is improper to read the term to encompass a broader definition simply because it may be found in a dictionary, treatise, or other extrinsic source”); SciMed Life Sys., Inc. v. Advanced Cardiovascular Sys., Inc., 242 F.3d 1337, 1343–44 (Fed. Cir. 2001). 190. Phillips, 415 F.3d at 1316; Cook Biotech, 460 F.3d at 1373. 191. SciMed, 242 F.3d at 1344 (emphasis in original).

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subject matter that, absent the disclaimer, could have been considered to fall within the scope of the claim language.”192 Regarding disclaimer or disavowal based on the prosecution history of a patent, in Omega Engineering the Federal Circuit indicated: We indulge a “heavy presumption” that claim terms carry their full ordinary and customary meaning. . . . [However, the] doctrine of prosecution disclaimer is well established in Supreme Court precedent, precluding patentees from recapturing through claim interpretation specific meanings disclaimed during prosecution. [Supreme Court cases have held that:] “It is a rule of patent construction consistently observed that a claim in a patent as allowed must be read and interpreted with reference to claims that have been cancelled or rejected, and the claims allowed cannot by construction be read to cover what was thus eliminated from the patent” [and] ruling, in addressing the invalidity of the patents in suit, that “claims that have been narrowed in order to obtain the issuance of a patent by distinguishing the prior art cannot be sustained to cover that which was previously by limitation eliminated from the patent.” In light of the Court’s guidance, we have adopted that doctrine as a fundamental precept in our claim construction jurisprudence. [R]uling that “the prosecution history (or file wrapper) limits the interpretation of claims so as to exclude any interpretation that may have been disclaimed or disavowed during prosecution in order to obtain claim allowance,” [and that as] a basic principle of claim interpretation, prosecution disclaimer promotes the public notice function of the intrinsic evidence and protects the public’s reliance on definitive statements made during prosecution.193

4. In Certain Situations, Reliance on Extrinsic Evidence to Define Claim Terms Is Proper Extrinsic evidence may be consulted at any time during the claim construction process—for example, to help define the ordinary and customary meaning of terms in the art in general or to teach “relevant scientific principles, the meaning of technical terms, and the state of the art.’”194 In fact, the Phillips court clearly stated, “We have especially noted the help that technical dictionaries may provide to a court to ‘better understand the underlying technology’ and the way in which one of skill in the art might use the claim terms.”195

192. Id. at 1344. 193. Omega Eng’g, Inc. v. Raytek Corp., 334 F.3d 1314, 1323 (Fed. Cir. 2003) (citations omitted). 194. Id. at 1313 (quoting Innova/Pure Water, Inc. v. Safari Water Filtration Sys., 381 F.3d 1111, 1116 (Fed. Cir. 2004)). 195. Id. at 1318 (quoting Vitronics Corp. v. Conceptronic, Inc., 90 F.3d 1576, 1584 n.6 (Fed. Cir. 1996)).


On the other hand, the Federal Circuit has consistently and strongly cautioned that: 1. In most situations, an analysis of the intrinsic evidence alone will resolve any ambiguity in a disputed claim term. In such circumstances, it is improper to rely on extrinsic evidence;196 2. In those cases where the public record unambiguously describes the scope of the patented invention, reliance on any extrinsic evidence is improper;197 3. Extrinsic evidence is to be used for the court’s understanding of the patent, not for the purpose of varying or contradicting the terms of the claims;198 4. However, extrinsic evidence cannot be used to alter a claim construction dictated by a proper analysis of the intrinsic evidence;199 5. When an analysis of intrinsic evidence resolves any ambiguity in a disputed claim term, it is improper to rely on extrinsic evidence to contradict the meaning so ascertained;200 6. The court may receive extrinsic evidence to educate itself about the invention and the relevant technology, but it may not use extrinsic evidence to arrive at a claim construction that is clearly at odds with the construction mandated by the intrinsic evidence;201 and 7. Undue reliance on extrinsic evidence poses the risk that is will be used to change the meaning of claims in derogation of the “indisputable public records consisting of the claims, the specification and the prosecution history,” thereby undermining the public notice function of patents.202 On the other hand, extrinsic evidence may be consulted and relied upon in claim construction when the meaning of the claim as based solely on the intrinsic evidence is ambiguous. As stated by the Federal Circuit: A trial court is quite correct in hearing and relying on expert testimony on an ultimate claim construction question in cases in which the intrinsic evidence (i.e., the patent and its file history—the ‘patent record’) does not answer the

196. Vitronics, 90 F.3d at 1583. 197. Id. 198. Markman v. Westview Instruments, Inc., 52 F.3d 967, 981 (Fed. Cir. 1995) (en banc), aff ’d, 517 U.S. 370 (1996). 199. On-Line Techs., Inc. v. Boden-Seewerk Perkin-Elmer GmbH, 386 F.3d 1133, 1139 (Fed. Cir. 2004). 200. Intel Corp. v. VIA Techs., Inc., 319 F.3d 1357, 1367 (Fed. Cir. 2003). 201. Elkay Mrg. Co. v. Ebco Mfg. Co., 192 F.3d 973, 977 (Fed. Cir. 1999). 202. Phillips v. AWH Corp., 415 F.3d 1303, 1319 (Fed. Cir. 2005) (en banc) (quoting Southwall Techs., Inc. v. Cardinal IG Co., 54 F.3d 1570, 1578 (Fed. Cir. 1995)).

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Chapter 2 Patent Law Principle I question. See Vitronics, 90 F.3d at 1584 (“No doubt there will be instances in which intrinsic evidence is insufficient to enable the court to determine the meaning of the asserted claims, and in those instances, extrinsic evidence . . . may . . . properly be relied upon to understand and construe the claims”).203

V. Specific Rules of Claim Construction In addition to the general procedure and rules for construing claims discussed in Section IV above, there are several specific rules for claim construction that apply in certain fact situations. Non-limiting examples of the most common rules are discussed below.

A. Claim Construction Should Not Take into Consideration the Accused Infringing Product or Process Generally, it is not proper to consider the accused infringing product or process when construing a patent’s claims for purposes of determining infringement.204 Although “it is appropriate for a court to consider the accused device when determining what aspect of the claim should be construed,”205 a “claim is construed in the light of the claim language . . . not in light of the accused device.”206

B. Avoid Importing Limitations from the Specification into the Claims Federal Circuit case law is consistent that it is improper to read limitations from the specification (such as demonstrative embodiments) into claims unless the claims clearly are so limited under the general rules of claim

203. Key Pharms. v. Hercon Labs. Corp., 161 F.3d 709, 716 (Fed. Cir. 1998). 204. As discussed below, the accused infringing product or process may be considered for determining literal infringement of means-plus-function claims. However, this is not a clear exception to the general rule that the accused product or process plays no role in claim construction for literal infringement because construing means-plus-function claims for literal infringement involves considerations that are similar to those used in determining claim scope under the doctrine of equivalents. 205. Exigent Tech., Inc. v. Atrana Solutions, Inc., 442 F.3d 1301, 1310 n.10 (Fed. Cir. 2006). 206. Id. (quoting SRI Int’l v. Matsushita Elec. Corp. of Am., 775 F.2d 1107, 1118 (Fed. Cir. 1985) (en banc)) (alteration and emphasis in the original).

Specific Rules of Claim Construction 83

construction discussed in Section IV above. The Phillips court addressed this issue at length: We also acknowledge that the purpose underlying the Texas Digital line of cases—to avoid the danger of reading limitations from the specification into the claim—is sound. Moreover, we recognize that the distinction between using the specification to interpret the meaning of a claim and importing limitations from the specification into the claim can be a difficult one to apply in practice. See Comark Communs., Inc. v. Harris Corp., 156 F.3d 1182, 1186–87 (Fed. Cir. 1998) (“there is sometimes a fine line between reading a claim in light of the specification, and reading a limitation into the claim from the specification”). However, the line between construing terms and importing limitations can be discerned with reasonable certainty and predictability if the court’s focus remains on understanding how a person of ordinary skill in the art would understand the claim terms. For instance, although the specification often describes very specific embodiments of the invention, we have repeatedly warned against confining the claims to those embodiments. See, e.g., Nazoni Communications, Inc. v. ARM Holdings, PLC, 403 F.3d 1364, 1369 (Fed. Cir. 2005) (claims may embrace “different subject matter than is illustrated in the specific embodiments in the specification”); Lieble-Flarsheim, 358 F.3d at 906– 08; Teleflex, 299 F.3d at 1327; SRI Int’l v. Matsushita Elec. Corp. of Am., 775 F.2d 1107, 1121 (Fed. Cir. 1985). In particular, we have expressly rejected the contention that if a patent describes only a single embodiment, the claims of the patent must be construed as being limited to that embodiment. Gemstar-TV Guide, 383 F.3d at 1366. That is not just because section 112 of the Patent Act requires that the claims themselves set forth the limits of the patent grant, but also because persons of ordinary skill in the art rarely would confine their definitions of terms to the exact representations depicted in the embodiments. To avoid importing limitations from the specification into the claims, it is important to keep in mind that the purposes of the specification are to teach and enable those of skill in the art to make and use the invention and to provide a best mode for doing so. See Spectra-Physics, Inc. v. Coherent, Inc., 827 F.2d 1524, 1533 (Fed. Cir. 1987). One of the best ways to teach a person of ordinary skill in the art how to make and use the invention is to provide an example of how to practice the invention in a particular case. Much of the time, upon reading the specification in that context, it will become clear whether the patentee is setting out specific examples of the invention to accomplish those goals, or whether the patentee instead intends for the claims and the embodiments in the specification to be strictly coextensive. See SciMed Life Sys., 242 F.3d at 1341. The manner in which the patentee uses a term within the specification and claims usually will make the distinction apparent. See Snow v. Lake Shore & Mich. S. Ry. Co., 121 U.S. 617. 630. 30 L. Ed. 1004, 7 S. Ct. 1343, 1887 Dec. Comm’r. Pat. 354 (1887) (it was clear from the specification that there

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Chapter 2 Patent Law Principle I was “nothing in the context to indicate that the patentee contemplated any alternative” embodiment to the one presented).207

The Federal Circuit has further held: In Phillips, we held that while “the specification [should be used] to interpret the meaning of a claim,” courts must not “import[] limitations from the specification into the claim.” Id. at 1323. We specifically noted that it is improper to “confin[e] the claims to th[e] embodiments” found in the specification, as Trans Texas asks us to do. Id.208

Further still, the Federal Circuit has explained: The patentee here has clearly indicated via the specification and the prosecution history that the invention provides, as an essential feature, immediate needle safety upon removal from the patient. It is therefore appropriate to construe the claims so as to ensure that they, too, require that feature. The construction of the term “immediately” to mean “simultaneously with the needle’s withdrawal from the patient” is correct. . . . [However, r]eissue claims 32 and 33 do not contain the word “immediately,” but the district court nonetheless used its construction of that term to limit the claims. We sympathize with the district court’s choice, since we agree that safety at once upon removal from the patient is an essential element of the invention as described by MBO. However, we cannot endorse a construction analysis that does not identify “a textual reference in the actual language of the claim with which to associate a proffered claim construction.” Johnson Worldwide Assocs., Inc. v. Zebco Corp., 175 F.3d 985, 990 (Fed. Cir. 1999); see also Renishaw PLC v. Marposs S.p.A., 158 F.3d 1243, 1248 (Fed. Cir. 1998) (“[I]t is manifest that a claim must explicitly recite a term in need of definition before a definition may enter the claim from the written description.”); E.I. du Pont de Nemours & Co. v. Phillips Petroleum Co., 849 F.2d 1430, 1433 (Fed. Cir. 1988) (finding it improper to impose “a limitation read into a claim from the specification wholly apart from any need to interpret what the patentee meant by particular words or phrases in the claim”).

207. Phillips, 415 F.3d at 1323; see also, e.g., Callicrate v. Wadsworth Mfg., Inc., 427 F.3d 1361, 1368 (Fed. Cir. 2005) (“While claims are indeed to be construed in light of the specification, as in the Phillips case itself, the district court in this case improperly imported limitations from the specification into the claims, thereby restricting the claims to coverage of a single embodiment. See Phillips, 415 F.3d at 1312 (“If we once begin to include elements not mentioned in the claim, in order to limit such claim . . . we should never know where to stop.”)); Eolas Techs., Inc. v. Microsoft Corp., 399 F.3d 1325, 1337 (Fed. Cir. 2005) (commenting that it is improper to limit claims to the preferred embodiment). 208. In re Trans Texas Holdings Corp., 498 F.3d 1290, 1299 (Fed. Cir. 2007).

Specific Rules of Claim Construction 85 . . . None of the disputed terms that are found in claims 32 or 33 can reasonably be construed to impose the simultaneous-safety requirement upon those claims. The district court’s grafting of the “immediately” limitation into claims 32 and 33 is error.209

C. Avoid Reading Out the Preferred Embodiment Federal Circuit case law is also extensive on the principle that “[a] claim construction that excludes a preferred embodiment . . . is ‘rarely, if ever, correct.’”210 “We normally do not interpret claim terms in a way that excludes disclosed examples in the specification.”211

D. Internal Inconsistency of Terms 1. Same Term Within Claims When the same claim term is used more than once in a single claim (or in multiple claims), the “claim term should be construed consistently with its appearance in other places in the same claim or in other claims of the same patent.”212 Moreover, “a word or phrase used consistently throughout a claim should be interpreted consistently.”213 2. Same Term in Specification and Claims On the other hand, when a claim is used in both the specification and the claims, different uses of the term in the specification generally indicate breadth of the term, absent other evidence of narrowing construction such as that discussed in Section IV above. The Federal Circuit has repeatedly held that

209. MBO Labs., Inc. v. Becton, Dickinson & Co., 474 F.3d 1323, 1330–1331 (Fed. Cir. 2007). 210. SanDisk Corp. v. Memorex Prods., Inc., 415 F.3d 1278, 1285 (Fed. Cir. 2005) (quoting Vitronics Corp. v. Conceptronic, Inc., 90 F.3d 1576, 1583 (Fed. Cir. 1996); Pfizer, Inc. v. Teva Pharm. USA, Inc., 429 F.3d 1364, 1374 (Fed. Cir. 2005). 211. Verizon Servs. Corp. v. Vonage Holdings Corp., 503 F.3d 1295, 1305 (Fed. Cir. 2007); MBO Labs., 474 F.3d at 1333 (Fed. Cir. 2007) (“[A] claim interpretation that excludes a preferred embodiment from the scope of the claim is rarely, if ever, correct”) (internal citation omitted); On-Line Techs., Inc. v. Bodenseewerk Perkin-Elmer GmbH, 386 F.3d 1133, 1138 (Fed. Cir. 2004). 212. Rexnord Corp. v. Laitram Corp., 274 F.3d 1336, 1342 (Fed. Cir. 2001); Phillips, 415 F.3d at 1314 (“[T]he usage of a term in one claim can often illuminate the meaning of the same term in other claims.”). 213. Phonometrics, Inc. v. Northern Telecom Inc., 133 F.3d 1459, 1465 (Fed. Cir. 1998).

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“[v]aried use of a disputed term in the written description demonstrates the breadth of the term rather than providing a limited definition.”214

E. Doctrine of Claim Differentiation The Federal Circuit has defined the doctrine of claim differentiation as follows: As this court has frequently stated, the presence of a dependent claim that adds a particular limitation raises a presumption that the limitation in question is not found in the independent claim. See Wenger Mfg., Inc. v. Coating Mach. Sys., Inc., 239 F.3d 1225, 1233 (Fed. Cir. 2001); Comark, 156 F.3d at 1187. Although that presumption can be overcome if the circumstances suggest a different explanation, or if the evidence favoring a different claim construction is strong. . . . In such a setting, where the limitation that is sought to be “read into” an independent claim already appears in a dependent claim, the doctrine of claim differentiation is at its strongest. See Sunrace Roots Enter. Co. v. SRAM Corp., 336 F.3d 1298, 1302–03 (Fed. Cir. 2003) (the presumption that an independent claim does not have a limitation that is introduced for the first time in a dependent claim “is especially strong when the limitation in dispute is the only meaningful difference between an independent and dependent claim, and one party is urging that the limitation in the dependent claim should be read into the independent claim”); Wenger, 239 F.3d at 1233 (“Claim differentiation . . . is clearly applicable when there is a dispute over whether a limitation found in a dependent claim should be read into an independent claim, and that limitation is the only meaningful difference between the two claims.”); D.M.I., Inc. v. Deere & Co., 755 F.2d 1570, 1574 (Fed. Cir. 1985).215

Additionally, in Phillips the court stated: Differences among claims can also be a useful guide in understanding the meaning of particular claim terms. For example, the presence of a dependent

214. Prima Tek II, LLC v. Polypap, SARL, 318 F.3d 1143, 1151 (Fed. Cir. 2003) (“That the term ‘floral holding material’ is used at various points in the written description to refer to a material of any shape or type is simply not ‘a special and particular definition created by the patent applicant,’ Renishaw PLC v. Marposs Societa’ per Azioni, 158 F.3d 1243, 1249, 48 USPQ2d 1117, 1121 (Fed. Cir. 1998), and is thus an insufficient reason to limit the scope of the claim.”); Enercon GMbH v. ITC, 151 F.3d 1376, 1385 (Fed. Cir. 1998) (refusing to limit a term used “interchangeably” in the written description to only one of the uses of the term). 215. Liebel-Flarsheim Co. v. Medrad, Inc., 358 F.3d 898, 910 (Fed. Cir. 2004).

Specific Rules of Claim Construction 87 claim that adds a particular limitation gives rise to a presumption that the limitation in question is not present in the independent claim.216

F. Means-Plus-Function Claim Limitations Usage Note: Special rules for means-plus-function claim limitations apply for: (a) claim construction (see below), (b) literal infringement (see Chapter 3), (c) infringement under the doctrine of equivalents (see Chapter 4), (d) anticipation (see Chapter 6), (e) obviousness (see Chapter 8), and (f) claim definiteness (see Chapter 9). Means-plus-function claim limitations217 are claim terms that do not expressly recite a specific structure or material for accomplishing a specified function. Rather, they are typically written as claiming “a means for” accomplishing a specified function. A typical means-plus-function claim term is shown below. Claim 11. A saw for cutting concrete . . . comprising: . . . means connected to the saw for supporting the surface of the concrete adjacent the leading edge of the cutting blade to inhibit chipping, spalling, or cracking of the concrete surface during cutting. . . .218

Means-plus-function claim limitations are statutorily provided for in 35 U.S.C. Section 112, Paragraph 6, which states: An element in a claim for a combination may be expressed as a means or step for performing a specified function without the recitation of structure, material, or acts in support thereof, and such claim shall be construed to cover the corresponding structure, material, or acts described in the specification and equivalents thereof.219

216. Phillips, 415 F.3d at 1314–15. 217. There are also step-plus-function claims, which are construed in the same way as meansplus-function claims, except that instead of the specification providing “means for” accomplishing a specified function, the specification provides “acts for” accomplishing a specified function. 218. E.g., Chiuminatta Concrete Concepts, Inc. v. Cardinal Indus. Inc., 145 F.3d 1303, 1305–06 (Fed. Cir. 1998) (emphasis added). 219. 35 U.S.C.S. § 112, P 6 (2009).

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1. Construing Whether a Claim Limitation Is a Means-Plus-Function Limitation There have been many patent infringement and invalidity cases in which the parties argue as to whether a claim limitation should be construed as a meansplus-function limitation. This is often the case because such a limitation typically has a narrower scope than a “regular” claim limitation. As stated by the Federal Circuit: “[S]ection 112 para. 6 operates to cut back on the types of means which could literally satisfy the claim language. . . .”220 Otherwise, a “claim limitation described as a means for performing a function, if read literally, could encompass any conceivable means for performing the function.”221 If a claim limitation contains the term means in association with a function, there is a rebuttable presumption that the claim limitation is to be construed as a means-plus-function limitation.222 This presumption, and how it is rebutted, was explained by the court in Callicrate: “This court has established a framework for determining whether elements of a claim invoke means-plus-function treatment.” “If the word ‘means’ appears in a claim element in association with a function, this court presumes that § 112, 6 applies.” “This presumption collapses, however, if the claim itself recites sufficient structure, material, or acts to perform the claimed function.”223

Conversely, “a claim term that does not use ‘means’ will trigger the rebuttable presumption that § 112 P 6 does not apply.”224 As indicated by the Federal Circuit: The presumption that a limitation lacking the term “means” is not subject to section 112 P 6 can be overcome if it is demonstrated that “the claim term fails to ‘recite sufficiently definite structure’ or else recites ‘function without reciting sufficient structure for performing that function.’” CCS Fitness, 288 F.3d at 1369 (quoting Watts v. XL Sys., Inc., 232 F.3d 877, 880 (Fed. Cir. 2000)). Our cases make clear, however, that the presumption flowing from the absence of the term “means” is a strong one that is not readily overcome.225

220. 221. 222. 223. 224. 225.

Johnston v. Ivax Corp., 885 F.2d 1574, 1580 (Fed. Cir. 1989) (emphasis in original). Valmont Indus., Inc. v. Reinke Mfg. Co., Inc., 983 F.3d 1039, 1042 (Fed. Cir. 1993). Callicrate v. Wadsworth Mfg., Inc., 427 F.3d 1361, 1368 (Fed. Cir. 2005). Id. (citations omitted). CCS Fitness, Inc. v. Brunswick Corp., 288 F.3d 1359, 1369 (Fed. Cir. 2002). Lighting World, Inc. v. Birchwood Lighting, Inc., 382 F.3d 1354, 1358 (Fed. Cir. 2004).


These presumptions may be rebutted by a preponderance of the evidence,226 under the general rules of evidence for claim construction (see Section III above).227 The Federal Circuit explained the determination of whether a claim is a means-plus-function claim as follows: This court has consistently held that “[m]eans-plus-function claiming applies only to purely functional limitations that do not provide the structure that performs the recited function.” Phillips v. AWH Corp., 415 F.3d at 1311 (Fed. Cir. 2005). Further, a patentee’s use of the word “means” in a claim limitation creates a presumption that 35 U.S.C. § 112, paragraph 6 applies. TriMed, Inc. v. Stryker Corp., 514 F.3d 1256, 1259 (Fed. Cir. 2008). In this instance, the ’254 patent’s claim language does not include the word “means,” but instead the similar word “mechanism.” This court has had several prior occasions to consider the applicability of means-plus-function treatment in the context of the claim term “mechanism.” In Massachusetts Institute Of Technology v. Abacus Software, 462 F.3d 1344, 1354 (Fed. Cir. 2006) (“MIT ”), this court considered the applicability of means-plus-function treatment to the term “colorant selection mechanism.” This court noted that “[t]he generic terms ‘mechanism,’ ‘means,’ ‘element,’ and ‘device,’ typically do not connote sufficiently definite structure [to avoid means-plus-function treatment] . . . The term ‘mechanism’ standing alone connotes no more structure than the term ‘means.’” Id. (emphasis added). Although “[c]laim language that further defines a generic term like ‘mechanism’ can sometimes add sufficient structure to avoid 57 Ore. 541, 112 P 6,” the adjectival modifier “colorant selection” was not defined in the specification and did not carry any generally understood structural meaning in the art. Id. Thus, this court read “colorant selection mechanism” as invoking treatment as a functional claim because it did not contain sufficient structure. Id. By contrast, in Greenberg v. Ethicon Endo-Surgery, Inc., 91 F.3d 1580 (Fed. Cir. 1996), this court held that paragraph 6 did not apply to the term “detent mechanism,” because “the noun ‘[d]etent’ denotes a type of device with a generally understood meaning in the mechanical arts, even though the definitions are expressed in functional terms.” Id. at 1583. This court examined several definitions of “detent,” such as “[a] catch or checking device, the removal of which allows machinery to work such as the detent which regulates the striking of a clock.” Id. Because these definitions connoted adequate structure that was reasonably well understood in the art, this court concluded that “detent mechanism” was not a mere functional placeholder. Id.

226. E.g., Apex Inc. v. Raritan Computer, Inc., 325 F.3d 1364, 1372 (Fed. Cir. 2003). 227. E.g., id. at 1372; CCS Fitness, 288 F.3d at 1369.

90 Chapter 2 Patent Law Principle I This court must assess the meaning of “mechanism for moving said finger” in light of this case law. In that context, the “mechanism for moving said finger” language includes even less structural context than the “colorant selection mechanism” in MIT. No adjective endows the claimed “mechanism” with a physical or structural component. Further, claim 1 provides no structural context for determining the characteristics of the “mechanism” other than to describe its function. Thus, the unadorned term “mechanism” is “simply a nonce word or a verbal construct that is not recognized as the name of structure and is simply a substitute for the term ‘means for.’“ Lighting World, 382 F.3d at 1360. Unlike the “detent mechanism” in Greenberg which had a known structural meaning, one of skill in the art would have no recourse but to turn to the ’254 patent’s specification to derive a structural connotation for the generically claimed “mechanism for moving said finger. . . .” The applicant for the ’254 patent could have supplied structural context to claim 1 in any number of ways. If claim 1 of the ’254 patent had recited, e.g., a “finger displacement mechanism,” a “lateral projection/retraction mechanism,” or even a “clamping finger actuator,” this court could have inquired beyond the vague term “mechanism” to discern the understanding of one of skill in the art. If that artisan would have understood such language to include a structural component, this court’s analysis may well have turned out differently. Instead the applicant chose to express this claim element as “a means or step for performing a specified function without the recital of structure, material, or acts in support thereof.” 35 U.S.C. § 112, P 6. Therefore, this court must agree with the district court, which properly applied means-plus-function treatment to this term.228

2. Construing Means-Plus-Function Limitations Overall, the construction of a means-plus-function claim limitation proceeds according to 35 U.S.C. Section 112, Paragraph 6, which states: An element in a claim for a combination may be expressed as a means or step for performing a specified function without the recitation of structure, material, or acts in support thereof, and such claim shall be construed to cover the corresponding structure, material, or acts described in the specification and equivalents thereof.229

In In re Donaldson, an en banc Federal Circuit made it clear that meansplus-function claim terms are to be construed in the same manner for all purposes. This includes the determination of patentability and validity,

228. Welker Bearing Co. v. PHD, Inc., 550 F.3d 1090, 1095–96 (Fed. Cir. 2008). 229. 35 U.S.C.S. § 112, P 6 (2009).


including anticipation, obviousness, and compliance with statutory requirements such as 35 U.S.C. Section 112, second paragraph, and infringement (both literal and under the doctrine of equivalents).230 Claim construction for a means-plus-function limitation requires the determination of both the claimed function and structure. As the Federal Circuit explained in Omega Engineering: First, we must identify the claimed function, staying true to the claim language and the limitations expressly recited in the claims. Once the functions performed by the claimed means are identified, we must then ascertain the corresponding structures in the written description that perform those functions.231

a) Function As indicated by the Federal Circuit, it is necessary to define the function of a means-plus-function claim limitation before defining the associated structure(s): Determining a claimed function and identifying structure corresponding to that function involve distinct, albeit related, steps that must occur in a particular order. In short, function must be determined before corresponding structure can be identified. See, e.g., Omega, 334 F.3d at 1321 (“Once the functions performed by the claimed means are identified, we must then ascertain the corresponding structures in the written description that perform those functions.”); BBA Nonwovens Simpsonville, Inc. v. Superior Nonwovens, L.L.C., 303 F.3d 1332, 1343 (Fed. Cir. 2002) (stating that construction of a means-plus-function limitation “requires the court to first identify the function of the means-plus-function limitation and next identify the corresponding structure in the written description necessary to perform that function”); Cardiac Pacemakers, Inc. v. St. Jude Med., 296 F.3d 1106, 1113 (Fed. Cir. 2002) (“After identifying the claimed function, the court must then determine what structure, if any, disclosed in the specification corresponds to the claimed function”).232

In construing the meaning of the claimed function, the general rules of claim construction apply.233 For example, “a court may not construe a meansplus-function limitation ‘by adopting a function different from that explicitly recited in the claim.’”234 In addition, “[a] court errs ‘by importing the functions

230. 231. 232. 233. 234.

In re Donaldson Co., 16 F.3d 1189, 1193–94 (Fed. Cir. 1994) (en banc). Omega Eng’g, Inc. v. Raytek Corp., 334 F.3d 1314, 1322 (Fed. Cir. 2003). JVW Enters, Inc. v. Interact Accessories, Inc., 424 F.3d 1324, 1330 (Fed. Cir. 2005). See, e.g., Omega Eng’g, 334 F.3d at 1322. JWR Enters., 424 F.3d at 1331.

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of a working device into the[] specific claims, rather than reading the claims for their meaning independent of any working embodiment.’”235 b) Structure Once the function is identified, the specification is reviewed for one or more structures that correspond with the claimed function. “A disclosed structure is corresponding ‘only if the specification or the prosecution history clearly links or associates that structure to the function recited in the claim. In other words, “the structure must be necessary to perform the claimed function.’”236 “In order to qualify as corresponding, the structure must not only perform the claimed function, but the specification must clearly associate the structure with performance of the function.”237 “Application of § 112, 6 requires identification of the structure in the specification which performs the recited function.”238 The proper construction of a means-plus-function claim limitation includes not only those structures that are expressly disclosed in the specification and are clearly associated with performance of the specified function, but also “equivalents thereof.”239 (1) Section 116, Paragraph 6 Equivalency Means-plus-function claim limitations are the sole exception to the general rule that claim construction defines the literal scope of a claim and that equivalents of a construed claim (if any) are considered only under the doctrine equivalents (see Chapter 4). Therefore, claim construction of the literal scope of a claim having a means-plus-function limitation involves the determination of the disclosed structure in the specification and equivalents thereof under Section 112, Paragraph 6.240 Determination of equivalency under Section 112, Paragraph 6 is similar but not identical to an equivalence analysis under the doctrine of equivalents (see Chapter 4).241 An equivalence analysis under Section 112, Paragraph 6 takes into consideration whether there is an “insubstantial” difference from

235. 236. 237. 238. 239. 240.

Id. Omega Eng’g, 334 F.3d at 1322. JWR Enters., 424 F.3d at 1332. Callicrate v. Wadsworth Mfg., Inc., 427 F.3d 1361, 1369 (Fed. Cir. 2005). 35 U.S.C.S. § 112, P 6 (2009). E.g., Frank’s Casing Crew & Rental Tools, Inc. v. Weatherford Int’l, Inc., 389 F.3d 1370, 1378 (Fed. Cir. 2004); Valmont Indus., Inc. v. Reinke Mfg. Co., Inc., 983 F.3d 1039, 1042 (Fed. Cir. 1993). 241. E.g., Chiuminatta Concrete Concepts, Inc. v. Cardinal Indus. Inc., 145 F.3d 1303, 1310–11 (Fed. Cir. 1998); Valmont, 938 F.3d at 1043–44.


the claimed structure and the allegedly equivalent structure.242 “The proper test is whether the differences between the structure in the accused device and any disclosed in the specification are insubstantial.”243 Specifically, “[i]n the context of Section 112, however, an equivalent results from an insubstantial change which adds nothing of significance to the structure, material, or acts disclosed in the patent application.”244 “The ‘insubstantial difference’ analysis requires a determination of “whether the ‘way’ that accused structure performs the claimed function, and the ‘result’ of that performance, are substantially different from the ‘way’ the claimed function is performed by the ‘corresponding structure . . . described in the specification,’ or its ‘result.’”245 An equivalence analysis under Section 112, Paragraph 6 also takes into consideration whether the accused structure is interchangeable with the claimed structure.246 In addition, as discussed in more detail in Chapters 3 and 4 (covering respectively literal infringement and infringement under the doctrine of equivalents), equivalents under Section 112, Paragraph 6 must have existed at the time the patent was issued.247 Therefore, later-arising structures cannot literally infringe a means-plus-function claim term, but might infringe such a claim under the doctrine of equivalents.248 Finally, another interesting wrinkle in the law of claim construction regarding means-plus-functions claim terms is that while claim construction is a question of law,249 a determination of the scope of equivalents under Section 112, Paragraph 6 is based on a question of fact250 because it involves an infringement determination as to whether an accused device is an equivalent—and infringement determinations are questions of fact.251

242. E.g., Ishida Co., Ltd. v. Taylor, 221 F.3d 1310, 1317 (Fed. Cir. 2000); Odetics, Inc. v. Storage Tech. Corp., 185 F.3d 1259, 1267 (Fed. Cir. 1999). 243. Chiuminatta, 145 F.3d at 1303. 244. Valmont, 983 F.3d at 1043. 245. Ishida, 221 F.3d at 1317 (quoting Odetics, 185 F.3d at 1267). 246. E.g., Interactive Pictures Corp. v. Infinite Pictures, Inc., 274 F.3d 1371, 1383 (Fed. Cir. 2001) (“[T]he known interchangeability test looks to the knowledge of a skilled artisan to see whether that artisan would contemplate the interchange as a design choice.”). 247. Chiuminatta, 145 F.3d at 1310; Frank’s Casing Crew & Rental Tools, Inc. v. Weatherford Int’l, Inc., 389 F.3d 1370, 1379 (Fed. Cir. 2004); Al-Site Corp. v. VSI Int’l, Inc., 174 F.3d 1308, 1320–21 (Fed. Cir. 1999); Welker Bearing Co. v. PHD, Inc., 550 F.3d 1090, 1099 (Fed. Cir. 2008). 248. Chiuminatta, 145 F.3d at 1310; Frank’s Casing, 389 F.3d at 1379; Al-Site Corp., 174 F.3d at 1308, 1320–21; Welker Bearing, 550 F.3d at 1099. 249. E.g., IMS Tech., Inc. v. Haas Automation, Inc., 206 F.3d 1422, 1329–30 (Fed. Cir. 2000). 250. Id. 251. Id.

94 Chapter 2 Patent Law Principle I

G. Product-by-Process Claims A product-by-process claim is “one in which the product is defined at least in part in terms of the method or process by which it is made.”252 While the patent statute does not provide for product-by-process claims, the courts have long recognized the appropriateness of such claims.253 The original purpose of product-by-process claims was to allow inventors to claim “an otherwise patentable product that resists definition by other than the process by which it is made.”254 Thus, the original intention behind product-by-process claims was to prevent an inventor from being foreclosed from the benefits of the patent system simply because her or his product was difficult to describe in words, or its structure was insufficiently understood.255 “Today, however, product-by-process claims are used by inventors even if the invention could have been described independent of the process.”256 1. Construing Product-by-Process Claims for Validity For purposes of determining validity of product-by-process claims, and thus also for determining patentability of these claims in the U.S. Patent Office, the law is clear that product-by-process claims are to be construed based only on the product and not on the process steps. As explained by the Federal Circuit in SmithKline Beecham v. Apotex: Regardless of how broadly or narrowly one construes a product-by-process claim, it is clear that such claims are always to a product, not a process. It has long been established that one cannot avoid anticipation by an earlier product disclosure by claiming the same product more narrowly, that is, by claiming the

252. Bonito Boats, Inc. v. Thunder Craft Boats, Inc., 489 U.S. 141, 158–59 (1989); SmithKline Beecham Corp. v. Apotex Corp., 439 F.3d 1312, 1315 (Fed. Cir. 2006). 253. E.g., In re Thorpe, 777 F.2d 695, 697 (Fed. Cir. 1985). 254. Id. 255. SmithKline, 439 F.3d at 1315. 256. Id.; but cf. SmithKline Beecham Corp. v. Apotex Corp., 453 F.3d 1346 (Fed. Cir. 2006) (reh’g denied, reh’g en banc denied), 453 F.3d 1347 (dissenting opinions) (arguing that there should be two different types of product-by-process claims, one type for known products where the product does not need to be novel but the process limitations of the claim serve as limitations in determining infringement, and another type for products that cannot be claimed without reference to the process by which the product is made, and for which the process limitations do not serve as limitations in determining infringement); See 970 F.2d 834, rehearing en banc denied, 974 F.2d 1299 (concurring opinion), 974 F.2d 1279 (dissenting opinions) (same); Abbott Labs. v. Sandoz, Inc., 2009 U.S. App. LEXIS 10476, *106–107 (Fed. Cir. 2009) (Newman, dissenting) (same); Abbott, 2009 U.S. App. LEXIS 10476, *107–110 (Lourie, dissenting) (same).

Specific Rules of Claim Construction 95 product as produced by a particular process. This was the exact issue in In re Thorpe. There, the patent concerned a composition that was used in carbonless copy paper systems. 777 F.2d at 696. The composition was known in the prior art but was previously made using zinc dibenzoate. In a product-by-process claim, Thorpe claimed the same composition made by a process that used zinc oxide and benzoic acid, rather than zinc dibenzoate. The court upheld the PTO’s rejection of the claim. Id. at 698. It held that “if the product in a productby-process claim is the same as or obvious from a product of the prior art, the claim is unpatentable even though the prior product was made by a different process.” Id. at 697. In re Thorpe has never been overruled and has been followed for many years by the PTO. The current [Manual of Patent Examining Procedure] states: “[Even] though product-by-process claims are limited by and defined by the process, determination of patentability is based on the product itself. The patentability of a product does not depend on its method of production. If the product in the product-by-process claim is the same as or obvious from a product of the prior art, the claim is unpatentable even though the prior product was made by a different process.” MPEP § 2113 (8th ed., Rev. 2, May 2004) (quoting In re Thorpe, 777 F.2d at 698).257

2. Construing Product-by-Process Claims for Infringement In Abbott Labs. v. Sandoz, Inc., the Federal Circuit finally settled a nearly seventeen-year intra-circuit split on the proper construction of productby-process claims for determining infringement.258 The court sua sponte held en banc that process limitations in product-by-process claims serve as limitations in determining infringement.259 Therefore a product-by-process claim is infringed only by a product that is made by a process that is the same as, or equivalent to, the process limitations in the claim.260 The court was clear

257. SmithKline, 439 F.3d at 1317; but see SmithKline, 453 F.3d at 1346 (reh’g denied, reh’g en banc denied), 453 F.3d 1347 (dissenting opinions) (arguing that there should be two different types of product-by-process claims, one type for known products where the product does not need to be novel but the process limitations of the claim serve as limitations in determining infringement, and another type for products that cannot be claimed without reference to the process by which the product is made, and for which the process limitations do not serve as limitations in determining infringement); See 970 F.2d 834, rehearing en banc denied, 974 F.2d 1299 (concurring opinion), 974 F.2d 1279 (dissenting opinions) (same); Abbott Labs., 2009 U.S. App. LEXIS 10476, *106–107 (Newman, dissenting) (same); Abbott, 2009 U.S. App. LEXIS 10476, *107–110 (Lourie, dissenting) (same). 258. Abbott Labs. v. Sandoz, Inc., 2009 U.S. App. LEXIS 10476 (Fed. Cir. 2009) (en banc in relevant part). 259. Id. at *26–27. 260. Id. at *28.

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that this rule applies to all product-by-process claims, regardless of whether the product could be claimed without reference to the process by which it is made.261 a) History of Product-by-Process Claims in the Federal Circuit For almost 17 years, there has been a split within the Federal Circuit as to whether process limitations in product-by-process claims are limitations for determining infringement. In 1991, in Scripps, a panel of the Federal Circuit held that product-by-process claims were not limited by the process steps within the claims.262 The patent in Scripps contained product-by-process claims directed to a product made in accordance with a particular process.263 The court held that the accused product, which was produced by a different process, nonetheless infringed the product-by-process claims because “in determining patentability we construe the product as not limited by the process stated in the claims. Since claims must be construed the same way for validity and for infringement, the correct reading of the product-by-process claims is that they are not limited to product prepared by the process set forth in the claims.”264 In 1992, in Atlantic Thermoplastics, a different panel of the Federal Circuit held—completely opposite to Scripps—that the process steps in productby-process claims do serve as claim limitations for determining infringement.265 The product-by-process claim in Atlantic Thermoplastics concerned shock absorbing shoe innersoles.266 The patentee argued that under Scripps the innersoles infringed the product-by-process claim because they were physically indistinguishable from the claimed product, even though they were made by a process substantially different from the clamed process.267 The Atlantic Thermoplastics court disagreed, stating: “In light of Supreme Court case law and the history of product-by-process claims, this court acknowledges that infringement analysis proceeds with reference to the patent claims. Thus, process terms in product-by-process claims serve as limitations in determining infringement.”268

261. 262. 263. 264. 265. 266. 267. 268.

Id. at *31–32. Scripps Clinic and Research Foundation v. Genentech, 927 F.2d 1565, 1583 (Fed. Cir. 1991). Id. at 1570. Id. at 1583. Atlantic Thermoplastics, 970 F.2d at 846–47. Id. at 835. Id. at 838. Id. at 846–47.


A sharply divided court denied a request to rehear Atlantic Thermoplastics en banc, with four judges dissenting in four separate opinions.269 Judge Rich argued that the panel’s decision was improper because claim construction was not an issue; instead the patentee had conceded that its product-by-process claim was limited to the specified process.270 He also condemned the panel for ignoring the Federal Circuit’s rule that a prior binding panel decision (i.e., Scripps) could not be ignored or overruled except by an en banc decision.271 Judge Newman, joined by Judges Rich and Lourie, argued that the panel in Atlantic Thermoplastics had incorrectly ruled that all process steps of a productby-process claim should be automatically treated as claim limitations.272 In their view, the process steps should sometimes be treated as claim limitations and sometimes not, depending on the “class of claim” at issue.273 Specifically, these judges contended that process limitations should not impact the validity or infringement of “true” product-by-process claims, which are those to novel products that cannot be described solely by their physical properties (as they argued was the case in Scripps), but should apply to limit claims directed to old products made by a new process (as they argued was the case in Atlantic Thermoplastics).274 A major problem with this position by the dissenters is that the law is clear that there are not two different types of product-by-process claims, distinguished by whether the product can be described without regard to the process by which it is made. Any product may be claimed in a product-by-process claim, regardless of whether the product can be described without regard to how it is made.275 Further, the validity and patentability of all productby-process claims is based solely on the novelty and nonobviousness of the product claimed, without regard to the process limitations and regardless of whether the product can be described without regard to the process by which it is made.276

269. See 970 F.2d 834, rehearing en banc denied, 974 F.2d 1299 (concurring opinion), 974 F.2d 1279 (dissenting opinions). 270. 974 F.2d at 1280 (Rich, dissenting). 271. Id. at 1281. 272. 974 F.2d at 1282–83 (Newman, dissenting). 273. Id. at 1284. 274. Id. 275. E.g., SmithKline, 439 F.3d at 1315 (“Today, however, product-by-process claims are used by inventors even if the invention could have been described independent of the process.”). 276. E.g., id. at 1315–17 (reiterating that the validity of all product-by-process claims depends solely on the novelty and nonobviousness of the product, without regard to how it is made, and quoting M.P.E.P. § 2113 which instructs that patentability of all product-by-process claims is based solely on the novelty and nonobviousness of the product, without regard to how it is made).

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In 2006, in SmithKline, the Federal Circuit came close to addressing the Scripps–Atlantic Thermoplastics split and discussed the issue in detail.277 However, the SmithKline court left the split unresolved. The court declined to decide the issue of infringement of product-by-process claims because it affirmed the district court’s grant of summary judgment that the product-byprocess claims were anticipated.278 Because the claims were found to be invalid, the court declined to decide the issue of infringement.279 The SmithKline court explained that anticipation of a product-by-process claim has always turned on whether the product itself was disclosed in the prior art, and anticipation could not be avoided by claiming a known product as produced by a different process: We need not address this controversy here. The issue here does not turn on how broadly or narrowly we construe the ’944 patent’s claims, for it is undisputed that the product that is the subject of the patent’s claims is paroxetine. Rather the issue is whether the [prior art] anticipated the . . . product-by-process patent, when the [prior art] broadly claimed paroxetine without regard to the process by which it was made. Thus, the ultimate issue is simply whether the prior art disclosure of a product precludes a future claim to that same product when it is made by an allegedly novel process. Regardless of how broadly or narrowly one construes a product-by-process claim, it is clear that such claims are always to a product, not a process. It has long been established that one cannot avoid anticipation by an earlier product disclosure by claiming the same product more narrowly, that is, by claiming the product as produced by a particular process.280

As with Atlantic Thermoplastics, a divided court denied a request to rehear SmithKline en banc, with three judges dissenting in two separate opinions.281 Judge Newman, joined by Judge Gajarsa, referred to her dissent in Atlantic Thermoplastics and argued that Atlantic Thermoplastics and Scripps could be reconciled if two different classes of product-by-process claims were recognized, depending on whether the product could be described without reference to how it is made.282 Judge Rader, in a dissent joined by Judge Gajarsa,

277. 278. 279. 280. 281.

SmithKline, 439 F.3d at 1315–17. Id. at 1319. Id. at 1316–17. Id. (footnote and header omitted). SmithKline Beecham Corp. v. Apotex Corp., 453 F.3d 1346 (Fed. Cir. 2006) (reh’g denied, reh’g en banc denied), 453 F.3d at 1347 (dissenting opinions). 282. Id. at 1347 (Newman, dissenting) (“As I wrote in my dissent from the panel decision, Scripps accommodates the situation where the product is novel and complex and cannot be described other than by the way it was made, while Atlantic Thermoplastics deals with a product whose production requires use of a certain process, whether or not the product itself is novel.”).


argued that the panel should have addressed and resolved the split, and was only adding to the confusion:283 The role of the claims in an infringement or anticipation analysis is at the heart of patent law. Whether all the words in a product-by-process claim are limiting is a question that patent attorneys, trial courts, and apparently this court, still cannot confidently answer. . . . Without doubt, this court’s product-by-process law contains an apparent conflict. Choosing between Scripps . . . and Atlantic Thermoplastics . . . is not task this court through its inaction should continue to force on trial courts, as it did in Smithkline. Giving those same trial courts the option of ignoring the claim language altogether is simply inexcusable.284

b) Basis of the Abbott Court’s En Banc Holding The Federal Circuit in Abbott based its sua sponte en banc holding that process limitations in product-by-process claims are to be considered as limitations for determining infringement on “Supreme Court precedent and the treatment of product-by-process claims throughout the years by the PTO and other binding court decisions.”285 The court first discussed a number of Supreme Court decisions, dating from 1874 to 1938, in which, the court asserted, “the Supreme Court consistently noted that process terms that define the product in a product-by-process claim serve as enforceable limitations.”286 Next, the court considered “binding case law of this court’s predecessor courts, the United States Court of Customs and Patent Appeals, and the United States Court of Claims,” which the court asserted “followed the same rule” as the Supreme Court, “that process terms that define the product in a product-byprocess claim serve as enforceable limitations.”287 Further, the court noted that, “[t]his court’s sister circuits also followed the general rule that the defining process terms limit product-by-process claims.”288 The court also cited to Warner-Jenkinson,289 arguing that the Supreme Court’s broad principle for the doctrine of equivalents that each limitation of a claim is material to defining the claim’s scope supported the court’s holding for infringement of product-by-process claims.290

283. 284. 285. 286. 287. 288. 289. 290.

Id. at 1347–48 (Rader, dissenting). Id. at 1347–48 (Rader, dissenting). Abbott, 2009 U.S. App. LEXIS 10476, *26. Id. at *22. Id. at *22–23. Id. at *23. Warner-Jenkinson Co. v. Hilton Davis Chem. Co., 520 U.S. 17 (1997). Abbott, 2009 U.S. App. LEXIS 10476, *27.

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Chapter 2 Patent Law Principle I More recently, the Supreme Court has reiterated the broad principle that “[e]ach element contained in a patent claim is deemed material to defining the scope of the patented invention.” Although Warner-Jenkinson specifically addressed the doctrine of equivalents, this rule applies to claim construction overall. As applied to product-by-process claims, Warner-Jenkinson thus reinforces the basic rule that the process terms limit product-by-process claims.291

c) Scripps Is Expressly Overruled The Abbott court endorsed Atlantic Thermoplastics and expressly overruled Scripps. In summarizing its holding, the court cited and quoted Atlantic Thermoplastics, stating: Thus, based on Supreme Court precedent and the treatment of productby-process claims throughout the years by the PTO and other binding court decisions, this court now restates that “process terms in product-by-process claims serve as limitations in determining infringement.” Atl. Thermoplastics, 970 F.2d at 846–47.292

The Abbott decision did not discuss Scripps other than to overrule it: As applied to product-by-process claims, Warner-Jenkinson thus reinforces the basic rule that the process terms limit product-by-process claims. To the extent that Scripps Clinic is inconsistent with this rule, this court hereby expressly overrules Scripps Clinic.293

d) The Holding of Abbott Applies to All Types of Product-by-Process Claims The en banc Federal Circuit made it clear that its holding in Abbott applies to all types of product-by-process claims, regardless of whether the product can be described without reference to the process by which it is made.294 According to the court, a contrary rule, which was advocated by both dissenting opinions, would give the patentee more than the inventor claimed: [I]t is both unnecessary and logically unsound to create a rule that the process limitations of a product-by-process claim should not be enforced in some

291. 292. 293. 294.

Abbott, 2009 U.S. App. LEXIS 10476, *27 (internal citation omitted). Id. at *26–27. Id. at *27. Id. at *28–32.

Specific Rules of Claim Construction 101 exceptional instance when the structure of the claimed product is unknown and the product can be defined only by reference to a process by which it can be made. Such a rule would expand the protection of the patent beyond the subject matter that the inventor has “particularly point[ed] out and distinctly claim[ed]” as his invention, 35 U.S.C. § 112, P [2].295

The court emphasized this holding in response to two dissents which argued that the court’s en banc holding should not apply to all types of product-by-process claims.296 In particular, the dissenters argued that when product-by-process claims are required to claim a novel product because the product cannot be described without reference to the process by which it is made, the process limitations of these claims should not be considered for infringement purposes.297

H. Preamble as a Limitation Claims in U.S. patents consist of three parts: the preamble, the transitional phrase, and the body of the claim.298 As discussed in more detail below, the preamble of a claim may generally introduce the field of the claimed technology and state the purpose or intended use of the invention, as the invention is claimed in the body of the claim. Accordingly, the body of the claim sets forth the limitations of the claim that “particularly point[] out and distinctly claim[] the subject matter [of the claimed] invention.”299 Transitional phrases are addressed in Section [V][J] below. These three parts of a claim are illustrated in the following claim, wherein the portion of the claim precedes its definition: 1. A hand-held punch pliers for simultaneously punching and connecting overlapping sheet metal such as at the corners of overlapping ceiling tile grids [preamble] comprising [transitional phrase]: a die handle; a hollow die affixed to said die handle; . . . [body].300

295. 296. 297. 298.

Id. at *31–32. Id. at *46 (Newman, dissenting); Id. at *107 (Lourie, dissenting). Id. at *106–107 (Newman, dissenting); Id. at *107–110 (Lourie, dissenting). Cias, Inc. v. Alliance Gaming Corp., 504 F.3d 1356, 1360 (Fed. Cir. 2007) (“claims usually are structured with a preamble, a ‘transition phrase,’ and the elements or steps that are necessary to the right to exclude”). 299. 35 U.S.C.S. § 112, P 2 (2009). 300. Intirtool, Ltd. v. Texar Corp., 369 F.3d 1289, 1292 (Fed. Cir. 2004) (claim 1 of U.S. Patent No. 5,022,253).

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1. Determining Whether the Preamble Is a Limitation In On Demand, the Federal Circuit summarized the law on whether a preamble is to be considered as a claim limitation—and therefore, a part of the claim for purposes of both validity (patentability) and infringement—or whether it “is simply an introduction to the general field of the claim” and therefore, is not to be considered for validity and infringement purposes. In considering whether a preamble limits a claim, the preamble is analyzed to ascertain whether it states a necessary and defining aspect of the invention, or is simply an introduction to the general field of the claim. In Kropa v. Robie, 38 C.C.P.A. 858, 187 F.2d 150, 152, 1951 Dec. Comm’r Pat. 177 (CCPA 1951), the court aptly described the inquiry as whether the preamble is “necessary to give life, meaning and vitality to the claims or counts.” See, e.g., Poly-America, L.P. v. GSE Lining Tech., Inc., 383 F.3d 1303, 1309–10 (Fed. Cir. 2004) (the specification described the “blown-film” as a fundamental characteristic of the invention, and its use in the preamble limited the claims); In re Cruciferous Sprout Litigation, 301 F.3d 1343, 1347–48 (Fed. Cir. 2002) (the preamble phrase “rich in glucosinolates” was limiting because the patentee relied on the preamble to distinguish the prior art in prosecution); General Elec. Co. v. Nintendo Co., Ltd., 179 F.3d 1350, 1361–62 (Fed. Cir. 1999) (where the specification made clear that the invention was a mode of display of binary data on a raster scanned display device rather than all display devices, the preamble language “displaying a pattern on a raster scanned display device by mapping bits” was a claim limitation).301

Other Federal Circuit cases have made similar determinations. For example, in Intritool, the court held: In general, a claim preamble is limiting if “it recites essential structure or steps, or if it is necessary to give ‘life, meaning, and vitality’ to the claim.” Id. at 808 (quoting Pitney Bowes, Inc. v. Hewlett-Packard Co., 182 F.3d 1298, 1305 (Fed. Cir. 1999)). However, if the body of the claim “describes a structurally complete invention such that deletion of the preamble phrase does not affect the structure or steps of the claimed invention,” id. at 809, the preamble is generally not limiting unless there is “clear reliance on the preamble during prosecution to distinguish the claimed invention from the prior art,” id. at 808.302

301. On Demand Mach. Corp. v. Ingram Indus., 442 F.3d 1331, 1343 (Fed. Cir. 2006). 302. Intirtool, 369 F.3d at 1295.


Similarly, in Biocon, the court explained: While it is true that preamble language is often treated as nonlimiting in nature, it is not unusual for this court to treat preamble language as limiting, as it is in this case. Preamble language that merely states the purpose or intended use of an invention is generally not treated as limiting the scope of the claim. However, we have stated that there is no “litmus test” for determining whether preamble language is limiting. To the contrary, we have stated that “whether to treat a preamble as a claim limitation is determined on the facts of each case in light of the claim as a whole and the invention described in the patent.” If the body of the claim “sets out the complete invention,” the preamble is not ordinarily treated as limiting the scope of the claim. However, the preamble is regarded as limiting if it recites essential structure that is important to the invention or necessary to give meaning to the claim. That is, if the claim drafter “chooses to use both the preamble and the body to define the subject matter of the claimed invention, the invention so defined, and not some other, is the one the patent protects.” Moreover, when the limitations in the body of the claim “rely upon and derive antecedent basis from the preamble, then the preamble may act as a necessary component of the claimed invention.”303

I. Construction of Claims to Preserve Validity The Federal Circuit recognizes a very limited rule that when a claim’s interpretation is truly ambiguous under the standard rules of claim construction, and it is possible to choose between one construction that would render the claim invalid (e.g., for being too broad, and thus being anticipated by prior art), or another construction that would render the claim valid (e.g., for being more narrow, and thus avoiding the prior art), “[c]laims should be so construed, if possible, as to sustain their validity.”304 However, this rule has been expressly limited by the Federal Circuit in its en banc Phillips case. When the standard rules of claim construction permit an unambiguous claim construction, that construction must be used, even if the result is an invalid claim. As indicated by the Federal Circuit in Phillips: Invoking the principle that “claims should be so construed, if possible, as to sustain their validity,” Rhine v. Casio, Inc., 183 F.3d 1342, 1345 (Fed. Cir. 1999),

303. Bicon, Inc. v. Straumann Co., 441 F.3d 945, 952 (Fed. Cir. 2006) (citations omitted); Catalina Mktg. Int’l, Inc. v. Coolsavings.com, Inc., 289 F.3d 801, 808 (Fed. Cir. 2002). 304. Rhine v. Casio, Inc., 183 F.3d 1342, 1345 (Fed. Cir. 1999).

104 Chapter 2 Patent Law Principle I argues that the term “baffles” should be given a restrictive meaning because if the term is not construed restrictively, the asserted claims would be invalid. While we have acknowledged the maxim that claims should be construed to preserve their validity, we have not applied that principle broadly, and we have certainly not endorsed a regime in which validity analysis is a regular component of claim construction. See Nazomi Communications, 403 F.3d at 1368–69. Instead, we have limited the maxim to cases in which “the court concludes, after applying all the available tools of claim construction, that the claim is still ambiguous.” Liebel-Flarsheim, 358 F.3d at 911; see also Generation II Orthotics, Inc. v. Medical Tech., Inc., 263 F.3d 1356, 1365 (Fed. Cir. 2001) (“Claims can only be construed to preserve their validity where the proposed claim construction is ‘practicable,’ is based on sound claim construction principles, and does not revise or ignore the explicit language of the claims”); Elekta Instrument S.A. v. O.U.R. Scientific Int’l, Inc., 214 F.3d 1302, 1309 (Fed. Cir. 2000) (“having concluded that the amended claim is susceptible of only one reasonable construction, we cannot construe the claim differently from its plain meaning in order to preserve its validity”); E.I. du Pont de Nemours & Co. v. Phillips Petroleum Co., 849 F.2d 1430, 1434 (Fed. Cir. 1988) (rejecting argument that limitations should be added to claims to preserve the validity of the claims). In such cases, we have looked to whether it is reasonable to infer that the PTO would not have issued an invalid patent, and that the ambiguity in the claim language should therefore be resolved in a manner that would preserve the patent’s validity. . . . In this case, unlike in Klein and other cases in which the doctrine of construing claims to preserve their validity has been invoked, the claim term at issue is not ambiguous. Thus, it can be construed without the need to consider whether one possible construction would render the claim invalid while the other would not. The doctrine of construing claims to preserve their validity, a doctrine of limited utility in any event, therefore has no applicability here. In sum, we reject AWH’s arguments in favor of a restrictive definition of the term “baffles.”305

Similarly, in MBO Laboratories, a post-Phillips case, the Federal Circuit again held that where the construction of a claim is clear and leads to the invalidity of the claim, the court must go with the clear construction of the claim despite its effect on the claim’s validity: Claim construction should not, of course, be blind to validity issues: “claims should be so construed, if possible, as to sustain their validity.” Rhine v. Casio, Inc., 183 F.3d 1342, 1345 (Fed. Cir. 1999). A claim that is interpreted too broadly will run into validity issues, providing motivation for the construing court to

305. Phillips v. AWH Corp., 415 F.3d 1303, 1327–28 (Fed. Cir. 2005) (en banc).

Specific Rules of Claim Construction 105 choose a narrower interpretation if possible. However, validity construction should be used as a last resort, not a first principle: “we have limited the maxim [that claims are to be construed to preserve validity] to cases in which the court concludes, after applying all the available tools of claim construction, that the claim is still ambiguous.” Phillips, 415 F.3d at 1327 (quotation marks omitted). Construction of the claims here is not so difficult a problem as to require resort to the validity maxim. MBO clearly sought in reissue to broaden the scope of its patent coverage by rewriting its claims to cover all relative movement, not just retraction. That broadening was the explicitly stated purpose of the reissue application. . . . In light of these clear statements in the prosecution history of the [reissue] patent, we are compelled to give effect to MBO’s stated intent to broaden the coverage of its claims. Whether those broadened claims are invalidated . . . is an issue separate from [claim] construction.306

J. Transitional Phrases Certain commonly used transitional phrases in U.S. patent claims are terms of art that have very specific legal meanings. As discussed in Section [V][H] above, transitional phrases are found between the preamble and the body of a patent claim. These phrases define the scope of a claim with respect to what additional components or steps (if any) are excluded from the scope of the claim. There are three commonly used and well-recognized transitional phrases in U.S. patent law: comprising, consisting essentially of, and consisting of. As explained below, these phrases are legally construed as open-ended (comprising), partially open-ended (consisting essentially of ), and closed (consisting of ). 1. Open-Ended (Comprising) As consistently held by the Federal Circuit: “The word ‘comprising’ transitioning from the preamble to the body signals that the entire claim is presumptively open-ended.”307 As explained by the court: When a patent claim uses the word “comprising” as its transitional phrase, the use of “comprising” creates a presumption that the body of the claim is open. In the parlance of patent law, the transition “comprising” creates a presumption

306. MBO Labs., Inc. v. Becton, Dickinson & Co., 474 F.3d 1323, 1332 (Fed. Cir. 2007). 307. Gillette Co. v. Energizer Holdings, Inc., 405 F.3d 1367, 1371 (Fed. Cir. 2005).

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Chapter 2 Patent Law Principle I that the recited elements are only a part of the device, that the claim does not exclude additional, unrecited elements.308

Therefore, “[t]he addition of unclaimed elements does not typically defeat infringement when a patent uses an open transitional phrase such as ‘comprising.’”309 The Federal Circuit has also held that: Although “comprised of ” is not used as regularly as “comprising” and “comprised of ” is sometimes used other than as a “transition phrase,” nonetheless it partakes of long-standing recognition as an open-ended term. The usual and generally consistent meaning of “comprised of,” when it is used as a transition phrase, is, like “comprising,” that the ensuing elements or steps are not limiting.310

2. Partially Open-Ended (Consisting Essentially of ) As explained by the Federal Circuit in PPG Industries: “Consisting essentially of ” is a transition phrase commonly used to signal a partially open claim in a patent. Typically, “consisting essentially of ” precedes a list of ingredients in a composition claim or a series of steps in a process claim. By using the term “consisting essentially of,” the drafter signals that the invention necessarily includes the listed ingredients and is open to unlisted ingredients that do not materially affect the basic and novel properties of the invention. A “consisting essentially of ” claim occupies a middle ground between closed claims that are written in a “consisting of ” format and fully open claims that are drafted in a “comprising” format. See Ex parte Davis, 80 U.S.P.Q. (BNA) 448, 449–50 (Pat. Off. Bd. App. 1948); Manual of Patent Examining Procedure § 2111.03 (6th ed. 1997).311

In construing the scope of claims having the transitional phrase consisting essentially of, the definition of what “materially affect[s] the basic and novel

308. Crystal Semiconductor Corp. v. Tritech Microelectronics Int’l, 246 F.3d 1336, 1348 (Fed. Cir. 2001); Invitrogen Corp. v. Biocrest Mfg., L.P., 327 F.3d 1364, 1368 (Fed. Cir. 2003) (“The transition ‘comprising’ in a method claim indicates that the claim is open-ended and allows for additional steps.”). 309. Free Motion Fitness, Inc. v. Cybex Int’l, 423 F.3d 1343, 1347 (Fed. Cir. 2005). 310. Cias, Inc. v. Alliance Gaming Corp., 504 F.3d 1356, 1360 (Fed. Cir. 2007). 311. PPG Indus. v. Guardian Indus. Corp., 156 F.3d 1351, 1354 (Fed. Cir. 1998); Water Technologies Corp. v. Calco, Ltd., 850 F.2d 660, 666 (Fed. Cir. 1988) (“[T]he more limited phrase “consisting essentially of.” The latter does not, however, exclude the addition of another ingredient which does not materially affect the characteristics of the invention.”).


properties of the invention”312 must be determined based on the standard rules of claim construction. For example, in AK Steel, the Federal Circuit relied on the patent’s specification to construe what “materially affect[s] the basic and novel properties of the invention:” The phrase “consisting essentially of ” in a patent claim represents a middle ground between the open-ended term “comprising” and the closed-ended phrase “consisting of.” In view of the ambiguous nature of the phrase, it has long been understood to permit inclusion of components not listed in the claim, provided that they do not “materially affect the basic and novel properties of the invention.” PPG Indus. v. Guardian Indus. Corp., 156 F.3d 1351, 1354 (Fed. Cir. 1998); In re Janakirma-Rao, 50 C.C.P.A. 1312, 317 F.2d 951, 954, 1963 Dec. Comm’r Pat. 578 (CCPA 1963). Thus, the claim construction issue presented by the ’135 patent in this case is whether an amount of silicon in excess of 0.5% in the aluminum coating materially affects the basic and novel properties of the invention. To determine those properties, we need look no further than the patent specification. The specification clearly states that good wetting is the goal of the invention as well as what distinguishes it from the prior art. See ’135 patent, col. 2, ll. 66–68 (“It is a principal object of this invention to form hot dip aluminum coated ferritic chromium alloy steels having enhanced wetting by the coating metal.”). The specification also clearly states that Type 1 aluminum containing “about 10%” silicon contains too much silicon and does not achieve that goal, id. at col. 5, ll. 23–29, whereas Type 2 or nearly pure aluminum does and is therefore preferred, id. at col. 5, ll. 35–40. Furthermore, the specification draws a precise line between those two materials, demarking the exact percentage of silicon that the inventors considered to be too much silicon, when it states, “silicon contents in the coating metal should not exceed about 0.5% by weight.” Id. at col. 5, ll. 33–34. On the basis of that statement, we conclude that silicon in excess of 0.5% by weight would materially alter the basic and novel properties of the invention, and that the claims of the ’135 patent must therefore be interpreted to permit no more than 0.5% silicon by weight in the aluminum coating.313

3. Closed (Consisting of ) The transitional phrase consisting of is considered to be “closed” in that the claimed invention is nothing but the recited limitations. For example, the predecessor court to the Federal Circuit held that a claim using the transitional

312. PPG Indus., 156 F.3d at 1354. 313. AK Steel Corp. v. Sollac, 344 F.3d 1234, 1239–40 (Fed. Cir. 2003).

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phrase consisting of an alloy of silver and indium was “therefore drawn to an alloy of silver and indium without other elements.”314 In a more recent case, the Federal Circuit in Norian reiterated that ‘“consisting of ’ is a term of patent convention meaning that the claimed invention contains only what is expressly set forth in the claim. See Vehicular Techs. Corp. v. Titan Wheel Int’l, Inc., 212 F.3d 1377, 1382–83 (Fed. Cir. 2000).”315 In Norian, the court construed the following “consisting of ” claim: 8. A kit for preparing a calcium mineral, said kit consisting of: at least one calcium source and at least one phosphoric acid source free of uncombined water as dry ingredients; and a solution consisting of water and a sodium phosphate, where the concentration of said sodium phosphate in said water ranges from 0.01 to 2.0 M and said solution has a pH in the range of about 6 to 11.316

It held that ‘“consisting of ’ as used in claim 8 limits the kit to the claimed chemicals and no other chemicals; that is, the kit “consists of ” only the chemicals described as contained in the kit.317 However, the Federal Circuit was careful to point out that “while ‘consisting of ’ limits the claimed invention, it does not limit aspects unrelated to the invention. It is thus necessary to determine what is limited by the ‘consisting of ’ phrase.”318 In Norian, the accused infringing product had the exact chemical contents of “consisting of ” claim 8, and no other chemicals.319 However, the accused product also included a spatula.320 The district court held that while the exact chemical contents of claim 8 were in the accused product without any other chemicals being present, the spatula in the accused product meant the “kit cannot infringe as a matter of law.”321 However, the Federal Circuit reversed the district court, holding that there was infringement of claim 8 by the accused kit because: While the term “consisting of ” permits no other chemicals in the kit, a spatula is not part of the invention that is described. Cf. Mannesmann Demag Corp. v. Engineered Metal Prods., 793 F.2d 1279, 1282–83 (Fed. Cir. 1986) (“The presence

314. In re Gray, 53 F.2d 520, 521 (CCPA 1931). 315. Norian Corp. v. Stryker Corp., 363 F.3d 1321, 1321 (Fed. Cir. 2004); Cias, 504 F.3d at 1361 (“It is equally well understood in patent usage that ‘consisting of ’ is closed-ended and conveys limitation and exclusion.”). 316. Id. at 1321–32. 317. Id. at 1331. 318. Id. 319. Id. 320. Id. 321. Id.

Specific Rules of Claim Construction 109 of additional elements is irrelevant if all the claimed elements are present in the accused structure”).322

In addition, the Federal Circuit has held that “consisting of ” does not exclude “impurities that a person of ordinary skill in the relevant art would ordinarily associate with a [claimed] component.”323 In Conoco v. Energy & Envlt. Int’l, the court explained: Although “consisting of ” is a term of restriction, the restriction is not absolute. . . . [I]mpurities that a person of ordinary skill in the relevant art would ordinarily associate with a component on the “consisting of ” list do not exclude the accused product or process from infringement. . . . Thus, impurities normally associated with the component of a claimed invention are implicitly adopted by the ordinary meaning of the components themselves. See Phillips, 415 F.3d 1303 at 1312–13 (“The ordinary and customary meaning of a claim term is the meaning that the term would have to a person of ordinary skill in the art. . . .”).324

In a footnote the Conoco court indicated: We are not presented with the question of whether impurities not normally associated with a component would exclude the accused process from infringement; however, as in Norian Corp., the additional component must be related to the invention. 363 F.3d at 1331–32.325

a) Markush Claiming and Other Uses of Consisting of Within a Claim Limitation It is important to note the location of the phrase consisting of within a claim. As discussed above, when consisting of is used as a claim’s transitional phrase (i.e., is located between the claim’s preamble and body), it has the effect of “closing” the claim such that the claim covers only what is claimed and nothing more. For example, a claim to a composition which uses as a preamble the phrase “consisting of A, B, and C” would not be infringed by a composition having A, B, C, and D. However, if the term consisting of is used within the body of the claim in a claim limitation, the term “closes” only the limitation in which it is located.

322. 323. 324. 325.

Id. at 1332. Conoco, Inc. v. Energy & Envtl. Int’l, L.C., 460 F.3d 1349, 1360–61 (Fed. Cir. 2006). Id. at 1360. Id. at 1361 n.5.

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The most common use of this is in the form of Markush claiming. As explained by the Federal Circuit in Abbott Labs.: A Markush group is a listing of specified alternatives of a group in a patent claim, typically expressed in the form: a member selected from the group consisting of A, B, and C. Therefore, “if ‘wherein R is a material selected from the group consisting of A, B, C and D” is a proper limitation then ‘wherein R is A, B, C or D’ shall also be considered proper.” In re Harnisch, 631 F.2d 716, 724 (CCPA 1980) (containing an Appendix describing Patent Office practice); see Manual of Patent Examining Procedure (MPEP) § 2173.05(H) (8th ed. 2001); see also Robert C. Faber, Landis on Mechanics of Patent Claim Drafting, § 50, 5A, VI-5–6 (4th ed. 2002) (“A Markush group is a sort of homemade generic expression covering a group of two or more different materials (elements, radicals, compounds, etc.), mechanical elements, or process steps, any one of which would work in the combination claimed.”). It is well known that “members of the Markush group are . . . alternatively usable for the purposes of the invention.” In re Driscoll, 562 F.2d 1245, 1249 (CCPA, 1977). Moreover, “[a] Markush group, incorporated in a claim, should be ‘closed,’ i.e. it must be characterized with the transition phrase ‘consisting of,’ rather than ‘comprising’ or ‘including.’” Stephen A. Becker, Patent Applications Handbook § 2:17 (9th ed. 2000). Thus, “members of the Markush group are used singly.” See Meeting Held to Promote Uniform Practice In Chemical Divisions, 28 J. Pat. & Trademark Off. Soc’y 849, 852 (1946) (listing practices approved by the primary examiners of the USPTO’s chemical group).326

Importantly, when the phrase consisting of is used within the body of a claim (either as part of a Markush group or otherwise), the “closed” nature of the term applies only to the limitation in which the term is used and only to the items described by the term; it does not make the entire claim a “closed claim.” This was made clear by the Federal Circuit in Mannesmann in which it held: At the trial EMPCO denied literal infringement on two grounds. First, EMPCO argued that the phrase “consisting of ” in clause (a) of claim 1 is an exclusionary term that prevents infringement by EMPCO’s coils because they contain additional structures not set forth in claim 1, namely the slag-stopping and backbone bars. The district court correctly observed that the phrase “consisting of ” appears in clause (a), not the preamble of the claim, and thus limits only the element set forth in clause (a). The court correctly declined to read this usage of “consisting of ” as excluding all other elements from the claim as a whole. Referring to the patent’s prosecution history, the district court observed that “consisting of ” was added to clause (a) by Mannesmann during prosecution

326. Abbott Labs. v. Baxter Pharm. Prods., 334 F.3d 1274, 1280–1281 (Fed. Cir. 2003).

Practice Points in order to distinguish the claims from cited references disclosing composite wall structures partly containing cooling pipes, and that the phrase was limiting only to the extent that it required “at least one cooling pipe coil” forming a wall structure. Accordingly the court correctly rejected EMPCO’s argument that literal infringement was avoided merely by the addition of the slag-stopping and backbone bars to the cooling pipe coil. The court held that these bars did not detract from the coil’s structural integrity as a wall.327

VI. Practice Points A. Legally Competent Patent Opinions Must Properly Construe Claims A patent opinion based in any way on a patent’s claims must properly construe those claims in order to be legally competent. Thus, claim construction is necessary for virtually all evaluations and opinions of patents, including evaluations and opinions of infringement, noninfringement, validity, invalidity, enforceability, unenforceability, inventorship, and ownership. For example as discussed in Chapter 23 (legal competency of opinions), in order to rely on an opinion of noninfringement or invalidity to counter a charge of willful infringement based on recklessness, the opinion must properly construe the claims. The rare exceptions to this rule may include situations in which a patentee has agreed to the meaning of a patent’s claims (e.g., based on a previous claim construction, such as in a prior litigation), and opinions that do not depend on a patent’s claims, such as opinions solely related to a patent’s term.328

B. In Proper Claim Construction, the Meaning of All Claim Terms Must Be Construed Based on the Meaning of the Terms to One of Ordinary Skill in the Relevant Art in Light of the Intrinsic Evidence Proper claim construction requires interpreting the meaning of all claim terms based on their meaning to one of ordinary skill in the relevant art, in view of the intrinsic evidence. A patent’s intrinsic evidence consists of the claims,

327. Mannesmann Demag Corp. v. Engineered Metal Products Co., 793 F.2d 1279, 1282 (Fed. Cir. 1986). 328. However, care must be exercised even here. For example, a patent’s term might depend on whether a priority application supports the claimed subject matter. In such a case, claim construction would be required.

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specification, prosecution history, and any art cited in the specification or prosecution history.

C. Every Claim Term Must Be Construed Every claim term must be construed, even if only to reach the conclusion that it has its ordinary meaning in the relevant art.

D. Hierarchy of Intrinsic Evidence for Claim Construction There is an evidentiary hierarchy for claim construction. The language of the claims themselves is of paramount importance. The specification follows the claims in order of importance for claim construction. Finally, the patent’s prosecution history—and any art cited in the prosecution history or specification—follows the claims and specification in order of evidentiary importance in claim construction.

E. The Full Prosecution History Must Be Evaluated in Claim Construction Claim construction must be based on the complete prosecution history of a patent. A patent’s prosecution history includes the application that issued as the patent as well as all patent applications that are formally related to the patent and that address at least one claim term in common with the patent. Applications are formally related to the application that issued as the patent at issue if they are linked in any way by a continuation, divisional, or continuationin-part application. This includes priority “parent” and “grandparent” applications that are related linearly as priority applications to the application at issue. It also includes “child” and “grandchild” applications that are related linearly to and depend on the application at issue. This includes applications that are prosecuted after issuance of the subject patent. Formally related applications also include “sibling” and other applications that are related to the subject application through a common ancestor or child patent. It is very important that all relevant applications in a patent’s prosecution history be evaluated for claim construction. This includes, but is not limited to, applications prosecuted after issuance of the subject patent, including pending applications that are related to the patent at issue as direct decedents via a common patent application. However, U.S. patent applications that are completely unrelated formally to the application that issued as the subject patent (i.e., those in which there is no connection whatsoever between the applications and any formally related applications, and the subject application and any formally related

Practice Points

applications) are not part of the patent’s prosecution history and, thus, are extrinsic evidence. This is the case even if an unrelated application has the same inventors and claims a similar invention. Additionally, non-U.S. patent applications are never part of a U.S. patent’s prosecution history for purposes of claim construction. This includes even non-U.S. applications claimed as priority applications for the U.S. patent at issue. Careful attention must be paid to this issue to ensure that a patent’s complete prosecution history is reviewed for claim construction. As discussed in Chapter 23, claim construction based on an incomplete review of a patent’s prosecution history may jeopardize the legal sufficiency of any opinion based on such construction.

F. Express Definitions in the Specification An express definition of a claim term in a patent’s specification generally defines the term for claim construction. An exception would be if other evidence, such as the prosecution history, clearly indicates that the patentee intended a different definition.

G. Express Definitions and Representations in a Patent’s Prosecution History When a patentee expressly represents to the Patent Office during the prosecution history of a patent that a claim term has a specific meaning, that meaning generally controls for claim construction. Express representations of the definition of claim terms may be made under many different circumstances in a patent’s prosecution history. For example, a patentee may expressly define a claim term in order to overcome prior art or other rejections.

H. A Patentee May Be His Own Lexicographer A patentee may define claim terms to have any meaning that the patentee desires. Hence, there is no prohibition against a patentee defining claim terms to have something other than their ordinary meaning. However, a meaning different from a claim term’s ordinary meaning to one of ordinary skill in the art must be clear from the intrinsic evidence.

I. Disclaimer and Disavowal in a Patent’s Prosecution History A patent’s prosecution history may also define a claim term by express or implied disclaimer or disavowal. For example, during prosecution a patentee

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may define claim terms by expressly representing to the Patent Office that specific claim terms do not cover certain subject matter. This commonly occurs when a patentee is attempting to overcome prior art or other rejections. Additionally, a patentee may define claim terms by impliedly disclaiming or disavowing claim scope, for example by clearly representing to the patent office during prosecution that the claims do not cover certain subject matter.

J. Know and Use the Rules for Extrinsic Evidence in Claim Construction Extrinsic evidence for claim construction is all evidence that is not intrinsic evidence. Extrinsic evidence may be used at any time in claim construction to assist in determining the meaning of claim terms based on the intrinsic evidence. For example, extrinsic evidence such as dictionary definitions may be used to inform the meaning of claim terms to one of ordinary skill in the art. However, in such an event the final construction of claim terms is determined from the dictionary meaning read in light of the intrinsic evidence. Extrinsic evidence may never be used to support a claim construction that is at odds with an unambiguous construction based on the intrinsic evidence. Further, extrinsic evidence may only be relied upon to construe claims (as opposed to assisting in construing claims) when a clear meaning for the claims cannot be determined from the intrinsic evidence alone.

K. Be Aware of and Apply Specific Rules of Claim Construction As discussed in this chapter, there are a number of specific rules for claim construction. Further, this chapter’s discussion is not an exhaustive list of these specific rules. Thus, when construing claims, one should always aware of and research the possibility of special rules that might affect claim construction. Further, with some exceptions,329 most specific rules for claim construction can be overcome where clear intrinsic evidence indicates a meaning contrary to what may be suggested by the rule. Specific rules for claim construction include, but are not limited to: (a) avoiding importing limitations from the specification into the claims when there is no support for the limitations in the claim terms; (b) avoiding construing claims to exclude the preferred embodiment of the specification;

329. Specific rules for construing means-plus-function claims and product-by-process claims cannot be overcome by other intrinsic evidence (unless the evidence shows that the claims are not, in fact, means-plus-function or product-by-process claims).

Practice Points

(c) maintaining the importance of internal consistency of claim terms within the claims, specification, and prosecution history; (d) noting the doctrine of claim differentiation under which the meaning and scope of different claims in a patent is presumed to differ; (e) ascertaining when a claim’s preamble may be a limitation; (f) construing claims to be valid, but only when such construction is consistent with the intrinsic evidence; and (g) noting the meaning of certain transitional phrases in claims. Additionally, specific rules apply to construing means-plus-function claims and product-by-process claims. Unlike other specific rules of claim construction, these rules cannot be overcome by contrary intrinsic evidence unless the evidence shows that the claims are not, in fact, means-plus-function or product-by-process claims.

L. Up-to-Date Law of Claim Construction Must Be Included in Opinions As discussed in Chapter 23 (legal competency of patent opinions), opinions involving claim construction must include a discussion of the law of claim construction as it exists at the time of the opinion. Further, claim construction must be based on a clear application of this law to the facts in the intrinsic evidence (and extrinsic evidence if relevant and permissible).

M. Literal Claim Scope May Differ from Claim Scope under the Doctrine of Equivalents Claim construction determines the literal scope of a patent’s claims. Therefore, an evaluation of literal infringement involves a comparison of the construed claims with a potentially infringing product or process (see Chapter 3). However, the scope of a patent’s claims for purposes of infringement under the doctrine of equivalents may be different from the literal scope of the claims. Chapter 4 discusses determination of the scope of claims for purposes of infringement under the doctrine of equivalents.

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CHAP T ER

3 Patent Law Principle II: Infringement Literal Infringement

I. The Patent Infringement Statute: 35 U.S.C. § 271 II. Direct Infringement

119 119

A. Other Subsections of 35 U.S.C. 271 III. Literal Infringement and Infringement under the Doctrine of Equivalents

120 120

A. Literal Infringement

120

B. The Doctrine of Equivalents

121

IV. Determining Literal Infringement

121

A. Step One: Claim Construction

122

1. Must Compare the Objectively Construed Claims with the Potentially Infringing Product or Process

122

B. Step Two: Comparison of the Construed Claims with the Accused Product or Process

122

1. For Literal Infringement to Be Found, Every Claim Limitation Must Literally Be in the Infringing Product or Process

123

2. A Question of Fact

123

3. A Preponderance of the Evidence

123

C. The Effect of Additional Elements in the Potentially Infringing Product or Process 1. Infringement of Open-Ended Claims (Comprising)

123 124

2. Infringement of Partially Open-Ended Claims (Consisting Essentially of )

124

3. Infringement of Closed Claims (Consisting of )

125

D. Dependent Claims

127

E. Infringement of One Claim of a Patent is Infringement of the Patent

128

117

118

Chapter 3 Patent Law Principle II: Infringement V. Specific Rules of Literal Infringement

129

A. Means-Plus-Function Claim Terms

129

1. Definition of a Means-Plus-Function Claim

130

2. Construing Means-Plus-Function Claims for Literal Infringement

130

a) Function b) Structure B. Product-by-Process Claims

131 131 134

1. Construing Product-By-Process Claims for Validity

135

2. Construing Product-by-Process Claims for Literal Infringement

135

a) History of Product-By-Process Claims in the Federal Circuit

135

b) Basis of the Abbott Court’s En Banc Holding

139

c) Scripps Is Expressly Overruled

140

d) The Holding of Abbott Applies to All Types of Product-By-Process Claims

140

C. “Practicing the Prior Art” VI. Practice Points

141 142

A. As the First Step, Always Objectively Construe the Patent’s Claims

142

B. Always Compare the Objectively Construed Claim with the Potentially Infringing Product or Process

142

C. For Evaluations and Opinions, It is Essential to Understand the Potentially Infringing Product or Process

143

D. Role of the Doctrine of Equivalents

143

E. Be Aware of Non-Direct Infringement, Activities Abroad, and Infringement Exemptions

143

F. Be Aware of Special Claiming Issues Such as Means-Plus-Function and Product-by-Product Claims

143

Direct Infringement 119

Usage Note: This chapter covers direct literal infringement. Chapter 2 covers claim construction for literal infringement. Chapter 4 covers infringement under the doctrine of equivalents. Chapter 5 covers non-direct infringement (inducement and contributory infringement), joint/divided infringement, experimental use, and implied license. Further, following the lead of the Federal Circuit, this book especially for infringement determinations uses the term limitations to refer to claims and the term elements to refer to potentially infringing products or processes.1 For example, an infringing product or process has “elements” corresponding to every “limitation” of the infringed claim. However, some older cases occasionally refer to claim “elements” when discussing claim “limitations.”

I. The Patent Infringement Statute: 35 U.S.C. § 271 Patent infringement is codified in 35 U.S.C. § 271,2 which as explained below covers several different types of acts that infringe a patent; it also provides certain exemptions to infringement.

II. Direct Infringement Direct infringement occurs when a person or legal entity performs an act that falls within Section 271(a) of Title 35, which provides: Except as otherwise provided in this title [35 U.S.C. §§ 1 et seq.], whoever without authority makes, uses, offers to sell, or sells any patented invention, within the United States or imports into the United States any patented invention during the term of the patent therefore, infringes the patent.3

1. E.g., Festo Corp. v. Shoketsu Kinzoku Kogyo Kabushiki Co., 234 F.3d 558, 564 n.1 (Fed. Cir. 2000) (“It is preferable to use the term ‘limitation’ when referring to claim language and the term ‘element’ when referring to the accused device.”); Lockheed Martin Corp. v. Space Systems/Loral, Inc., 249 F.3d 1314, 1321 n.1 (Fed. Cir. 2001). 2. 35 U.S.C.S. § 271 (2009). 3. 35 U.S.C.S. § 271(a) (2009).

120

Chapter 3 Patent Law Principle II: Infringement

A. Other Subsections of 35 U.S.C. 271 As shown above and discussed in detail below, Section 271(a) statutorily defines direct patent infringement. Infringement liability may also arise when a person or entity does not itself perform an infringing act, but induces another to infringe or contributes to infringement by another. Subsections 271(b)4 and (c)5 address such vicarious infringement liability with Chapter 5 discussing these types of infringement in detail. Additionally, other subsections of Section 271 cover issues such as infringing acts occurring outside the United States6 and certain exemptions to infringement, such as experimental use.7 Chapter 5 also addresses these issues in detail.

III. Literal Infringement and Infringement under the Doctrine of Equivalents Generally, infringement occurs when “every claim limitation or its equivalent [is] found in the accused device [or process].”8 Therefore, there are two ways to infringe a patent’s claims: literally or equivalently. This chapter focuses only on literal infringement; Chapter 4 addresses infringement under the doctrine of equivalents.

A. Literal Infringement “Literal infringement requires that the accused device embody every element of the claim.”9 For a finding of literally infringement, the Supreme Court and the Federal Circuit require that an accused product or process have an element that corresponds exactly (literally) with every claim limitation as that limitation is properly construed (for claim construction, see Chapter 2).10

4. 5. 6. 7. 8.

35 U.S.C.S. § 271(b) (2009) (inducement of infringement, see Chapter 5). 35 U.S.C.S. § 271(c) (2009) (contributory infringement, see Chapter 5). 35 U.S.C.S. §§ 271(f) and 271(g) (2009) (see Chapter 5). 35 U.S.C.S. § 271(e) (2009) (see Chapter 5). Warner-Lambert Co. v. Purepac Pharm. Co. (In re Gabapentin Patent Litig.), 503 F.3d 1254, 1259 (Fed. Cir. 2007); Warner-Jenkinson Co. v. Hilton Davis Chem. Co., 520 U.S. 17, 29 (1997). 9. Builders Concrete, Inc. v. Bremerton Concrete Prods. Co., 757 F.2d 255, 257 (Fed. Cir. 1985) (emphasis added). 10. E.g., Allen Eng’g Corp. v. Bartell Indus., 299 F.3d 1336, 1345 (Fed. Cir. 2002); Baxter Healthcare Corp. v. Spectramed, Inc., 49 F.3d 1575, 1583 (Fed. Cir. 1995).

Determining Literal Infringement

As stated by the Federal Circuit in Allen Engineering, “[l]iteral infringement of a claim exists when each of the claim limitations ‘reads on,’ or in other words is found in, the accused device.”11

B. The Doctrine of Equivalents U.S. patent law has long recognized that limiting infringement only to literal infringement would unduly restrict the rights of the patent owner. As explained by the U.S. Supreme Court in its landmark Festo case: The language in the patent claims may not capture every nuance of the invention or describe with complete precision the range of its novelty. If patents were always interpreted by their literal terms, their value would be greatly diminished. Unimportant and insubstantial substitutes for certain elements could defeat the patent, and its value to inventors could be destroyed by simple acts of copying. . . . The scope of a patent is not limited to its literal terms but instead embraces all equivalents to the claims described.12

For this reason, courts recognize infringement under the doctrine of equivalents. “Even if one or more of the claim limitations are not literally present in the accused device, thus precluding a finding of literal infringement, the claim may still be held infringed if equivalents of those limitations are present”13 (see Chapter 4 for evaluating and opining on infringement under the doctrine of equivalents).

IV. Determining Literal Infringement The Federal Circuit has long held that a determination of infringement requires a two-step analysis. “First, the court determines the scope and meaning of the patent claims asserted. . . . [Second,] the properly construed claims are compared to the allegedly infringing device.”14

11. 12. 13. 14.

Allen Eng’g, 299 F.3d at 1345. Festo Corp. v. Shoketsu Kinzoku Kogyo Kabushiki Co., 535 U.S. 722, 731–732 (U.S. 2002). Allen Eng’g, 299 F.3d at 1345. Cybor Corp. v. FAS Techs., Inc., 138 F.3d 1448, 1454 (Fed. Cir. 1998) (en banc) (citations omitted); Warner-Lambert Co. v. Purepac Pharm. Co. (In re Gabapentin Patent Litig.), 503 F.3d 1254, 1259 (Fed. Cir. 2007); Becton Dickinson & Co. v. C.R. Bard, Inc., 922 F.2d 792, 796 (Fed. Cir. 1990).

121

122


A. Step One: Claim Construction It is undisputed that the first step in any infringement evaluation or opinion is always claim construction,15 which is covered in Chapter 2. The importance of claim construction in patent law cannot be overstated. Indeed, it is simply not possible to perform a proper infringement evaluation or render an opinion without first construing the claims of a patent.16 1. Must Compare the Objectively Construed Claims with the Potentially Infringing Product or Process The Federal Circuit has long cautioned that infringement is to be determined after first objectively construing the claims irrespective of the potentially infringing activity, then comparing the objectively construed claims with the potentially infringing product or process.17 This helps prevent improper comparisons of a patent’s preferred embodiments (or of the patent owners’ commercial embodiments) instead of the construed claims with the accused activity in determining infringement. The Federal Circuit has repeatedly held that such comparisons are legal error. For example: Infringement is determined on the basis of the claims, not on the basis of a comparison with the patentee’s commercial embodiment of the claimed invention; and,18 [s]pecifications teach. Claims claim. . . . That a specification describes only one embodiment does not require that each claim be limited to that one embodiment.19

B. Step Two: Comparison of the Construed Claims with the Accused Product or Process After a patent’s claims are properly construed, the next step in any patent infringement evaluation or opinion is a comparison of the construed claims to the potentially infringing device or process.20

15. E.g., Cybor, 138 F.3d at 1454; Gabapentin Patent Litig., 503 F.3d at 1259; Becton Dickinson, 922 F.2d at 796. 16. E.g., Cybor, 138 F.3d at 1454; Gabapentin Patent Litig., 503 F.3d at 1259; Becton Dickinson, 922 F.2d at 796. 17. E.g., Cybor., 138 F.3d at 1454. 18. ACS Hosp. Sys., Inc. v. Montefiore Hosp., 732 F.2d 1572, 1578 (Fed. Cir. 1984); Int’l Visual Corp. v. Crown Metal Mfg. Co., 991 F.2d 768, 772 (Fed. Cir. 1993). 19. Sri Int’l v. Matsushita Elec. Corp., 775 F.2d 1107, 1121 n.14 (Fed. Cir. 1985) (en banc); Enercon GmbH v. ITC, 151 F.3d 1376, 1384 (Fed. Cir. 1998). 20. Cybor, 138 F.3d at 1454 (citations omitted); Gabapentin Patent Litig., 503 F.3d at 1259; Becton Dickinson, 922 F.2d at 796.


1. For Literal Infringement to Be Found, Every Claim Limitation Must Literally Be in the Infringing Product or Process A determination of “[l]iteral infringement requires that the accused device [literally] embody every element of the claim.”21 Phrased another way, literal infringement exists when each of the claim limitations literally “reads on”—or in other words is literally in—the accused device or method.22 As a rule, “[t]o prove literal infringement, the patentee must show that the accused device contains every limitation in the asserted claims. If even one limitation is missing or not met as claimed, there is no literal infringement.”23 However, as covered in Chapter 4, “if one or more of the claim limitations are not literally present in the accused device, thus precluding a finding of literal infringement, the claim may still be held infringed if equivalents of those limitations are present.”24 2. A Question of Fact Literal infringement is a question of fact, to be decided by the fact finder.25 3. A Preponderance of the Evidence “The plaintiff has the burden of proving infringement by a preponderance of the evidence.”26

C. The Effect of Additional Elements in the Potentially Infringing Product or Process Usage Note: Please see Chapter 2, Claim Construction, Section [V][J] for a detailed discussion of transitional phrases, including how to determine whether a claim is “open-ended,” “partially open-ended,” or “closed.”

21. Builders Concrete, Inc. v. Bremerton Concrete Prods. Co., 757 F.2d 255, 257 (Fed. Cir. 1985) (emphasis added). 22. E.g., Franks Casing Crew & Rental Tools, Inc. v. Weatherford Int’l, Inc., 389 F.3d 1370, 1378 (Fed. Cir. 2004); Baxter Healthcare Corp. v. Spectramed, Inc., 49 F.3d 1575, 1583 (Fed. Cir. 1995); Amhil Enters. Ltd. v. Wawa, Inc., 81 F.3d 1554, 1562 (Fed. Cir. 1996). 23. Mas-Hamilton Group v. LaGard, Inc., 156 F.3d 1206, 1211 (Fed. Cir. 1998) (citations omitted, emphasis added); Riles v. Shell Exploration & Prod. Co., 298 F.3d 1302, 1308 (Fed. Cir. 2002). 24. Allen Eng’g Corp. v. Bartell Indus., 299 F.3d 1336, 1345 (Fed. Cir. 2002) (citing WarnerJenkinson Co. v. Hilton Davis Chem. Co., 520 U.S. 17, 24 (1997)). 25. Bai v. L & L Wings, Inc., 160 F.3d 1350, 1353 (Fed. Cir. 1998); Gabapentin Patent Litig., 503 F.3d at 1259. 26. Kegel Co. v. AMF Bowling, 127 F.3d 1420, 1425 (Fed. Cir. 1997); Laitram Corp. v. Rexnord, Inc., 939 F.2d 1533, 1535 (Fed. Cir. 1991).

123

124


As discussed in Chapter 2, Section [V][J], part of the process of claim construction is determining whether a claim is “open-ended,” “partially openended,” or “closed.” As discussed below, this can have a great impact on the scope of a claim because the “openness” of a claim determines whether an accused product or process having elements in addition to the claimed limitations will infringe the claim. As a general rule, claims having the transitional phrase comprising are presumed to be open-ended, claims having the transitional phrase consisting essentially of are presumed to be partially open-ended, and claims having the transitional phrase consisting of are construed to be closed. 1. Infringement of Open-Ended Claims (Comprising) Most claims are open-ended, typically using the term comprising as their transitional phrase. As explained in Section [V][J][1] of Chapter 2, a claim with comprising as its transitional phrase is presumed to be open-ended.27 In terms of claim scope, open-ended claims are the broadest possible. An open-ended claim will be infringed by any product or process that has elements corresponding to each claim limitation, and, importantly, “[t]he addition of unclaimed elements does not typically defeat infringement when a patent uses an open transitional phrase such as ‘comprising.’”28 For example, a chair having four legs would literally infringe an open-ended claim to “a chair comprising three legs,” because as to an open-ended claim, the additional leg would have no effect on infringement. As a example for an open-ended process claim, a process having the steps A, B, C, and D, would infringe an openended claim comprising the steps A, B, and C. 2. Infringement of Partially Open-Ended Claims (Consisting Essentially of ) Less common and more restricted in scope are partially open-ended claims, which typically use the consisting essentially of as their transitional phrase. As explained in Section [V][J][2] of Chapter 2, a claim with consisting essentially of as its transitional phrase is presumed to be partially open-ended.29 Infringement of a partially open-ended claim occurs only if a product or process includes elements corresponding to the claim’s limitations and does not contain anything in addition that would “materially affect the

27. E.g., Gillette Co. v. Energizer Holdings, Inc., 405 F.3d 1367, 1371 (Fed. Cir. 2005). 28. Free Motion Fitness, Inc. v. Cybex Int’l, 423 F.3d 1343, 1347 (Fed. Cir. 2005) (emphasis added). 29. E.g., PPG Indus. v. Guardian Indus. Corp., 156 F.3d 1351, 1354 (Fed. Cir. 1998).


basic and novel properties of the invention.”30 The determination as to what would “materially affect the basic and novel properties of the invention” is an issue of claim construction, which is governed by the general rules of claim construction set forth in Chapter 2.31 For example, a chemical compound having 1% chromium, 10% iron, and 2% aluminum would only infringe a partially open-ended claim to “a compound consisting essentially of 1% chromium and 10% iron” if the additional 2% aluminum did not materially affect the basic and novel properties of the claimed invention (i.e., a compound of 1% chromium and 10% iron). Similarly, a process having the steps A, B, C, and D would only infringe a partially open-ended claim to “a process consisting essentially of steps A, B, and C” if the additional step D did not materially affect the basic and novel properties of the claimed invention (i.e., a process of steps A, B, and C). 3. Infringement of Closed Claims (Consisting of ) Perhaps the least common (and certainly the most restricted scope of claims) are “closed claims,” which typically use consisting of as their transitional phrase. As explained in Section [V][J][3] of Chapter 2, a claim with consisting of as its transitional phrase is presumed to be closed.32 Infringement of closed claims occurs only by products or processes that include only elements corresponding to the claims’ limitations (and any impurities normally associated therewith), and not including anything in addition to the claims’ limitations.33 As stated by the Federal Circuit: “‘Consisting of ’ is a term of patent convention meaning that the claimed invention contains only what is expressly set forth in the claim.”34 For example, the predecessor court to the Federal Circuit held in In re Gray that a claim using the transitional phrase “consisting of ” to claim a composition having an alloy of silver and indium was “therefore drawn to an alloy of silver and indium without other elements.”35

30. PPG Indus., 156 F.3d at 1354 (emphasis added); Water Tech. Corp. v. Calco, Ltd., 850 F.2d 660, 666 (Fed. Cir. 1988) (“[T]he more limited phrase ‘consisting essentially of.’ The latter does not, however, exclude the addition of another ingredient which does not materially affect the characteristics of the invention.”). 31. E.g., AK Steel Corp. v. Sollac, 344 F.3d 1234, 1239–1240 (Fed. Cir. 2003). 32. E.g., PPG, 156 F.3d at 1354. 33. E.g., Norian Corp. v. Stryker Corp., 363 F.3d 1321, 1321 (Fed. Cir. 2004); Vehicular Techs. Corp. v. Titan Wheel Int’l, Inc., 212 F.3d 1377, 1382–83 (Fed. Cir. 2000). 34. Norian Corp., 363 F.3d at 1321 (emphasis added). 35. In re Gray, 53 F.2d 520, 521 (CCPA 1931).

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In Norian, the Federal Circuit construed the following “consisting of ” claim: 8. A kit for preparing a calcium mineral, said kit consisting of: at least one calcium source and at least one phosphoric acid source free of uncombined water as dry ingredients; and a solution consisting of water and a sodium phosphate, where the concentration of said sodium phosphate in said water ranges from 0.01 to 2.0 M and said solution has a pH in the range of about 6 to 11.36

Following earlier cases such as In re Gray, the Federal Circuit held: “ ‘Consisting of ’ as used in claim 8 limits the kit to the claimed chemicals and no other chemicals; that is, the kit ‘consists of ’ only the chemicals described as contained in the kit.”37 However, the Federal Circuit was careful to point out that “while ‘consisting of ’ limits the claimed invention, it does not limit aspects unrelated to the claimed invention. Therefore, in determining infringement of a closed claim, it may be necessary to determine what the ‘consisting of ’ phrase limits.”38 In Norian, the accused infringing product had the exact chemical contents of “consisting of ” claim 8, and no other chemicals,39 but the accused product also included a spatula.40 The district court held that while the exact chemical contents of claim 8 were in the accused product with no other chemicals being present, because of the presence of the spatula in the accused product, the “kit cannot infringe as a matter of law.”41 However, the Federal Circuit reversed the district court, holding that there was infringement of claim 8 by the accused kit because: While the term “consisting of ” permits no other chemicals in the kit, a spatula is not part of the invention that is described. Cf. Mannesmann Demag Corp. v. Engineered Metal Prods., 793 F.2d 1279, 1282–83 (Fed. Cir. 1986) (“The presence of additional elements is irrelevant if all the claimed elements are present in the accused structure”).42

Additionally, the Federal Circuit has held that “consisting of ” does not exclude “impurities that a person of ordinary skill in the relevant art would

36. 37. 38. 39. 40. 41. 42.

Norian Corp., 363 F.3d at 1321–32. Id. at 1331. Id. Id. Id. Id. Id. at 1332.


ordinarily associate with a [claimed] component.”43 In Conoco v. Energy & Environmental, the court explained: Although “consisting of ” is a term of restriction, the restriction is not absolute. . . . [I]mpurities that a person of ordinary skill in the relevant art would ordinarily associate with a component on the “consisting of ” list do not exclude the accused product or process from infringement. . . . Thus, impurities normally associated with the component of a claimed invention are implicitly adopted by the ordinary meaning of the components themselves. See Phillips, 415 F.3d 1303 at 1312–13 (“The ordinary and customary meaning of a claim term is the meaning that the term would have to a person of ordinary skill in the art. . . .”).44

In a footnote the Conoco court remarked: We are not presented with the question of whether impurities not normally associated with a component would exclude the accused process from infringement; however, as in Norian Corp., the additional component must be related to the invention. 363 F.3d at 1331–32.45

Therefore, a closed claim to “a compound consisting of an alloy of silver, indium” would only be infringed by a compound having only an alloy of silver and indium and any impurities normally associated with such an alloy. A compound containing an alloy of silver, indium, and aluminum would not infringe, unless aluminum was an impurity normally associated with an alloy of silver and indium. Similarly, a closed claim to “a process consisting of the steps of A, B, and C” would only be infringed by a process having the steps A, B, and C, and would not be infringed by a process having the steps A, B, C, and D.

D. Dependent Claims There are generally two types of claims in a patent: independent and dependent. Independent claims are, quite literally, independent; they set forth the complete metes and bounds of the claimed subject matter within the single sentence of the claim. Dependent claims are provided for in 35 U.S.C. § 112, Paragraph 4: A claim in dependent form shall contain a reference to a claim previously set forth and then specify a further limitation of the subject matter claimed.

43. Conoco, Inc. v. Energy & Envtl. Int’l, L.C., 460 F.3d 1349, 1360–1361 (Fed. Cir. 2006). 44. Id. 45. Id. at 1361 n.5 (emphasis in original).

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Chapter 3 Patent Law Principle II: Infringement A claim in dependent form shall be construed to incorporate by reference all the limitations of the claim to which it refers.46

The Federal Circuit has long held that a dependent claim cannot be infringed if the claim from which it depends is not infringed.47 This must necessarily be so because (as discussed in Section [III] above) a determination of infringement requires that every claim limitation or its equivalent be found in the accused product or process.48 As a dependent claim incorporates every limitation of the claim from which it depends, if that claim is not infringed, the dependent claim cannot be infringed. This is because if the claim from which it depends is not infringed, the accused product or process is missing at least one limitation of that claim. Therefore, at least one limitation of the dependent claim is necessarily missing because the dependent claim includes all the limitations of the claim from which it depends. The Federal Circuit summed this up as follows: “It is axiomatic that dependent claims cannot be found infringed unless the claims from which they depend have been found to have been infringed[.]”49 The court further explained: One may infringe an independent claim and not infringe a claim dependent on that claim. The reverse is not true. One who does not infringe an independent claim cannot infringe a claim dependent on (and thus containing all the limitations of) that claim.50

E. Infringement of One Claim of a Patent is Infringement of the Patent Infringement of a patent occurs when at least one claim is infringed.51 Liability for patent infringement, including damages, is the same whether

46. 35 U.S.C.S. § 112, P 4 (2009); Monsanto Co. v. Syngenta Seeds, Inc., 503 F.3d 1352, 1359 (Fed. Cir. 2007) (“According to § 112, P 4, claims in dependent form include all the limitations of the claim incorporated by reference into the dependent claim.”). 47. E.g., Wahpeton Canvas Co. v. Frontier, Inc., 870 F.2d 1546, 1553 (Fed. Cir. 1989); Monsanto, 503 F.3d at 1359; Jeneric/Pentron Inc. v. Dillon Co., 205 F.3d 1377, 1383 (Fed. Cir. 2000). 48. E.g., Warner-Jenkinson Co. v. Hilton Davis Chem. Co., 520 U.S. 17, 29 (1997); Warner-Lambert Co. v. Purepac Pharm. Co. (In re Gabapentin Patent Litig.), 503 F.3d 1254, 1259; Becton Dickinson & Co. v. C.R. Bard, Inc., 922 F.2d 792, 796 (Fed. Cir. 1990). 49. Wahpeton, 870 F.2d at 1553; Monsanto, 503 F.3d at 1359; Jeneric., 205 F.3d at 1383. 50. Wahpeton, 870 F.2d at 1552 n.9; Monsanto, 503 F.3d at 1359; Jeneric., 205 F.3d at 1383. 51. E.g., Panduit Corp. v. Dennison Mfg. Co., 836 F.2d 1329, 1330 n.1 (Fed. Cir. 1987) (“One is liable for patent infringement if one claim be infringed.”).

Specific Rules of Literal Infringement 129

only one claim or a plethora are infringed. As stated by the Federal Circuit in Wahpenton: Because a reversal on appeal on one independent claim would give Wahpeton all it needs for victory, submission of the infringement issue on a plethora of dependent claims in Wahpeton’s motion and appeal is difficult to understand. Infringement of an independent claim would result in the same damage award as would infringement of all claims dependent thereon. . . .52

V. Specific Rules of Literal Infringement In addition to the general law for determining infringement discussed above, there are several specific rules for doing so that apply in certain fact situations. Many of these are discussed below.

A. Means-Plus-Function Claim Terms Usage Note: Chapter 2, Section V[F] discusses the construction of meansplus-function claims in detail. The following section discusses only meansplus-function claims as they relate to literal infringement. Therefore, the reader interested in more information on means-plus-function claims should refer to Chapter 2, Section V[F]. Means-plus-function claim terms present an interesting—and unique— exception to the general rules regarding literal infringement and infringement by equivalents (discussed in Chapter 4). Means-plus-function claims are statutorily defined53 claims that are perhaps the only exception54 to the general rule under which equivalents of the construed subject matter are not considered for literal infringement. As discussed above, for all claims other than

52. Wahpeton, 870 F.2d at 1553 n.10 (emphasis added). 53. 35 U.S.C.S. § 112, P 6 (2009). 54. Although there is one rather unusual Federal Circuit case in which the Federal Circuit construes the literal scope of a claim to “about 30 μm” to include “functional equivalents” within the literal construction of the claim for literal infringement. The court then held that the patentees were not entitled to the doctrine of equivalents because: “The ‘about 30 μm’ limitation already literally encompasses diameters that are equivalent to 30 μm in the context of the patent, any particle diameter that performs the same function, in the same way, with the same result as a 30 μm diameter is already within the literal scope of the claim.” Cohesive Techs., Inc. v. Waters Corp., 543 F.3d 1351, 1372 (Fed. Cir. 2008). However, other than meansplus-function claims, this appears to be the only Federal Circuit case to construe the literal scope of claims to include functional equivalents.

130 Chapter 3 Patent Law Principle II: Infringement

means-plus-function claims,55 a claim is literally infringed only where an accused product or process literally includes every limitation of the claim. Any deviation in an accused product or process from the literal scope of the claim precludes literal infringement, and infringement, if any, must fall under the doctrine of equivalents. As stated by the Federal Circuit in referring to 35 U.S.C. Section 112, Paragraph 6: Literal infringement of a § 112, P6 limitation requires that the relevant structure in the accused device perform the identical function recited in the claim and be identical or equivalent to the corresponding structure in the specification.56

1. Definition of a Means-Plus-Function Claim Means-plus-function claims57 are those that do not expressly recite a specific structure or material for accomplishing a specified function. Rather, they are typically written as claiming “a means for” accomplishing a specified function. A typical means-plus-function claim is shown below: Claim 11. A saw for cutting concrete . . . comprising: . . . means connected to the saw for supporting the surface of the concrete adjacent the leading edge of the cutting blade to inhibit chipping, spalling, or cracking of the concrete surface during cutting. . . .58

2. Construing Means-Plus-Function Claims for Literal Infringement The construction of a means-plus-function claim limitation proceeds according to 35 U.S.C. Section 112, Paragraph 6, which has codified meansplus-function claims and states: An element in a claim for a combination may be expressed as a means or step for performing a specified function without the recitation of structure, material, or acts in support thereof, and such claim shall be construed to cover

55. Id. 56. Odetics, Inc. v. Storage Tech. Corp., 185 F.3d 1259, 1267 (Fed. Cir. 1999) (emphasis added); Frank’s Casing Crew & Rental Tools, Inc. v. Weatherford Int’l Inc., 389 F.3d 1370, 1378 (Fed. Cir. 2004). 57. There are also step-plus-function claims, which are construed in the same was as meansplus-function claims, except that instead of the specification providing “means for” accomplishing a specified function, the specification provides “acts for” accomplishing a specified function. 58. Chiuminatta Concrete Concepts, Inc. v. Cardinal Indus. Inc., 145 F.3d 1303, 1305–06 (Fed. Cir. 1998) (emphasis added).

Specific Rules of Literal Infringement 131 the corresponding structure, material, or acts described in the specification and equivalents thereof.59

Therefore, claim construction for a means-plus-function limitation requires the determination of both the claimed function and structure. As the Federal Circuit explained in Omega Engineering: First, we must identify the claimed function, staying true to the claim language and the limitations expressly recited in the claims. Once the functions performed by the claimed means are identified, we must then ascertain the corresponding structures in the written description that perform those functions.60

a) Function The function of a means-plus-function claim is construed in the same manner that any claim term is construed.61 Infringement of the function aspect of a means-plus-function term also follows the same rules as for all claims: An accused device must perform literally the same function as that of the construed claim.62 As explained by the Federal Circuit, literal infringement of a meansplus-function claim requires at least that the claimed—and accused—functions be identical: An infringement analysis under section 112, paragraph 6, “begins with determining whether the accused device or method performs an identical function to the one recited in the claim.” IMS Tech., Inc. v. Haas Automation, Inc. 206 F.3d 1422, 1430 (Fed. Cir. 2000) (citing Mas-Hamilton Group v. LaGard, Inc., 156 F.3d 1206, 1211–12 (Fed. Cir. 1998)). “If the identical function is performed, the next step is to determine whether the accused device uses the same structure . . . found in the specification, or [its] equivalents.” Id.63

b) Structure It is in the construction of the structure for literal infringement in which means-plus-function claims differ from all other U.S. patent claims. As discussed in Section V[F][b] of Chapter 2, in accordance with Section 112, Paragraph 6, construction of the structure aspect of a means-plus-function

59. 35 U.S.C.S. § 112, P 6 (2009) (emphasis added); In re Donaldson Co., 16 F.3d 1189, 1193–94 (Fed. Cir. 1994) (en banc). 60. Omega Eng’g, Inc. v. Raytek Corp., 334 F.3d 1314, 1322 (Fed. Cir. 2003) (citations omitted). 61. E.g., Omega Eng’g, 334 F.3d at 1322. 62. E.g., Utah Med. Prods., Inc. v. Graphic Controls Corp., 350 F.3d 1376, 1383 (Fed. Cir. 2003). 63. Id.

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claim includes: (a) the exact structure(s) in the specification that are clearly linked or associated with the claimed function; and (b) “equivalents thereof ” as determined by equivalency under Section 112, Paragraph 6.64 Therefore, determining literal infringement of a means-plus-function claim requires an equivalency analysis.65 Determining equivalency under Section 112, Paragraph 6 is similar but not identical to an equivalence analysis under the doctrine of equivalents (see Chapter 4).66 This equivalence analysis takes into consideration whether there is an “insubstantial” difference from the claimed structure and the allegedly equivalent structure.67 In addition, equivalents under Section 112, Paragraph 6 must have existed at the time the patent issued.68 Therefore, only structures existing at the time of issuance of a patent may literally infringe a means-plusfunction claim.69 Structures arising after the issuance cannot literally infringe a means-plus-function claim, but might infringe such a claim under the doctrine of equivalents.70 As explained by the Federal Circuit: One important difference between § 112, P 6 and the doctrine of equivalents involves the timing of the separate analyses for an “insubstantial change.” As this court has recently clarified, a structural equivalent under § 112 must have been available at the time of the issuance of the claim. See Chiuminatta, 145 F.3d at 1310. An equivalent structure or act under § 112 cannot embrace technology developed after the issuance of the patent because the literal meaning of a claim is fixed upon its issuance. An “after arising equivalent” infringes, if at all, under the doctrine of equivalents. See Warner-Jenkinson, 117 S. Ct. at 1052; Hughes Aircraft Co. v. U.S., 140 F.3d 1470, 1475 (Fed. Cir. 1998). Thus, the temporal difference between patent issuance and infringement distinguish an equivalent under § 112 from an equivalent under the doctrine of equivalents. See Chiuminatta, 145 F.3d at 1310. In other words, an equivalent structure or act

64. E.g., JVW Enters. v. Interact Accessories, Inc., 424 F.3d 1324, 1332 (Fed. Cir. 2005); Callicrate v. Wadsworth Mfg., 427 F.3d 1361, 1369 (Fed. Cir. 2005); Omega Eng’g, 334 F.3d at 1322. 65. E.g., Frank’s Casing Crew & Rental Tools, Inc. v. Weatherford Int’l Inc., 389 F.3d 1370, 1378 (Fed. Cir. 2004); Valmont Indus., Inc. v. Reinke Mfg. Co., Inc., 983 F.3d 1039, 1042 (Fed. Cir. 1993). 66. E.g., Welker Bearing Co. v. PHD, Inc., 550 F.3d 1090, 1099–1100 (Fed. Cir. 2008); Al-Site Corp. v. VSI Int’l, Inc., 174 F.3d 1308, 1320–21, 21 n.2 (Fed. Cir. 1999); Valmont, 938 F.3d at 1043–44. 67. E.g., Interactive Pictures Corp. v. Infinite Pictures, Inc., 274 F.3d 1371, 1383 (Fed. Cir. 2001); Ishida Co., Ltd. v. Taylor, 221 F.3d 1310, 1317 (Fed. Cir. 2000); Odetics, Inc. v. Storage Tech. Corp., 185 F.3d 1259, 1267 (Fed. Cir. 1999); Chiuminatta Concrete Concepts, Inc. v. Cardinal Indus. Inc., 145 F.3d 1303 (Fed. Cir. 1998); Valmont, 983 F.3d at 1043. 68. E.g., Welker Bearing, 550 F.3d at 1099–1100; Al-Site, 174 F.3d at 1321 n.2; Chiuminatta, 145 F.3d at 1310. 69. E.g., Welker Bearing, 550 F.3d at 1099–1100; Al-Site, 174 F.3d at 1321; Chiuminatta, 145 F.3d at 1310. 70. E.g., Welker Bearing, 550 F.3d at 1099–1100; Al-Site, 174 F.3d at 1321, 1321; Chiuminatta, 145 F.3d at 1310.

Specific Rules of Literal Infringement 133 under § 112 for literal infringement must have been available at the time of patent issuance while an equivalent under the doctrine of equivalents may arise after patent issuance and before the time of infringement. See Warner-Jenkinson, 117 S. Ct. at 1053. An “after-arising” technology could thus infringe under the doctrine of equivalents without infringing literally as a § 112, P 6 equivalent. n2 Furthermore, under § 112, P 6, the accused device must perform the identical function as recited in the claim element while the doctrine of equivalents may be satisfied when the function performed by the accused device is only substantially the same. See Cybor, 138 F.3d at 1456; Hughes Aircraft, 140 F.3d at 1475. n2 These principles, as explained in Chiuminatta Concrete Concepts, Inc. v. Cardinal Indus., Inc., 145 F.3d 1303 (Fed. Cir. 1998), suggest that title 35 will not produce an “equivalent of an equivalent” by applying both § 112, P 6 and the doctrine of equivalents to the structure of a given claim element. A proposed equivalent must have arisen at a definite period in time, i.e., either before or after patent issuance. If before, a § 112, P 6 structural equivalents analysis applies and any analysis for equivalent structure under the doctrine of equivalents collapses into the § 112, P 6 analysis. If after, a non-textual infringement analysis proceeds under the doctrine of equivalents. Patent policy supports application of the doctrine of equivalents to a claim element expressed in means-plus-function form in the case of “after-arising” technology because a patent draftsman has no way to anticipate and account for later developed substitutes for a claim element. Therefore, the doctrine of equivalents appropriately allows marginally broader coverage than § 112, P 6. Although § 112, P 6 and the doctrine of equivalents are different in purpose and administration, “a finding of a lack of literal infringement for lack of equivalent structure under a means-plus-function limitation may preclude a finding of equivalence under the doctrine of equivalents.” Chiuminatta, 145 F.3d at 1311. Both equivalence analyses, after all, apply “similar analyses of insubstantiality of the differences.” Id. This confluence occurs because infringement requires, either literally or under the doctrine of equivalents, that the accused product or process incorporate each limitation of the claimed invention. See WarnerJenkinson, 117 S. Ct. at 1049; Pennwalt, 833 F.2d at 935. Therefore, if an accused product or process performs the identical function and yet avoids literal infringement for lack of a § 112, P 6 structural equivalent, it may well fail to infringe the same functional element under the doctrine of equivalents. See Chiuminatta, 145 F.3d at 1311. This same reasoning may be applied in reverse in certain circumstances. Where, as here, there is identity of function and no after-arising technology, a means-plus-function claim element that is found to be infringed only under the doctrine of equivalents due to a jury instruction failing to instruct on § 112, P 6 structural equivalents is also literally present in the accused device.71

71. Al-Site, 174 F.3d at 1321 (emphasis added); Welker Bearing, 550 F.3d at 1099–100.


Finally, while claim construction is a question of law,72 determination of the scope of equivalents under Section 112, Paragraph 6 is a question of fact as it involves an infringement determination as to whether an accused device is an equivalent—and infringement determinations are questions of fact.73

B. Product-by-Process Claims Usage Note: Chapter 2, Section V[G], discusses the construction of product-byprocess claims in detail. The following Section discusses only product-by-process claims as they relate to literal infringement. Therefore, the reader interested in more information on product-by-process claims should refer to Chapter 2, Section V[G]. As discussed in detail in Section V[B][2] below, the process limitations of product-by-process claims serve as limitations in determining literal infringement. Therefore, a product-by-process claim is literally infringed only by a product that was made by a process that is the same as the process limitations in the claim. A product-by-process claim is not literally infringed by a product that was not made by a process identical to the process limitations in the claim, even if the product is otherwise identical. A product-by-process claim is “one in which the product is defined at least in part in terms of the method or process by which it is made.”74 While the patent statute does not provide for product-by-process claims, the courts have long recognized the appropriateness of such claims.75 The original purpose of product-by-process claims was to allow inventors to claim “an otherwise patentable product that resists definition by other than the process by which it is made.”76 Thus, the original intention behind product-by-process claims was to prevent an inventor from being foreclosed from the benefits of the patent system simply because her or his product was difficult to describe in words, or its structure was insufficiently understood.77 “Today, however, productby-process claims are used by inventors even if the invention could have been described independent of the process.”78

72. E.g., IMS Tech., Inc. v. Haas Automation, Inc., 206 F.3d 1422, 1329–30 (Fed. Cir. 2000). 73. Id. 74. Bonito Boats, Inc. v. Thunder Craft Boats, Inc., 489 U.S. 141, 158–59 (1989); SmithKline Beecham Corp. v. Apotex Corp., 439 F.3d 1312, 1315 (Fed. Cir. 2006). 75. E.g., In re Thorpe, 777 F.2d 695, 697 (Fed. Cir. 1985). 76. Id. 77. SmithKline, 439 F.3d at 1315. 78. Id.; but cf. SmithKline Beecham Corp. v. Apotex Corp., 453 F.3d 1346 (Fed. Cir. 2006) (reh’g denied, reh’g en banc denied), 453 F.3d 1347 (dissenting opinions) (arguing that there should be two different types of product-by-process claims, one type for known products where the product does not need to be novel but the process limitations of the claim serve as limitations in determining infringement, and another type for products that cannot be claimed without


1. Construing Product-By-Process Claims for Validity As discussed in detail in Chapter 2, Section V[G], for purposes of determining validity of product-by-process claims, and thus also for determining patentability of these claims in the U.S. Patent Office, the law is clear that product-by-process claims are to be construed based only on the product, and not on the process steps.79 2. Construing Product-by-Process Claims for Literal Infringement In Abbott Labs. v. Sandoz, Inc., the Federal Circuit finally settled a nearly seventeen-year intra-circuit split on the proper construction of product-byprocess claims for determining infringement.80 The court sua sponte held en banc that process limitations in product-by-process claims serve as limitations in determining infringement.81 Therefore, a product-by-process claim is literally infringed only by a product that is made by a process that is the same as the process limitations in the claim.82 The court was clear that this rule applies to all product-by-process claims, regardless of whether the product could be claimed without reference to the process by which it is made.83 a) History of Product-By-Process Claims in the Federal Circuit For almost 17 years, there has been a split within the Federal Circuit as to whether process limitations in product-by-process claims are limitations for

79.

80. 81. 82. 83.

reference to the process by which the product is made, and for which the process limitations do not serve as limitations in determining infringement); See 970 F.2d 834, rehearing en banc denied, 974 F.2d 1299 (concurring opinion), 974 F.2d 1279 (dissenting opinions) (same); Abbott Labs. v. Sandoz, Inc., 2009 U.S. App. LEXIS 10476, *106–107 (Fed. Cir. 2009) (Newman, dissenting) (same); Abbott, 2009 U.S. App. LEXIS 10476, *107–110 (Lourie, dissenting) (same). SmithKline, 439 F.3d at 1317; but see SmithKline, 453 F.3d at 1346 (reh’g denied, reh’g en banc denied), 453 F.3d 1347 (dissenting opinions) (arguing that there should be two different types of product-by-process claims, one type for known products where the product does not need to be novel but the process limitations of the claim serve as limitations in determining infringement, and another type for products that cannot be claimed without reference to the process by which the product is made, and for which the process limitations do not serve as limitations in determining infringement); See 970 F.2d 834, rehearing en banc denied, 974 F.2d 1299 (concurring opinion), 974 F.2d 1279 (dissenting opinions) (same); Abbott Labs., 2009 U.S. App. LEXIS 10476, *106–107 (Newman, dissenting) (same); Abbott, 2009 U.S. App. LEXIS 10476, *107–110 (Lourie, dissenting) (same). Abbott Labs. v. Sandoz, Inc., 2009 U.S. App. LEXIS 10476 (Fed. Cir. 2009) (en banc in relevant part). Id. at *26–27. Id. at *28. Id. at *31–32.


determining infringement. In 1991, in Scripps, a panel of the Federal Circuit held that product-by-process claims were not limited by the process steps within the claims.84 The patent in Scripps contained product-by-process claims directed to a product made in accordance with a particular process.85 The court held that the accused product, which was produced by a different process, nonetheless infringed the product-by-process claims because “in determining patentability we construe the product as not limited by the process stated in the claims. Since claims must be construed the same way for validity and for infringement, the correct reading of the product-by-process claims is that they are not limited to product prepared by the process set forth in the claims.”86 In 1992, in Atlantic Thermoplastics, a different panel of the Federal Circuit held, completely opposite to Scripps, that the process steps in product-byprocess claims do serve as claim limitations for determining infringement.87 The product-by-process claim in Atlantic Thermoplastics concerned shock absorbing shoe innersoles.88 The patentee argued that under Scripps the innersoles infringed the product-by-process claim because they were physically indistinguishable from the claimed product, even though they were made by a process substantially different from the clamed process.89 The Atlantic Thermoplastics court disagreed, stating: “In light of Supreme Court case law and the history of product-by-process claims, this court acknowledges that infringement analysis proceeds with reference to the patent claims. Thus, process terms in product-by-process claims serve as limitations in determining infringement.”90 A sharply divided court denied a request to rehear Atlantic Thermoplastics en banc, with four judges dissenting in four separate opinions.91 Judge Rich argued that the panel’s decision was improper because claim construction was not an issue; instead, the patentee had conceded that its product-by-process claim was limited to the specified process.92 He also condemned the panel for ignoring the Federal Circuit’s rule that a prior binding panel decision (i.e., Scripps) could not be ignored or overruled except by an en banc decision.93

84. 85. 86. 87. 88. 89. 90. 91.

Scripps Clinic and Research Foundation v. Genentech, 927 F.2d 1565, 1583 (Fed. Cir. 1991). Id. at 1570. Id. at 1583. Atlantic Thermoplastics, 970 F.2d at 846–47. Id. at 835. Id. at 838. Id. at 846–47. See 970 F.2d 834, rehearing en banc denied, 974 F.2d 1299 (concurring opinion), 974 F.2d 1279 (dissenting opinions). 92. 974 F.2d at 1280 (Rich, dissenting). 93. Id. at 1281.


Judge Newman, joined by Judges Rich and Lourie, argued that the panel in Atlantic Thermoplastics had incorrectly ruled that all process steps of a productby-process claim should be automatically treated as claim limitations.94 In their view, the process steps should sometimes be treated as claim limitations and sometimes not, depending on the “class of claim” at issue.95 Specifically, these judges contended that process limitations should not impact the validity or infringement of “true” product-by-process claims, which are those to novel products that cannot be described solely by their physical properties (as they argued was the case in Scripps), but should apply to limit claims directed to old products made by a new process (as they argued was the case in Atlantic Thermoplastics).96 A major problem with this position by the dissenters is that the law is clear that there are not two different types of product-by-process claims, distinguished by whether the product can be described without regard to the process by which it is made. Any product may be claimed in a product-by-process claim, regardless of whether the product can be described without regard to how it is made.97 Further, the validity and patentability of all productby-process claims is based solely on the novelty and nonobviousness of the product claimed, without regard to the process limitations, and regardless of whether the product can be described without regard to the process by which it is made.98 In 2006, in SmithKline, the Federal Circuit came close to addressing the Scripps—Atlantic Thermoplastics split and discussed the issue in detail.99 However, the SmithKline court left the split unresolved. The court declined to decide the issue of infringement of product-by-process claims because it affirmed the district court’s grant of summary judgment that the product-byprocess claims were anticipated.100 Since the claims were found to be invalid, the court declined to decide the issue of infringement.101 The SmithKline court explained that anticipation of a product-by-process claim has always turned on whether the product itself was disclosed in the prior art, and antic-

94. 95. 96. 97. 98.

99. 100. 101.

974 F.2d at 1282–83 (Newman, dissenting). Id. at 1284. Id. E.g., SmithKline, 439 F.3d at 1315 (“Today, however, product-by-process claims are used by inventors even if the invention could have been described independent of the process.”). E.g., Id. at 1315–17 (reiterating that the validity of all product-by-process claims depends solely on the novelty and nonobviousness of the product, without regard to how it is made, and quoting M.P.E.P. § 2113 which instructs that patentability of all product-by-process claims is based solely on the novelty and nonobviousness of the product, without regard to how it is made). SmithKline, 439 F.3d at 1315–17. Id. at 1319. Id. at 1316–17.


ipation could not be avoided by claiming a known product as produced by a different process: We need not address this controversy here. The issue here does not turn on how broadly or narrowly we construe the ’944 patent’s claims, for it is undisputed that the product that is the subject of the patent’s claims is paroxetine. Rather the issue is whether the [prior art] anticipated the . . . product-by-process patent, when the [prior art] broadly claimed paroxetine without regard to the process by which it was made. Thus, the ultimate issue is simply whether the prior art disclosure of a product precludes a future claim to that same product when it is made by an allegedly novel process. Regardless of how broadly or narrowly one construes a product-by-process claim, it is clear that such claims are always to a product, not a process. It has long been established that one cannot avoid anticipation by an earlier product disclosure by claiming the same product more narrowly, that is, by claiming the product as produced by a particular process.102

As with Atlantic Thermoplastics, a divided court denied a request to rehear SmithKline en banc, with three judges dissenting in two separate opinions.103 Judge Newman, joined by Judge Gajarsa, referred to her dissent in Atlantic Thermoplastics and argued that Atlantic Thermoplastics and Scripps could be reconciled if two different classes of product-by-process claims were recognized, depending on whether the product could be described without reference to how it is made.104 Judge Rader, in a dissent joined by Judge Gajarsa, argued that the panel should have addressed and resolved the split, and was only adding to the confusion:105 The role of the claims in an infringement or anticipation analysis is at the heart of patent law. Whether all the words in a product-by-process claim are limiting is a question that patent attorneys, trial courts, and apparently this court, still cannot confidently answer. . . . Without doubt, this court’s product-by-process law contains an apparent conflict. Choosing between Scripps . . . and Atlantic Thermoplastics . . . is not

102. Id. (footnote and header omitted). 103. SmithKline Beecham Corp. v. Apotex Corp., 453 F.3d 1346 (Fed. Cir. 2006) (reh’g denied, reh’g en banc denied), 453 F.3d at 1347 (dissenting opinions). 104. Id. at 1347 (Newman, dissenting) (“As I wrote in my dissent from the panel decision, Scripps accommodates the situation where the product is novel and complex and cannot be described other than by the way it was made, while Atlantic Thermoplastics deals with a product whose production requires use of a certain process, whether or not the product itself is novel.”). 105. Id. at 1347–48 (Rader, dissenting).

Specific Rules of Literal Infringement 139 task this court through its inaction should continue to force on trial courts, as it did in Smithkline. Giving those same trial courts the option of ignoring the claim language altogether is simply inexcusable.106

b) Basis of the Abbott Court’s En Banc Holding The Federal Circuit in Abbott based its sua sponte en banc holding that process limitations in product-by-process claims are to be considered as limitations for determining infringement on “Supreme Court precedent and the treatment of product-by-process claims throughout the years by the PTO and other binding court decisions.”107 The court first discussed a number of Supreme Court decisions, dating from 1874 to 1938, in which, the court asserted, “the Supreme Court consistently noted that process terms that define the product in a product-by-process claim serve as enforceable limitations.”108 Next, the court considered “binding case law of this court’s predecessor courts, the United States Court of Customs and Patent Appeals, and the United States Court of Claims,” which the court asserted “followed the same rule” as the Supreme Court, “that process terms that define the product in a productby-process claim serve as enforceable limitations.”109 Further, the court noted that, “[t]his court’s sister circuits also followed the general rule that the defining process terms limit product-by-process claims.”110 The court also cited to Warner-Jenkinson,111 arguing that the Supreme Court’s broad principle for the doctrine of equivalents that each limitation of a claim is material to defining the claim’s scope supported the court’s holding for infringement of product-by-process claims.112 More recently, the Supreme Court has reiterated the broad principle that “[e]ach element contained in a patent claim is deemed material to defining the scope of the patented invention.” Although Warner-Jenkinson specifically addressed the doctrine of equivalents, this rule applies to claim construction overall. As applied to product-by-process claims, Warner-Jenkinson thus reinforces the basic rule that the process terms limit product-by-process claims.113

106. 107. 108. 109. 110. 111. 112. 113.

Id. at 1347–48 (Rader, dissenting). Abbott, 2009 U.S. App. LEXIS 10476, *26. Id. at *22. Id. at *22–23. Id. at *23. Warner-Jenkinson Co. v. Hilton Davis Chem. Co., 520 U.S. 17 (1997). Abbott, 2009 U.S. App. LEXIS 10476, *27. Abbott, 2009 U.S. App. LEXIS 10476, *27 (internal citation omitted).

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c) Scripps Is Expressly Overruled The Abbott court endorsed Atlantic Thermoplastics and expressly overruled Scripps. In summarizing its holding, the court cited and quoted Atlantic Thermoplastics, stating: Thus, based on Supreme Court precedent and the treatment of productby-process claims throughout the years by the PTO and other binding court decisions, this court now restates that “process terms in product-by-process claims serve as limitations in determining infringement.” Atl. Thermoplastics, 970 F.2d at 846–47.114


d) The Holding of Abbott Applies to All Types of Product-By-Process Claims The en banc Federal Circuit made it clear that its holding in Abbott applies to all types of product-by-process claims, regardless of whether the product can be described without reference to the process by which it is made.116 According to the court, a contrary rule, which was advocated by both dissenting opinions, would give the patentee more than the inventor claimed: [I]t is both unnecessary and logically unsound to create a rule that the process limitations of a product-by-process claim should not be enforced in some exceptional instance when the structure of the claimed product is unknown and the product can be defined only by reference to a process by which it can be made. Such a rule would expand the protection of the patent beyond the subject matter that the inventor has “particularly point[ed] out and distinctly claim[ed]” as his invention, 35 U.S.C. § 112, P [2].117

The court emphasized this holding in response to two dissents which argued that the court’s en banc holding should not apply to all types of product-by-process claims.118 In particular, the dissenters argued that when

114. 115. 116. 117. 118.

Id. at *26–27. Id. at *27. Id. at *28–32. Id. at *31–32. Id. at *46 (Newman, dissenting); Id. at *107 (Lourie, dissenting).


product-by-process claims are required to claim a novel product because the product cannot be described without reference to the process by which it is made, the process limitations of these claims should not be considered for infringement purposes.119 Therefore, when determining literal infringement of product-by-process claims, the process limitations of the claims must be considered. A product will literally infringe a product-by-process claim only if it was made by a process having steps identical to the process limitations in the claim. A product will not literally infringe a product-by-process claim if it was made by a different process from that claimed, even if the product is otherwise identical to the claimed product.

C. “Practicing the Prior Art” Over the years, accused infringers have occasionally argued a “practicing the prior art” defense to literal infringement. They argue that if an accused infringing activity is within the prior art, it cannot infringe because any claim that covers the alleged infringing activity is invalid because it also covers the prior art. However, the Federal Circuit has repeatedly held that practicing the prior art is not a defense to infringement120 and that an invalid claim may nonetheless be infringed.121 Therefore, “practicing the prior art” is not a defense to literal infringement against which the patentee must bears the burden of proof by a preponderance of the evidence. Instead, to avoid infringement liability via “practicing the prior art,” the accused infringer must prove that the claim is invalid, and must do so under the burden of proof of clear and convincing evidence, which is the burden of proof of patent invalidity (see Chapter 6). As explained by the Federal Circuit in the Baxter Healthcare v. Sepctramed case: Spectramed’s principal argument in support of the district court’s grant of JMOL is that their “accused devices” cannot infringe because Spectramed’s gray connecting cables, which are used in combination with the prior art DTX transducer, were constructed using only the teachings of a prior art reference, the Murray/Howe publication. Spectramed argues that the record is devoid of substantial evidence showing that their gray cable is different from that disclosed in Fig. 4 of Murray/Howe.

119. Id. at *106–107 (Newman, dissenting); Id. at *107–110 (Lourie, dissenting). 120. E.g., Zenith Elecs. Corp. v PDI Communications Sys., Inc., 522 F.3d 1348, 1363 (Fed. Cir. 2008); Tate Access Floors, Inc. v. Interface Architectural Resources, Inc., 279 F.3d 1357, 1367 (Fed. Cir. 2002); Baxter Healthcare Corp. v. Spectramed, Inc., 49 F.3d 1575, 1583 (Fed. Cir. 1995). 121. Id.

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Chapter 3 Patent Law Principle II: Infringement According to Spectramed, the trial court properly set aside the jury’s findings of infringement because Spectramed only used what was already disclosed in the prior art, viz., their prior art DTX device in combination with the teaching of Murray/Howe regarding backside calibration. Implicit in Spectramed’s argument is that Baxter, in order to establish literal infringement, must prove by a preponderance of the evidence that Spectramed’s accused devices embody all the limitations in the asserted claims, and in addition, Spectramed’s accused devices must not be an adoption of the combined teachings of the prior art. This is not a correct statement of the law governing patent infringement. There is no requirement that the accused device be nonobvious in light of the prior art, or otherwise be itself patentable. Literal infringement exists if each of the limitations of the asserted claim(s) read on, that is, are found in, the accused device. Questions of obviousness in light of the prior art go to validity of the claims, not to whether an accused device infringes.122

VI. Practice Points A. As the First Step, Always Objectively Construe the Patent’s Claims In any patent infringement determination, the first step is always to construe the patent’s claims following the guidance of the U.S. Supreme Court and the Federal Circuit as set forth in Chapter 2. When construing claims for an evaluation or opinion on literal infringement, it is essential that the claims be construed solely and objectively in light of the patent’s intrinsic evidence—and if in evidence, extrinsic evidence. The potentially infringing product or process is never to be considered during claim construction for literal infringement.

B. Always Compare the Objectively Construed Claim with the Potentially Infringing Product or Process A determination of literal infringement must always be based on a comparison of the objectively construed claims with the potentially infringing product or process. It is clear error to compare the patent’s preferred embodiments or the patent owner’s commercial embodiment with the potentially infringing product or process.

122. Baxter Healthcare, 49 F.3d at 1583 (footnote omitted) (emphasis added).

Practice Points

C. For Evaluations and Opinions, It is Essential to Understand the Potentially Infringing Product or Process When evaluating or opining on infringement, it is essential that the potentially infringing product or process be clearly understood and compared with the construed claims. It does no good to evaluate or opine on infringement when the potentially infringing product or process is not clearly understood. Additionally, a new determination of potential infringement must be made if the potentially infringing product or process changes after completion of an infringement evaluation or opinion. This can be an important issue when evaluating or opining on potential infringement of third party patents as part of the due diligence for a new product launch (a so-called “freedom to operate” evaluation or opinion). Therefore, the client should be expressly warned, in writing, that the results of any infringement evaluation or opinion are strictly based on the product or process as understood at the time of the review, and that the evaluation or opinion does not cover any alterations in the potentially infringing product or process.

D. Role of the Doctrine of Equivalents In determining infringement, always be aware that any claim limitation that is not literally infringed by a potentially infringing product or process must also be evaluated for potential infringement under the doctrine of equivalents. (See Chapter 4 for determining infringement under the doctrine of equivalents.)

E. Be Aware of Non-Direct Infringement, Activities Abroad, and Infringement Exemptions In any infringement evaluation or opinion, be mindful of the other subsections of 35 U.S.C. § 271 that apply to non-direct infringement (inducement of infringement and contributory infringement), activities abroad, and infringement exemptions. (These are discussed in Chapter 5.)

F. Be Aware of Special Claiming Issues Such as Means-Plus-Function and Product-by-Product Claims Be aware of claims to which special rules apply for determining literal infringement, such as means-plus-function claims and product-by-process claims. Literal infringement of these claims must be evaluated under the specific rules applicable to them.

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CHAP T ER

4 Patent Law Principle II: Infringement The Doctrine of Equivalents

I. Infringement Under the Doctrine of Equivalents A. History

147 148

1. Supreme Court and the Doctrine of Equivalents

148

2. Limitations on the Doctrine of Equivalents

150

B. Determination of Equivalents Involves Construing the Scope of Potential Equivalents of Claim Limitations, an Exercise That Is Strictly Different From Claim Construction for Literal Infringement

152

C. Burden of Proof

153

D. Questions of Fact and Law

153

II. Defining Equivalents

154

A. All Limitaions Rule (All Elements Rule; Doctrine of Vitiation)

155

B. Insubstantial Differences; Function-Way-Result; Interchangeability

157

III. Limitations on the Doctrine of Equivalents A. Prosecution History Estoppel

158 158

1. Amendment-Based Prosecution History Estoppel

159

2. Argument-Based Prosecution History Estoppel

164

B. Exclusion

166

C. Dedication-Disclosure Rule

168

D. Prior Art and the Hypothetical Claim

169

E. Means-Plus-Function Claims

170

1. Introduction and Overview

170


171

3. Infringement of Means-Plus-Function Claims Under the Doctrine of Equivalents

172

145

146 Chapter 4 Patent Law Principle II: Infringement a) Means-Plus-Function Equivalency (Section 112, Paragraph 6) b) Equivalency Under the Doctrine of Equivalents F. Product-by-Process Claims

172 172 174

1. Construing Product-By-Process Claims for Validity

175

2. Construing Product-by-Process Claims for Determining Infringement Under the Doctrine of Equivalents

175

a) History of Product-by-Process Claims in the Federal Circuit

176

b) Basis of the Abbott Court’s En Banc Holding

179

c) Scripps Is Expressly Overruled

180

d) The Holding of Abbott Applies to All Types of Product-by-Process Claims

180

IV. Practice Points

181

A. A Competent Noninfringement Opinion Must Separately Consider the Doctrine of Equivalents

181

B. Claim Construction for Literal Infringement Differs from Construing Claims for Infringement Under the Doctrine of Equivalents

182

C. The All Limitations Rule Is All Important

182

D. Proof of Equivalency

182

E. Be Sure to Look for and, Where Necessary, Apply Limitations and Special Rules for Determining Infringement Under the Doctrine of Equivalents

183

Infringement Under the Doctrine of Equivalents 147

Usage Note: This chapter covers infringement under the doctrine of equivalents, including claim construction of equivalents. Chapter 2 covers claim construction for literal infringement. Chapter 3 covers literal infringement, while Chapter 5 covers non-direct infringement, joint infringement, experimental use, and implied license. In addition, in following the lead of the Federal Circuit, this book especially as to infringement determinations uses the term limitations to refer to claims and the term elements to refer to potentially infringing products or processes.1 For example, an infringing product or process has elements corresponding to every limitation of the infringed claim. However, some older cases occasionally refer to claim elements when discussing claim limitations.

I. Infringement Under the Doctrine of Equivalents Under limited circumstances, a patent claim can be infringed under the doctrine of equivalents even though it is not literally infringed.2 Courts developed the doctrine of equivalents to protect the patentee from competitors who “make unimportant and insubstantial changes and substitutions to the patent which, though adding nothing, would be enough to take the copied matter outside the claim,” thereby depriving the inventor of the benefit of the invention.3 “The doctrine of equivalents allows the patentee to claim those insubstantial alterations that were not captured in drafting the original patent claims but which could be created through trivial changes.”4 As discussed below, the U.S. Supreme Court has repeatedly reaffirmed that the doctrine of equivalents is important and well-established patent law. However, its application has come under continued attack by the Federal Circuit. Indeed, application of the doctrine of equivalents is currently subject to strict limitations, especially for claims narrowed by amendment during prosecution.

1. E.g., Festo Corp. v. Shoketsu Kinzoku Kogyo Kabushiki Co., 234 F.3d 558, 564 n.1 (Fed. Cir. 2000) (en banc), vacated and remanded, Festo Corp. v. Shoketsu Kinzoku Kogyo Kabushiki Co., 535 U.S. 722, 122 S. Ct. 1831 (2002) (“It is preferable to use the term ‘limitation’ when referring to claim language and the term ‘element’ when referring to the accused device.”); Lockheed Martin Corp. v. Space Systems/Loral, Inc., 249 F.3d 1314, 1321 n.1 (Fed. Cir. 2001). 2. Graver Tank & Mfg. Co., Inc. v. Linde Air Products Co., 339 U.S. 605, 609 (1950); WarnerJenkinson Co., Inc. v. Hilton Davis Chemical Co., 520 U.S. 17, 21 (1997). 3. Graver Tank, 339 U.S. at 607–08. 4. Festo, 535 U.S. at 722, 733 (2002).

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A. History The doctrine of equivalents has a long judicial history. The 1854 U.S. Supreme Court case Sinans v. Denmead is considered to be the first adoption of the doctrine,5 holding that “the exclusive right to the thing patented is not secured, if the public are at liberty to make substantial copies of it, varying its form or proportions.”6 One of the more modern leading Supreme Court cases on the doctrine of equivalents is Gravier Tank & Mfg. Co. v. Linde Air Products.7 In Gravier Tank, the Court reaffirmed the long-standing doctrine of equivalents, emphasizing that patent claims must protect the inventor not only from devices falling within the literal scope of a patent’s claims, but from copyists who “make unimportant and insubstantial changes and substitutions in the patent which, though adding nothing, would be enough to take the copied matter outside the claim, and hence outside the reach of law.”8 The Court has consistently maintained this position in a number of cases, some of which have explicitly resisted Federal Circuit efforts at limiting the application of the doctrine.9 1. Supreme Court and the Doctrine of Equivalents Since the 1854 Sineans case, its very first on the doctrine of equivalents as discussed above, the Court has always supported the doctrine, despite concerns about its perceived lack of clear delineation to the public as to the scope of a patent’s claims.10 For example, in Sinans the dissent argued that in creating the doctrine of equivalents, the Court had sacrificed the objective of “fullness, clearness, exactness, preciseness, and particularity, in the description of the invention.”11 The debate continued in Graver Tank, in which the dissent objected that under the doctrine of equivalents a competitor “cannot rely on what the language of a patent claims. He must be able, at the peril of heavy infringement damages, to forecast how far a court relatively unversed in a particular technological field will expand the claim’s language. . . .”12

5. Sinans v. Denmead, 56 U.S. 330, 14 L. Ed. 717 (1854); Festo, 535 U.S. at 7323 (“When the Court in Sinans v. Denmead first adopted what has become the doctrine of equivalents. . . .”). 6. Sinans, 6 U.S. at 343. 7. Gravier Tank, 339 U.S. at 605. 8. Id., 339 U.S. at 607. 9. E.g., Warner-Jenkinson Co., Inc. v. Hilton Davis Chemical Co., 520 U.S. 17, 21 (1997); Festo, 535 U.S. at 733. 10. A covered in Chapter 2 (claim construction), due to the inherent inabilities of written language to clearly define all claimed technologies, there may always be some uncertainty as to the scope a patent’s claims, even for literal infringement, as shown by the necessity of claim construction for literal infringement. 11. Sinans, 6 U.S. at 347 (Campbell, J., dissenting). 12. Gravier Tank, 339 U.S. at 617 (Black, J., dissenting).


In Warner-Jenkinson, the Court stated: We do, however, share the concern of the dissenters below that the doctrine of equivalents, as it has come to be applied since Graver Tank, has taken on a life of its own, unbounded by the patent claims. There can be no denying that the doctrine of equivalents, when applied broadly, conflicts with the definitional and public-notice functions of the statutory claiming requirement.13

However, in its most recent case on the doctrine of equivalents, the 2002 Festo decision, the Supreme Court summarized the holding of WarnerJenkinson on the doctrine as follows: Most recently, in Warner-Jenkinson, the Court reaffirmed that equivalents remain a firmly entrenched part of the settled rights protected by the patent. A unanimous opinion concluded that if the doctrine is to be discarded, it is Congress and not the Court that should do so. . . .14

Thus, the Court clearly reaffirmed its support of and continued viability of the doctrine of equivalents. In rejecting the Federal Circuit’s effort to greatly curtail the doctrine, the Court in Festo explained: The patent laws “promote the Progress of Science and useful Arts” by rewarding innovation with a temporary monopoly. U.S. Const., Art. I, § 8, cl. 8. The monopoly is a property right; and like any property right, its boundaries should be clear. This clarity is essential to promote progress, because it enables efficient investment in innovation. A patent holder should know what he owns, and the public should know what he does not. For this reason, the patent laws require inventors to describe their work in “full, clear, concise, and exact terms,” 35 U.S.C. § 112, as part of the delicate balance the law attempts to maintain between inventors, who rely on the promise of the law to bring the invention forth, and the public, which should be encouraged to pursue innovations, creations, and new ideas beyond the inventor’s exclusive rights. Bonito Boats, Inc. v. Thunder Craft Boats, Inc., 489 U.S. 141, 150, 103 L. Ed. 2d 118, 109 S. Ct. 971 (1989). Unfortunately, the nature of language makes it impossible to capture the essence of a thing in a patent application. The inventor who chooses to patent an invention and disclose it to the public, rather than exploit it in secret, bears the risk that others will devote their efforts toward exploiting the limits of the patent’s language: “An invention exists most importantly as a tangible structure or a series of drawings. A verbal portrayal is usually an afterthought written to

13. Warner-Jenkinson, 520 U.S. at 28–29. 14. Festo, 535 U.S. at 733 (quoting Warner-Jenkinson, 520 U.S. at 28).

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Chapter 4 Patent Law Principle II: Infringement satisfy the requirements of patent law. This conversion of machine to words allows for unintended idea gaps which cannot be satisfactorily filled. Often the invention is novel and words do not exist to describe it. The dictionary does not always keep abreast of the inventor. It cannot. Things are not made for the sake of words, but words for things.” Autogiro Co. of America v. United States, 384 F.2d 391, 397, 181 Ct. Cl. 55 (Ct. Cl. 1967). The language in the patent claims may not capture every nuance of the invention or describe with complete precision the range of its novelty. If patents were always interpreted by their literal terms, their value would be greatly diminished. Unimportant and insubstantial substitutes for certain elements could defeat the patent, and its value to inventors could be destroyed by simple acts of copying. For this reason, the clearest rule of patent interpretation, literalism, may conserve judicial resources but is not necessarily the most efficient rule. The scope of a patent is not limited to its literal terms but instead embraces all equivalents to the claims described. See Winans v. Denmead, 56 U.S. 330, 15 How. 330, 347, 14 L. Ed. 717 (1854). It is true that the doctrine of equivalents renders the scope of patents less certain. It may be difficult to determine what is, or is not, an equivalent to a particular element of an invention. If competitors cannot be certain about a patent’s extent, they may be deterred from engaging in legitimate manufactures outside its limits, or they may invest by mistake in competing products that the patent secures. In addition the uncertainty may lead to wasteful litigation between competitors, suits that a rule of literalism might avoid. These concerns with the doctrine of equivalents, however, are not new. Each time the Court has considered the doctrine, it has acknowledged this uncertainty as the price of ensuring the appropriate incentives for innovation, and it has affirmed the doctrine over dissents that urged a more certain rule.15

2. Limitations on the Doctrine of Equivalents Despite over 150 years of U.S. Supreme Court jurisprudence supporting the doctrine of equivalents, a number of limitations have been imposed on the doctrine, many of them significant. Section III below discussed these in detail. A common theme in many of these limitations is that the “[t]he doctrine of equivalents is premised on language’s inability to capture the essence of innovation. . . .”16 Therefore, if a patentee did in fact describe a purported equivalent, but did not literally claim it, the patentee ought not to be able to claim it under the doctrine of equivalent. As indicated in Festo regarding

15. Id. at 730–32 (emphasis added). 16. Id. at 734.


the limitation known as prosecution history estoppel (see Section III[A] below): Prosecution history estoppel ensures that the doctrine of equivalents remains tied to its underlying purpose. Where the original application once embraced the purported equivalent but the patentee narrowed his claims to obtain the patent or to protect its validity, the patentee cannot assert that he lacked the words to describe the subject matter in question. The doctrine of equivalents is premised on language’s inability to capture the essence of innovation, but a prior application describing the precise element at issue undercuts that premise. In that instance the prosecution history has established that the inventor turned his attention to the subject matter in question, knew the words for both the broader and narrower claim, and affirmatively chose the latter.17

Similarly, courts have held that where a patentee clearly disclaims subject matter (e.g., through argument-based estoppel, including express disclaimer), the patentee ought not be able to assert that the disclaimed subject matter falls within the scope of a patent’s claims under the doctrine of equivalents. However, the Supreme Court has expressly prevented the Federal Circuit from over-limiting the doctrine of equivalents. For example, at one point in the Festo line of cases, the Federal Circuit en banc greatly limited the doctrine of equivalents based on prosecution history estoppel.18 In that case, the Federal Circuit held that no range of equivalents was available at all for amended claim limitations.19 In response, the Supreme Court vacated and remanded the case, holding: The Court of Appeals held that prosecution history estoppel is a complete bar, and so the narrowed element must be limited to its strict literal terms. Based upon its experience the Court of Appeals decided that the flexible-bar rule is unworkable because it leads to excessive uncertainty and burdens legitimate innovation. For the reasons that follow, we disagree with the decision to adopt the complete bar. Though prosecution history estoppel can bar challenges to a wide range of equivalents, its reach requires an examination of the subject matter surrendered by the narrowing amendment. The complete bar avoids this inquiry by establishing a per se rule; but that approach is inconsistent with the purpose of applying the estoppel in the first place—to hold the inventor to the representations made

17. Id. at 734–35. 18. Festo Corp. v. Shoketsu Kinzoku Kogyo Kabushiki Co., 234 F.3d 558 (Fed. Cir. 2000) (en banc), vacated and remanded, Festo Corp. v. Shoketsu Kinzoku Kogyo Kabushiki Co., 535 U.S. 722, 122 S. Ct. 1831 (2002). 19. Id. at 574–75.

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Chapter 4 Patent Law Principle II: Infringement during the application process and to the inferences that may reasonably be drawn from the amendment. By amending the application, the inventor is deemed to concede that the patent does not extend as far as the original claim. It does not follow, however, that the amended claim becomes so perfect in its description that no one could devise an equivalent. After amendment, as before, language remains an imperfect fit for invention. The narrowing amendment may demonstrate what the claim is not; but it may still fail to capture precisely what the claim is. There is no reason why a narrowing amendment should be deemed to relinquish equivalents unforeseeable at the time of the amendment and beyond a fair interpretation of what was surrendered. Nor is there any call to foreclose claims of equivalence for aspects of the invention that have only a peripheral relation to the reason the amendment was submitted. The amendment does not show that the inventor suddenly had more foresight in the drafting of claims than an inventor whose application was granted without amendments having been submitted. It shows only that he was familiar with the broader text and with the difference between the two. As a result, there is no more reason for holding the patentee to the literal terms of an amended claim than there is for abolishing the doctrine of equivalents altogether and holding every patentee to the literal terms of the patent.20

Section III[A] below discusses the resolution of the Festo line of cases and the current state of the law of the doctrine of equivalents regarding prosecution history estoppel.

B. Determination of Equivalents Involves Construing the Scope of Potential Equivalents of Claim Limitations, an Exercise That Is Strictly Different From Claim Construction for Literal Infringement A very important issue to always keep in mind when determining patent infringement is the distinction between claim construction for literal infringement (generally referred to simply as “claim construction,” which is covered in detail in Chapter 2), and a determination of the scope of a claim for purposes of infringement under the doctrine of equivalents. These are two entirely separate exercises. As discussed in Chapter 2, claim construction is the determination of the literal scope of a patent’s claims.21 To do so requires consideration of the ordinary meaning in the art of a claim’s terms and the way the patentee may have affected that meaning through express definitions, as well as how the terms

20. Festo Corp. v. Shoketsu Kinzoku Kogyo Kabushiki Co., 535 U.S. 722, 737–38, 122 S. Ct. 1831 (2002) (citations omitted, emphasis added). 21. Chapter 2; Phillips v. AWH Corp., 415 F.3d 1303 (Fed. Cir. 2005) (en banc).


are used in the specification, prosecution history, and other claims (the intrinsic evidence).22 The result of claim construction is a determination of the proper scope of claims for literal infringement. Determination of the scope of a claim under the doctrine of equivalents builds from this basis of defining a claim’s literal scope in that a determination is made as to what, if any, additional scope the claim may cover under the doctrine of equivalents. As an example of the differences between claim construction for literal infringement and a determination of the scope of a claim for purposes of infringement under the doctrine of equivalents, consider the role that the accused infringing product or process plays in the determination of claim scope. As discussed in Chapter 2, consideration of the accused infringing product or process is not proper in claim construction (i.e., in determining the literal scope of a claim).23,24 However, as discussed below (e.g., for prosecution history estoppel as in Section III[A]), the accused infringing product or process may play a critical role in the determination of the scope of a claim for purposes of infringement under the doctrine of equivalents.25

C. Burden of Proof To prove infringement, the patentee must demonstrate by a preponderance of the evidence that an accused infringing device, product, or process has every claim limitation, literally or under the doctrine of equivalents.26

D. Questions of Fact and Law A determination of infringement under the doctrine of equivalents is a question of fact, decided by the trier of fact.27 However, issues such as prosecution

22. Id. 23. Exigent Tech., Inc. v. Atrana Solutions, Inc., 442 F.3d 1301, 1310 n.10 (Fed. Cir. 2006) (A “claim is construed in the light of the claim language . . . not in light of the accused device.”) (quoting SRI Int’l v. Matsushita Elec. Corp. of Am., 775 F.2d 1107, 1118 (Fed. Cir. 1985) (en banc)) (alteration and emphasis in original). 24. As discussed in Chapter 2, the accused infringing product or process may be considered in determining literal infringement of means-plus-function claims. However, this is not in fact a clear exception to the general rule that the accused product or process plays no role in claim construction for literal infringement. This is true because construing means-plus-function claims for literal infringement involves considerations similar to those used in determining claim scope under the doctrine of equivalents. 25. Id. 26. E.g., PSC Computer Prods., Inc. v. Foxconn Int’l, Inc., 355 F.3d 1353, 1357 (Fed. Cir. 2004); Carroll Touch, Inc. v. Electro Mech. Sys, Inc., 15 F.3d 1573, 1578 (Fed. Cir. 1993). 27. Graver Tank & Mfg. Co., Inc. v. Linde Air Products Co., 339 U.S. 605, 609 (1950); Bai v. L & L Wings, Inc., 160 F.3d 1350, 1353 (Fed. Cir. 1998).

154


history estoppel such as “whether a patent’s prosecution history estops the patentee from arguing an equivalent[,] is an issue of law. . . .”28 As indicated by the Federal Circuit: We have stated on numerous occasions that whether prosecution history estoppel applies, and hence whether the doctrine of equivalents be available for a particular claim limitation, presents a question of law. E.g., Bai v. L&L Wings, Inc., 160 F.3d 1350, 1354 (Fed. Cir. 1998); Cybor Corp. v. FAS Techs., Inc., 138 F.3d 1448, 1460 (Fed. Cir. 1998) (en banc). The Supreme Court has recognized that, as a legal limitation on the application of the doctrine of equivalents, prosecution history estoppel is a matter to be determined by the court. WarnerJenkinson, 520 U.S. at 39 n.8; see also Multiform Desiccants, Inc. v. Medzam, Ltd., 133 F.3d 1473, 1480 (Fed. Cir. 1998) (“The court determines . . . whether there is any estoppel derived from the prosecution history that bars remedy even when there is technologic equivalency. . . .”). Questions relating to the application and scope of prosecution history estoppel thus fall within the exclusive province of the court. Accordingly, the determinations concerning whether the presumption of surrender has arisen and whether it has been rebutted are questions of law for the court, not a jury, to decide.29

II. Defining Equivalents To demonstrate infringement under the doctrine of equivalents, a patent holder must prove that an accused product or process has an element corresponding (either literally or equivalently) to every limitation of an asserted claim. Equivalence is proven by showing that the differences between an element in an accused product or process that is not literally like a claim limitation is, nonetheless, insubstantially different from the claim limitation. One way to determine whether an element is insubstantially different from—and therefore is equivalent to—a claim limitation is the function-way-result test, discussed in Section II[B] below. Importantly, however, under all circumstances proving infringement requires showing that an accused product or process has an element that corresponds, literally or equivalently, to every claim limitation. This is the “all limitations rule.” The section immediately below discusses this rule, with this discussion preceding the discussion of the test for equivalency to emphasize

28. Interactive Pictures Corp. v. Infinite Pictures, Inc., 274 F.3d 1371, 1376 (Fed. Cir. 2001); Warner-Jenkinson Co., Inc. v. Hilton Davis Chemical Co., 520 U.S. 17, 39 n.8 (1997). 29. Festo Corp. v. Shoketsu Kinzoku Kogyo Kabushiki Co., 344 F.3d 1359, 1367–1369 (Fed. Cir. 2003) (emphasis added).

Defining Equivalents 155

the importance of the all limitations rule in determining infringement. Discussion of the test for equivalency then follows in Section II[B].

A. All Limitaions Rule (All Elements Rule; Doctrine of Vitiation) A central prerequisite to any finding of infringement under the doctrine of equivalents is that the accused infringing product or process must have an element corresponding (literally or equivalently) to every claim limitation. This requirement is the “all limitations rule” (sometimes also referred to as the “all elements rule” and the “doctrine of vitiation”). The Supreme Court’s Warner-Jenkinson case firmly established the all limitations rule: We concur with this apt reconciliation of our two lines of precedent. Each element contained in a patent claim is deemed material to defining the scope of the patented invention, and thus the doctrine of equivalents must be applied to individual elements of the claim, not to the invention as a whole. It is important to ensure that the application of the doctrine, even as to an individual element, is not allowed such broad play as to effectively eliminate that element in its entirety.30

As described by the Federal Circuit: The “all elements” rule attempts to balance the doctrine of equivalents with the basic patent law principle that claim language defines the scope of an invention and every limitation is material. . . . Thus, as a practical matter, the “all elements” rule informs a doctrine of equivalents analysis by requiring that equivalence be assessed on a limitation-by-limitation basis, rather than from the perspective of the invention as a whole, and that no limitation be read completely out of the claim.31

The Federal Circuit further explained: In Warner-Jenkinson, the Supreme Court provided guidance for determining when resort to the doctrine of equivalents is precluded as a matter of law. . . . [T]he Court noted that “under the particular facts of a case, . . . if a theory of

30. Warner-Jenkinson, 520 U.S. at 29; Penwalt Corp. v. Durand-Wyland Inc., 833 F.2d 931 (Fed. Cir. 1987). 31. Depuy Spine, Inc. v. Medtronic Sofamor Danek, Inc., 469 F.3d 1005, 1016–17 (Fed. Cir. 2006).

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Chapter 4 Patent Law Principle II: Infringement equivalence would entirely vitiate a particular claim element, partial or complete judgment should be rendered by the court.” Informed by this guidance, we have held that in certain instances, the “all elements” rule forecloses resort to the doctrine of equivalents because, on the facts or theories presented in a case, a limitation would be read completely out of the claim—i.e., the limitation would be effectively removed or “vitiated.” For instance, we have concluded that in some cases, the evidence was such that no reasonable jury could determine a proffered equivalent to be insubstantially different from the claimed limitation. We have also concluded that in some cases, the patentee’s theory of equivalence was legally insufficient because, rather than demonstrate an insubstantial difference between a limitation and an element in the accused device, the theory effectively eliminated a limitation in its entirety. See, e.g., Tronzo, 156 F.3d at 1160 (holding that the patentee’s theory of equivalence—that “any shape would be equivalent to the conical limitation”— would write such a limitation out of the claims (emphasis in original)).32

However, the Federal Circuit has also cautioned against misapplication of the all limitations rule: It is important to note that when we have held that the doctrine of equivalents cannot be applied to an accused device because it “vitiates” a claim limitation, it was not to hold that the doctrine is always foreclosed whenever a claim limitation does not literally read on an element of an accused device; such an interpretation of the “all elements” rule would swallow the doctrine of equivalents entirely. A holding that the doctrine of equivalents cannot be applied to an accused device because it “vitiates” a claim limitation is nothing more than a conclusion that the evidence is such that no reasonable jury could conclude that an element of an accused device is equivalent to an element called for in the claim, or that the theory of equivalence to support the conclusion of infringement otherwise lacks legal sufficiency.33

Therefore, in proving infringement under the doctrine of equivalents, a patentee must show that an accused product or process contains an element corresponding to every limitation of the infringed claim, either literally or equivalently. It therefore follows that a product or process cannot infringe a claim when the product or process is entirely missing at least one element that literally corresponds to a claim limitation and in which there is nothing in the

32. Id. at 1017 (some citations omitted). 33. Id. at 1018–19 (citations omitted); Abbott Labs. v. Andrx Pharms., Inc., 473 F.3d 1196, 1212 (Fed. Cir. 2007) (“A claim element is not vitiated merely because it does not literally exist in the accused product—‘such an interpretation of the ‘all elements’ rule would swallow the doctrine of equivalents entirely’ ”) (quoting Depuy Spine, 469 F.3d at 1018).

Defining Equivalents 157

accused product or process that is equivalent to the literally missing claim limitation.34 Put another way, in order to infringe, an accused product or process must have an element for every claim limitation, and the elements must be identical, or equivalent to, the corresponding claim limitations.

B. Insubstantial Differences; Function-Way-Result; Interchangeability The test for determining whether an element in an accused product or process is equivalent to a claim limitation is whether the differences between the two are insubstantial to one of ordinary skill in the art.35 One way to determine whether an element is equivalent to the claim limitation is the functionway-result test.36 As described by the Federal Circuit, “[i]nsubstantiality may be determined by whether the accused device ‘performs substantially the same function in substantially the same way to obtain the same result’ as the claim limitation.”37 The Federal Circuit has further held “an accused device which does not perform th[e] central function [of the claim limitation] could rarely, if ever, be considered to be insubstantially changed from the claimed invention.”38 Additionally, courts have held that “a skilled practitioner’s knowledge of the interchangeability between claimed and accused elements” can inform “the fact-finder about the similarities or differences between those elements.”39 Further, a pioneer patent, which is a distinct step in the progress of the art, may be entitled to a broader range of equivalents than an improvement or a

34. E.g., Bell Atlantic Network Services, Inc. v. Covad Communications Group, Inc., 262 F.3d 1258, 1270–80 (Fed. Cir. 2001) (“under the ‘all elements rule,’ there can be no infringement under the doctrine of equivalents if even one element of a claim or its equivalent is not present in the accused device.”); Amstar Corp. v. Envirotech Corp., 730 F.2d 1476, 1484 (Fed. Cir. 1984) (“the long-established legal principle that non-infringement is shown when an element or step in the claims is missing from the accused product or process . . .”); Cooper Cameron Corp. v. Kvaerner Oilfield Prod., 291 F.3d 1317 (Fed. Cir. 2002). 35. Warner-Jenkinson, 520 U.S. at 40; Catalina Mktg. Int’l v. Coolsavings.com, Inc., 289 F.3d 801, 812 (Fed. Cir. 2002). 36. Gravier Tank & Mfg. Co. v. Linde Air Products, 339 U.S. 605, 608, 94 L. Ed. 1097, 70 S. Ct. 854 (1950); Catalina Mktg., 289 F.3d at 813. 37. Catalina Mktg., 289 F.3d at 813 (quoting Graver Tank, 339 U.S. at 608). 38. Vehicular Techs. Corp. v. Titan Wheel Int’l, Inc., 212 F.3d 1377, 1382 (Fed. Cir. 2000). 39. Warner-Jenkinson, 520 U.S. at 36–37 (“[K]nown interchangeability . . . for an element of a patent is one of the express objective factors . . . bearing upon whether the accused device is substantially the same as the patented invention.”); Graver Tank, 339 U.S. at 609 (“An important factor [in determining equivalency] is whether persons reasonably skilled in the art would have known of the interchangeability.”).

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refinement patent.40 In contrast, a patent in a crowded field may only be entitled to a narrow range of equivalents.41

III. Limitations on the Doctrine of Equivalents There are several limitations on the application of the doctrine of equivalents. These include the all limitations rule (also known as the all elements rule and the doctrine of vitiation, discussed in Section II[A] above),42 prosecution history estoppel (both amendment-based and argument-based), exclusion, disclosure-dedication, prior art limitations, and several others that act to limit the scope, reach, and application of the doctrine of equivalents.

A. Prosecution History Estoppel Prosecution history estoppel is perhaps the greatest limitation on the application of the doctrine of equivalents. As discussed below, this estoppel may limit a patentee’s ability to assert infringement under the doctrine of equivalents based on two events: narrowing amendments (amendment-based estoppel), and statements made during prosecution (argument-based estoppel). A series of Federal Circuit cases and a U.S. Supreme Court case (collectively called the Festo line of cases) have confirmed the vitality and application of prosecution history estoppel as a serious limitation on the application of the doctrine of equivalents, particularly regarding amendment-based estoppel. In one of the Festo cases, the Supreme Court described the basis for prosecution history estoppel: Prosecution history estoppel ensures that the doctrine of equivalents remains tied to its underlying purpose. Where the original application once embraced the purported equivalent but the patentee narrowed his claims to obtain the patent or to protect its validity, the patentee cannot assert that he lacked the words to describe the subject matter in question. The doctrine of equivalents is

40. Hoganas AB v. Dresser Indus. Inc., 9 F.3d 948, 954 (Fed. Cir. 1993). 41. Slimfold Mfg. Co., Inc. v. Kinkead Indus., Inc., 932 F.2d 1453, 1457 (Fed. Cir. 1991). 42. Section II[A] above; e.g., Bell Atlantic Network Services, Inc. v. Covad Communications Group, Inc., 262 F.3d 1258, 1270–80 (Fed. Cir. 2001) (“under the ‘all elements rule,’ there can be no infringement under the doctrine of equivalents if even one element of a claim or its equivalent is not present in the accused device.”); Amstar Corp. v. Envirotech Corp., 730 F.2d 1476, 1484 (Fed. Cir. 1984) (“the long-established legal principle that non-infringement is shown when an element or step in the claims is missing from the accused product or process . . .”); Cooper Cameron Corp. v. Kvaerner Oilfield Prod., 291 F.3d 1317 (Fed. Cir. 2002).

Limitations on the Doctrine of Equivalents 159 premised on language’s inability to capture the essence of innovation, but a prior application describing the precise element at issue undercuts that premise. In that instance the prosecution history has established that the inventor turned his attention to the subject matter in question, knew the words for both the broader and narrower claim, and affirmatively chose the latter.43

1. Amendment-Based Prosecution History Estoppel Amendment-based prosecution history estoppel arises when a patentee makes a narrowing amendment during prosecution, and due to the circumstances of the amendment, the patentee is deemed to have surrendered from the scope of possible equivalents any accused infringing subject matter falling within the scope of the narrowed subject matter.44 Under the Festo line of cases, any narrowing amendment made for a substantial reason related to patentability presumably surrenders the subject matter between the original claim scope and the narrowed claim scope.45 A narrowing amendment made for a “substantial reason related to patentability” includes virtually any amendment made in response to any patent office rule, regulation, or examiner rejection, objection, or even comment.46 Further, a narrowing amendment is deemed to have been “made for a ‘substantial reason related to patentability’ when the record does not reveal the reason for the amendment.”47 “When the court is unable to determine the purpose underlying a narrowing amendment—and hence a rationale for limiting the estoppel to the surrender of particular equivalents—the court should presume that the patentee surrendered all subject matter between the broader and the narrower language.”48 As indicated by the Federal Circuit: Thus, the Warner-Jenkinson and Festo presumptions operate together in the following manner: The first question in a prosecution history estoppel inquiry is whether an amendment filed in the Patent and Trademark Office (“PTO”) has narrowed the literal scope of a claim. Pioneer Magnetics, Inc. v. Micro Linear Corp., 330 F.3d 1352, 1356 (Fed. Cir. 2003). If the amendment was not narrowing, then prosecution history estoppel does not apply. But if the accused infringer establishes that the amendment was a narrowing one, then the second

43. Festo Corp. v. Shoketsu Kinzoku Kogyo Kabushiki Co., 535 U.S. 722, 734–35, 122 S. Ct. 1831 (2002). 44. E.g., Warner-Jenkinson, 520 U.S. at 40–41; Festo, 535 U.S. at 734–35. 45. Festo Corp. v. Shoketsu Kinzoku Kogyo Kabushiki Co., 344 F.3d 1359, 1366 (Fed. Cir. 2003). 46. Id. (“[A] narrowing amendment made to comply with any provision of the Patent Act, including § 112, may invoke an estoppel.”). 47. Id. 48. Id. (quoting Festo, 535 U.S. at 740).

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Chapter 4 Patent Law Principle II: Infringement question is whether the reason for that amendment was a substantial one relating to patentability. See id. When the prosecution history record reveals no reason for the narrowing amendment, Warner-Jenkinson presumes that the patentee had a substantial reason relating to patentability; consequently, the patentee must show that the reason for the amendment was not one relating to patentability if it is to rebut that presumption. See id. (citing Warner-Jenkinson, 520 U.S. at 33). In this regard, we reinstate our earlier holding that a patentee’s rebuttal of the Warner-Jenkinson presumption is restricted to the evidence in the prosecution history record. Festo VI, 234 F.3d at 586 & n.6; see also Pioneer Magnetics, 330 F.3d at 1356 (stating that only the prosecution history record may be considered in determining whether a patentee has overcome the Warner-Jenkinson presumption, so as not to undermine the public notice function served by that record). If the patentee successfully establishes that the amendment was not for a reason of patentability, then prosecution history estoppel does not apply. If, however, the court determines that a narrowing amendment has been made for a substantial reason relating to patentability—whether based on a reason reflected in the prosecution history record or on the patentee’s failure to overcome the Warner-Jenkinson presumption—then the third question in a prosecution history estoppel analysis addresses the scope of the subject matter surrendered by the narrowing amendment. See Pioneer Magnetics, 330 F.3d at 1357. At that point Festo VIII imposes the presumption that the patentee has surrendered all territory between the original claim limitation and the amended claim limitation. See Festo VIII, 535 U.S. at 740. The patentee may rebut that presumption of total surrender by demonstrating that it did not surrender the particular equivalent in question according to the criteria discussed below. Finally, if the patentee fails to rebut the Festo presumption, then prosecution history estoppel bars the patentee from relying on the doctrine of equivalents for the accused element. If the patentee successfully rebuts the presumption, then prosecution history estoppel does not apply and the question whether the accused element is in fact equivalent to the limitation at issue is reached on the merits.49

When a narrowing amendment is presumed to have surrendered the narrowed subject matter, the “patentee bears the burden of showing that a narrowing amendment did not surrender a particular equivalent.”50 “[A] patentee may rebut the presumption of surrender by showing that ‘at the time of the amendment one skilled in the art could not reasonably be expected to

49. Id. at 1366–67. 50. Id. at 1369.

Limitations on the Doctrine of Equivalents 161

have drafted a claim that would have literally encompassed the alleged equivalent.’”51 Specifically, a patentee may overcome the presumption of surrender in three ways.52 First, a patentee may demonstrate that the alleged equivalent would have been unforeseeable at the time of the narrowing amendment. Second, a patentee may demonstrate that the rationale underlying the narrowing amendment bore no more than a tangential relation to the accused equivalent. Third, a patentee may demonstrate that there was “some other reason” suggesting that the patentee could not reasonably have been expected to describe the alleged equivalent.53 The Federal Circuit explained the first rebuttal, unforeseeability, as follows: The first criterion requires a patentee to show that an alleged equivalent would have been “unforeseeable at the time of the amendment and thus beyond a fair interpretation of what was surrendered.” This criterion presents an objective inquiry, asking whether the alleged equivalent would have been unforeseeable to one of ordinary skill in the art at the time of the amendment. Usually, if the alleged equivalent represents later-developed technology (e.g., transistors in relation to vacuum tubes, or Velcro (R) in relation to fasteners) or technology that was not known in the relevant art, then it would not have been foreseeable. In contrast, old technology, while not always foreseeable, would more likely have been foreseeable. Indeed, if the alleged equivalent were known in the prior art in the field of the invention, it certainly should have been foreseeable at the time of the amendment. See Pioneer Magnetics, 330 F.3d at 1357. By its very nature, objective unforeseeability depends on underlying factual issues relating to, for example, the state of the art and the understanding of a hypothetical person of ordinary skill in the art at the time of the amendment. Therefore, in determining whether an alleged equivalent would have been unforeseeable, a district court may hear expert testimony and consider other extrinsic evidence relating to the relevant factual inquiries.54

The Court went on to explain the second rebuttal, that “the rationale underlying the narrowing amendment [bore] no more than a tangential relation to the equivalent in question,” as follows: The second criterion requires a patentee to demonstrate that “the rationale underlying the narrowing amendment [bore] no more than a tangential relation

51. 52. 53. 54.

Id. (quoting Festo, 535 U.S. at 741). Id. Id. Id. (some citations omitted).

162 Chapter 4 Patent Law Principle II: Infringement to the equivalent in question.” In other words, this criterion asks whether the reason for the narrowing amendment was peripheral, or not directly relevant, to the alleged equivalent. See The American Heritage College Dictionary 1385 (3d ed. 1997) (defining “tangential” as “merely touching or slightly connected” or “only superficially relevant; divergent”); 2 The New Shorter Oxford English Dictionary 3215–16 (1993) (defining “tangential” as “merely touching a subject or matter; peripheral”). Although we cannot anticipate the instances of mere tangentialness that may arise, we can say that an amendment made to avoid prior art that contains the equivalent in question is not tangential; it is central to allowance of the claim. See Pioneer Magnetics, 330 F.3d at 1357. Moreover, much like the inquiry into whether a patentee can rebut the Warner-Jenkinson presumption that a narrowing amendment was made for a reason of patentability, the inquiry into whether a patentee can rebut the Festo presumption under the “tangential” criterion focuses on the patentee’s objectively apparent reason for the narrowing amendment. As we have held in the Warner-Jenkinson context, that reason should be discernible from the prosecution history record, if the public notice function of a patent and its prosecution history is to have significance. See id. at 1356 (“Only the public record of the patent prosecution, the prosecution history, can be a basis for [the reason for the amendment to the claim]. Otherwise, the public notice function of the patent record would be undermined.”); (“In order to give due deference to public notice considerations under the Warner-Jenkinson framework, a patent holder seeking to establish the reason for an amendment must base his arguments solely upon the public record of the patent’s prosecution, i.e., the patent’s prosecution history. To hold otherwise—that is, to allow a patent holder to rely on evidence not in the public record to establish a reason for an amendment—would undermine the public notice function of the patent record.”). Moreover, whether an amendment was merely tangential to an alleged equivalent necessarily requires focus on the context in which the amendment was made; hence the resort to the prosecution history. Thus, whether the patentee has established a merely tangential reason for a narrowing amendment is for the court to determine from the prosecution history record without the introduction of additional evidence, except, when necessary, testimony from those skilled in the art as to the interpretation of that record.55

Finally, the Federal Circuit explained the third rebuttal, “some other reason suggesting that the patentee could not reasonably be expected to have described the insubstantial substitute in question,” as follows: The third criterion requires a patentee to establish “some other reason suggesting that the patentee could not reasonably be expected to have described the

55. Id. at 1369–70 (some citations omitted).

Limitations on the Doctrine of Equivalents 163 insubstantial substitute in question.” This category, while vague, must be a narrow one; it is available in order not to totally foreclose a patentee from relying on reasons, other than unforeseeability and tangentialness, to show that it did not surrender the alleged equivalent. Thus, the third criterion may be satisfied when there was some reason, such as the shortcomings of language, why the patentee was prevented from describing the alleged equivalent when it narrowed the claim. When at all possible, determination of the third rebuttal criterion should also be limited to the prosecution history record. For example, as we recently held in Pioneer Magnetics, Inc. v. Micro Linear Corp., 330 F.3d 1352 (Fed. Cir. 2003), a patentee may not rely on the third rebuttal criterion if the alleged equivalent is in the prior art, for then “there can be no other reason the patentee could not have described the substitute in question.” Id. at 1357.56

There have been very few Federal Circuit cases holding that a patentee successfully rebutted a Festo presumption of surrender. One such case, Conoco v. Energy & Environmental, held that a narrowing amendment occurred for a reason unrelated to patentability.57 The court stated: Here, there was an examiner’s amendment to add the fatty acid wax limitation to one of the claims. Conoco maintains that the amendment was not related to patentability, but rather added merely to correct an obvious omission. We agree and therefore find no error in the district court’s finding. Each of the 16 original claims of the ’151 patent application limited the partitioning agent to a fatty acid wax directly or through relation to an independent claim. Throughout the prosecution history, the examiner and applicants focused their attention on the meaning of the “fatty acid wax” limitation as compared to metal stearate partitioning agents. Moreover, once the applicants cancelled the original claims and submitted 22 new claims, all but the first claim lacked the fatty acid wax limitation—presumably making the new claims broader than originally argued. Nevertheless, the examiner and applicants continued to focus their arguments as if the limitation was present, arguing the difference between fatty acid waxes and metal stearates. Such evidence indicates that the amendment was the correction of an inadvertent omission rather than the intentional narrowing of a broad claim for patentability purposes. Thus, the district court did not err by finding that the claim was not amended for purposes of patentability.58

In another case, Insituform Techs., Inc. v. Cat Contracting, the Federal Circuit held that the Festo presumption was rebutted because “the rationale

56. Id. at 1370 (some citations omitted). 57. Conoco, Inc. v. Energy & Envtl. Int’l, L.C., 460 F.3d 1349, 1364 (Fed. Cir. 2006). 58. Id.

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underlying the narrowing amendment [bore] no more than a tangential relation to the equivalent in question.”59 The court explained: In our view, Insituform has rebutted the Festo presumption. The prosecution history and our discussion of that history in Insituform I and II compel the conclusion that the amendment limiting the literal scope of claim 1 to a single cup process bears “only a tangential relation,” if that, “to the equivalent in question,” a process using multiple cups. The question we must address is “whether the reason for the narrowing amendment was peripheral, or not directly releant, to the alleged equivalent.” Festo III, 344 F.3d at 1365. As the discussion above indicates, the narrowing amendment in this case was for the purpose of distinguishing the invention over Everson. Insituform made it clear that the difference between its process and Everson was that its process did not have the disadvantage of the Everson process of a large compressor at the end of the liner. There is no indication in the prosecution history of any relationship between the narrowing amendment and a multiple cup process, which is the alleged equivalent in this case. Thus, we hold that plaintiffs have successfully rebutted the Festo presumption by establishing that the amendment narrowing the claimed invention from multiple cups to a single cup was tangential to accused Process 1, which used multiple cups attached at different points along the liner tube. We therefore affirm the judgment of infringement under the doctrine of equivalents.60

However, in IXYS, the Federal Circuit held that an amendment was not “only tangentially related to the equivalency of a structure,” finding: [The patentee’s] decision to claim that structure using the limiting term “adjoining,” whether or not required to overcome the rejection, cannot be described as only tangentially related to the equivalency of a structure with non-adjoining regions. With the amended language, IR recited precisely the structure it disclosed, and thereby overcame the examiner’s § 112 rejection. See Schwarz Pharma, Inc. v. Paddock Labs., Inc., 504 F.3d 1371, 1377 (Fed. Cir. 2007) (“The fact that the inventors may have thought after the fact that they could have relied on other distinctions in order to defend their claims is irrelevant and speculative. . . .”).61

2. Argument-Based Prosecution History Estoppel Even without a narrowing amendment, the prosecution history of a patent may preclude expansion of the claims under the doctrine of equivalents to

59. Insituform Techs., Inc. v. Cat Contr., Inc., 385 F.3d 1360, 1371 (Fed. Cir. 2004). 60. Id. (emphasis added). 61. Int’l Rectifier Corp. v. IXYS Corp., 515 F.3d 1353, 1359 (Fed. Cir. 2008).


cover subject matter that the patentee clearly and unmistakably surrendered during prosecution.62 However, in likening argument-based estoppel to prosecution disclaimer in claim construction,63 the Federal Circuit has repeatedly emphasized that in order to limit the doctrine of equivalents, the evidence for argument-based estoppel must be clear and unmistakable, as is required for prosecution disclaimer in claim construction. For example, the court has held: AVE argues on appeal that the citation to the Antonsson affidavit during reexamination of the ’762 patent created an argument-based estoppel. We reject AVE’s argument to preclude infringement of the limitation through an equivalent. To invoke argument-based estoppel, the prosecution history must evince a “clear and unmistakable surrender of subject matter.” Litton Sys., Inc. v. Honeywell, Inc., 140 F.3d 1449, 1458 (Fed. Cir. 1998). Just as the Antonsson affidavit failed to serve as a clear and unmistakable disclaimer in the claim construction analysis, it also fails to serve as a clear and unmistakable surrender of anything greater than 0.001 inch to bar coverage through the doctrine of equivalents. We have noted that the prosecution disclaimer standard “is the same standard applicable, in the context of doctrine of equivalents, to the doctrine of argument-based estoppel . . . and that our precedent has recognized a relation between the doctrines of argumentbased estoppel and prosecution disclaimer.” Omega Eng’g, slip op. at 17 n.1.64

Deering Precision Instrument is an example of a typical case in which the Federal Circuit found that arguments made by the patentee during prosecution, without accompanying narrowing amendments, did not rise to the level of clear and unmistakable surrender: With respect to argument-based estoppel, Vector contends that arguments made during prosecution estop Deering from asserting infringement under the doctrine of equivalents. “To invoke argument-based estoppel, the prosecution history must evince a ‘clear and unmistakable surrender of subject matter.’“ Eagle Comtronics, Inc. v. Arrow Communication Labs., Inc., 305 F.3d 1303, 1316 (Fed. Cir. 2002) (quoting Pharmacia & Upjohn Co. v. Mylan Pharms., Inc., 170 F.3d 1373, 1376–77 (Fed. Cir. 1999)).

62. E.g., Cordis Corp. v. Medtronic AVE, Inc., 339 F.3d 1352, 1363 (Fed. Cir. 2003) (“To invoke argument-based estoppel, the prosecution history must evince a ‘clear and unmistakable surrender of subject matter’”) (quoting Litton Sys., Inc. v. Honeywell, Inc., 140 F.3d 1449, 1458 (Fed. Cir. 1998)); Eagle Comtronics, Inc. v. Arrow Communication Labs., Inc., 305 F.3d 1303, 1316 (Fed. Cir. 2002); Pharmacia & Upjohn Co. v. Mylan Pharms., Inc., 170 F.3d 1373, 1376– 77 (Fed. Cir. 1999). 63. Chapter 2. 64. Cordis, 339 F.3d at 1363 (emphasis added).

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Chapter 4 Patent Law Principle II: Infringement As described above, the Examiner objected to original claim 9 and indicated its allowability if rewritten in independent form although original claim 9 was already in independent form. In response, the applicants noted the Examiner’s mistake and restated the Zero Position Limitation as not being disclosed in the references of record. This statement is merely a clarification of the Examiner’s mistake, not the “clear and unmistakable surrender of subject matter” required by this court in Eagle Comtronics. Accordingly, we hold that argument- based estoppel was not a proper basis for applying prosecution history estoppel. Upon remand, should Deering adequately rebut the presumption discussed above, Deering shall not be estopped from arguing that the VX-10 infringes claim 4 of the ’428 patent based on arguments made in prosecution.65

B. Exclusion The doctrine of equivalents can be limited or precluded through exclusion. “[A] particular structure can be deemed outside the reach of the doctrine of equivalents because that structure is clearly excluded from the claims whether the exclusion is express or implied.”66 For example, exclusion occurs through criticism of prior art as being beyond the scope of the claimed invention, specific exclusion of subject matter from the scope of the claimed invention, or determination that an alleged equivalent is “the very antithesis” of the claimed subject matter.67,68 In L.B. Plastics v. Amerimax Home Products, the Federal Circuit summarized this limitation to the doctrine of equivalents as follows: We have held that when a specification excludes certain prior art alternatives from the literal scope of the claims and criticizes those prior art alternatives, the patentee cannot then use the doctrine of equivalents to capture those alterna-

65. Deering Precision Instruments, L.L.C. v. Vector Distrib. Sys., 347 F.3d 1314, 1327 (Fed. Cir. 2003) (emphasis added). 66. SciMed Life Sys., Inc. v. Advanced Cardiovascular Sys., Inc., 242 F.3d 1337, 1345 (Fed. Cir. 2001). 67. Moore U.S.A., Inc. v. Standard Register Co., 229 F.3d 1091, 1106 (Fed. Cir. 2000). 68. There is also one rather unusual Federal Circuit case, Cohesive Techs., in which the Federal Circuit construed the literal scope of a claim to “about 30 μm” to include “functional equivalents” within the literal construction of the claim for literal infringement. The Court then held that the patentees were not entitled to the doctrine of equivalents because: “The ‘about 30 μm’ limitation already literally encompasses diameters that are equivalent to 30 μm in the context of the patent, any particle diameter that performs the same function, in the same way, with the same result as a 30 μm diameter is already within the literal scope of the claim.” Cohesive Techs., Inc. v. Waters Corp., 543 F.3d 1351, 1372 (Fed. Cir. 2008). However, with the exception of means-plus-function claims (as discussed below), this appears to be the only Federal Circuit case to render such a holding.

Limitations on the Doctrine of Equivalents 167 tives. In Dawn Equipment Co. v. Kentucky Farms Inc., 140 F.3d 1009 (Fed. Cir. 1998), we described as “damning evidence” the fact that the specification of the patent-in-suit noted the disadvantages of prior art “multi-hole pinned height adjustment mechanisms” in devices for adjusting the height of farm implements and described the mechanism provided by the patented invention as solving such problems. Id. at 1016. We concluded that the patentee could not resort to the doctrine of equivalents to establish infringement, when the accused device used the same mechanism as the criticized prior art devices. Id. at 1016–17. In SciMed Life Sys., Inc. v. Advanced Cardiovascular Sys., Inc., 242 F.3d 1337 (Fed. Cir. 2001), we concluded that because the common specification of the patentsin-suit “referred to prior art catheters, identified them as using [the same configuration used by the accused device], and criticized them as suffering from [several] disadvantages,” the doctrine of equivalents was unavailable to recapture the catheters. Id. at 1345. “Having specifically identified, criticized, and disclaimed the dual lumen configuration, the patentee cannot now invoke the doctrine of equivalents to embrace a structure that was specifically excluded from the claims.” Id. (internal quotation marks omitted). Similarly, in Schwing GmbH v. Putzmeister Aktiengesellschaft, 305 F.3d 1318 (Fed. Cir. 2002), we noted that the patent-in-suit criticized “the use of embedded metal rings in the prior art,” and concluded that “Schwing cannot now overlook that deliberate decision and reclaim that subject matter through the doctrine of equivalents.” Id. at 1329; see also Astrazeneca AB v. Mutual Pharm. Co., 384 F.3d 1333, 1340, 1342 (Fed. Cir. 2004); Gaus v. Conair Corp., 363 F.3d 1284, 1291 (Fed. Cir. 2004); J & M Corp. v. Harley-Davidson, Inc., 269 F.3d 1360, 1369 (Fed. Cir. 2001).69

Applying this law, the L.B. Plastics court held: The rule of these cases applies here as well. The specification of the ’700 patent criticizes prior art attachment means, stating that “[t]he attachment means used in other prior art gutter guards . . . is generally less effective, and more costly, time consuming, and labor intensive.” The specification emphasizes that the “novel construction” of the invention, by contrast, “facilitates an effective and secure attachment.” There is no question but that the prior art attachment means included adhesives; thus the specification must be read to criticize the use of adhesives as attachment means. . . . [S]ince the patentee elected to distinguish prior art attachment means and to limit its claim to continuous welded attachments, a person of ordinary skill in the field of the invention reading the specification would clearly conclude that the inventor thought that adhesive attachments generally were undesirable. Under these circumstances L.B. Plastics cannot now use the doctrine of equivalents to include adhesive attachments.70

69. L.B. Plastics, Inc. v. Amerimax Home Prods., 499 F.3d 1303, 1309 (Fed. Cir. 2007). 70. Id. at 1309–10 (citations omitted).

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In Moore U.S.A., Inc. v. Standard Register the Federal Circuit stated “it would defy logic to conclude that a minority—the very antithesis of a majority—could be insubstantially different from a claim limitation requiring a majority, and no reasonable juror could find otherwise.”71 The Federal Circuit has explained that the exclusion limitation on the doctrine of equivalents bears similarity to the all limitations rule: The principle articulated in these cases is akin to the familiar rule that the doctrine of equivalents cannot be employed in a manner that wholly vitiates a claim limitation. See Warner-Jenkinson Co. v. Hilton Davis Chem. Co., 520 U.S. 17, 29–30, 137 L. Ed. 2d 146, 117 S. Ct. 1040 (1997); Athletic Alternatives, 73 F.3d at 1582 (“specific exclusion” principle is “a corollary to the ‘all limitations’ rule”). Thus, if a patent states that the claimed device must be “non-metallic,” the patentee cannot assert the patent against a metallic device on the ground that a metallic device is equivalent to a non-metallic device. The unavailability of the doctrine of equivalents could be explained either as the product of an impermissible vitiation of the “non-metallic” claim limitation, or as the product of a clear and binding statement to the public that metallic structures are excluded from the protection of the patent. As the court made clear in Sage, the foreclosure of reliance on the doctrine of equivalents in such a case depends on whether the patent clearly excludes the asserted equivalent structure, either implicitly or explicitly.72

C. Dedication-Disclosure Rule Under the disclosure-dedication rule, subject matter that is disclosed in a patent’s specification and described as being alternative to the claimed subject matter (but that is not itself literally claimed) is not within the scope of the doctrine of equivalents. The patentee dedicates to the public the disclosed and unclaimed subject matter. As stated by the court in PSC Computer Products: The ability to discern both what has been disclosed and what has been claimed is the essence of public notice. It tells the public which products or processes would infringe the patent and which would not. Were the patentee allowed to reclaim some specifically-disclosed-but-unclaimed matter under the doctrine of equivalents, the public would have no way of knowing which disclosed matter infringed and which did not. See Festo Corp. v. Shoketsu Kinzoku Kogyo Kabushiki Co., 344 F.3d 1359, 1369–70 (Fed. Cir. 2003) (en banc). Such a reclamation would

71. Moore, 229 F.3d at 1106. 72. SciMed, 242 F.3d at 1346–47.

Limitations on the Doctrine of Equivalents 169 eviscerate the public notice function of patents and create uncertainty in the law. Id.73

An important aspect of the disclosure-dedication rule is that “before unclaimed subject matter is deemed to have been dedicated to the public, that unclaimed subject matter must have been identified by the patentee as an alternative to a claim limitation.”74

D. Prior Art and the Hypothetical Claim The scope of equivalents of a claim cannot be expanded to cover subject matter that is unpatentable over the prior art. Wilson and a number of Federal Circuit cases following it have addressed this issue.75 These cases instruct that in order to prevent the scope of coverage under the doctrine of equivalents from covering subject matter unpatentable over the prior art, it is useful to construct a “hypothetical claim.” This hypothetical claim is the scope of the asserted equivalence. If the hypothetical claim is unpatentable over the prior art, the asserted scope of equivalents is not proper under the doctrine of equivalents.76 As stated by the Federal Circuit: It is well settled law that a patentee cannot assert a range of equivalents that encompasses the prior art. To test this limit, the notion of a hypothetical claim may be useful. A hypothetical claim may be constructed to literally cover the accused device. If such a claim would be unpatentable under 35 U.S.C. §§ 102 or 103, then the patentee has overreached, and the accused device is noninfringing as a matter of law. The burden of producing evidence of prior art to challenge a hypothetical claim rests with an accused infringer, but the burden of proving patentability of the hypothetical claim rests with the patentee.77

73. PSC Computer Prods., Inc. v. Foxconn Int’l, 355 F.3d 1353, 1360 (Fed. Cir. 2004); Johnson & Johnston Assocs. Inc. v. R.E. Serv. Co., 285 F.3d 1046 (Fed. Cir. 2005) (en banc); Pfizer, Inc. v. Teva Pharms. USA, Inc., 429 F.3d 1364 (Fed. Cir. 2005). 74. Pfizer, 429 F.3d at 1379. 75. See, e.g., Wilson Sporting Goods v. David Geoffrey & Assoc., 904 F.2d 677, 683 (Fed. Cir. 1990); Interactive Pictures Corp. v. Infinite Pictures, Inc., 274 F.3d 1371, 1380 (Fed. Cir. 2001); Ultra-Tex Surfaces, Inc. v. Hill Bros. Chem. Co., 204 F.3d 1360, 1364–65 (Fed. Cir. 2000); Marquip, Inc. v. Fosber Am., Inc., 198 F.3d 1363, 1367–68 (Fed. Cir. 1999); Streamfeeder, LLC v. Sure-Feed Sys., Inc., 175 F.3d 974, 982–83 (Fed. Cir. 1999). 76. Id. 77. Interactive, 274 F.3d at 1380 (citations omitted).

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E. Means-Plus-Function Claims Usage Note: Chapter 2, Section V[F], discusses the construction of meansplus-function claim limitations in detail. The following section discusses only means-plus-function claim limitations as they relate to infringement under the doctrine of equivalents. Therefore, the reader interested in more information on means-plus-function claim limitations should refer to Chapter 2, Section V[F]. 1. Introduction and Overview Means-plus-function claim terms present an interesting—and unique— exception to the general rules regarding infringement under the doctrine of equivalents. Means-plus-function claims are statutorily defined78 claims that are perhaps the only exception79 to the general rule (discussed in Chapter 3) in which equivalents of the construed subject matter are not considered for literal infringement. For all claims other than means-plus-function claims, a claim is literally infringed only where an accused product or process literally includes every limitation of the claim.80 As any deviation in an accused product or process from the literal scope of the claim precludes literal infringement, infringement (if any) must fall under the doctrine of equivalents. As explained in more detail in Chapter 2, Section V[F] above, meansplus-function claim limitations have two components: a function, and a structure (means) component.81 The structure is the “means for” performing the function. As discussed above in Chapters 2 and 3, literal infringement of the function component follows the same rules as for all claims: Literal infringement of a means-plus-function claim occurs only when an accused device has the identical function. However, things become more complicated regarding literal infringement of the structure component. A means-plus-function claim is literally infringed

78. 35 U.S.C.S. § 112, P 6 (2009). 79. Although, there is one rather unusual Federal Circuit case, Cohesive Techs., in which the Federal Circuit construed the literal scope of a claim to “about 30 μm” to include “functional equivalents” within the literal construction of the claim for literal infringement. The Court then held that the patentees were not entitled to the doctrine of equivalents because: “The ‘about 30 μm’ limitation already literally encompasses diameters that are equivalent to 30 μm in the context of the patent, any particle diameter that performs the same function, in the same way, with the same result as a 30 μm diameter is already within the literal scope of the claim.” Cohesive Techs., Inc. v. Waters Corp., 543 F.3d 1351, 1372 (Fed. Cir. 2008). However, other than means-plus-function claims, this appears to be the only Federal Circuit case to construe the literal scope of claims to include functional equivalents. 80. Id. 81. Means-plus-function limitations in apparatus claims are structure and function limitations. In contrast, means-plus-function limitations in method claims are step and function limitations. The rules for both claims are similar. For purposes of clarity, this section uses the terms structure and function. However, these discussions also apply to method claims having step and structure limitations.


when an accused device has the identical or an equivalent structure, as defined by 35 U.S.C. Section 112, Paragraph 6. As discussed in Chapters 2 and 3, statutory equivalency under 35 U.S.C. Section 112, Paragraph 6 is similar but not identical to the equivalency test under the doctrine of equivalents. Furthermore, if the structure is not identical, literal infringement requires that the structure exist at the time the patent issued. Thus, a means-plus-function claim is literally infringed by an accused device having: (a) identical function; and (b) identical structure, or equivalent structure under Section 112, Paragraph 6, where the structure existed at the time the patent issued. As discussed in more detail below, the function part of a means-plus-function claim is infringed under the doctrine of equivalents where the function of an accused device is not identical to, but is substantially the same, as the claimed function. The equivalency determination falls under the typical doctrine of equivalents test (i.e., insubstantial differences measured by the function-way-result test). As discussed in more detail below, the structure part of a means-plus-function claim is infringed under the doctrine of equivalents only: (a) where the accused device arose after the issue date of the patent; and (b) the structure is not identical to, but is substantially the same, as the claimed structure. The equivalency determination falls under the typical doctrine of equivalents test (i.e., insubstantial differences measured by the function-way-result test). The need for the structure component to have arisen after issuance of the patent in order to infringe under the doctrine of equivalents is the corollary to the rule that only technology arising before issuance of the patent can literally infringe the structure component of a means-plus-function claim term (including under Section 112, Paragraph 6 equivalency). 2. Definition of a Means-Plus-Function Claim Means-plus-function claims82 are those that do not expressly recite a specific structure or material for accomplishing a specified function. Rather, they are typically written as claiming “a means for” accomplishing a specified function. A typical means-plus-function claim is shown below: Claim 11. A saw for cutting concrete . . . comprising: . . . means connected to the saw for supporting the surface of the concrete adjacent the leading edge of the cutting blade to inhibit chipping, spalling, or cracking of the concrete surface during cutting. . . .83

82. There are also step-plus-function claims. These are construed in the same way as meansplus-function claims, except that instead of the specification providing “means for” accomplishing a specified function, it provides “acts for” accomplishing a specified function. 83. Chiuminatta Concrete Concepts, Inc. v. Cardinal Indus. Inc., 145 F.3d 1303, 1305–06 (Fed. Cir. 1998) (emphasis added).

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3. Infringement of Means-Plus-Function Claims Under the Doctrine of Equivalents As discussed in Section V[F] of Chapter 2, means-plus-function claims are unusual claims having both claim construction and infringement rules that are unique to them. This includes having their own type of “equivalency” that differs from the doctrine of equivalents equivalency of this chapter. a) Means-Plus-Function Equivalency (Section 112, Paragraph 6) As discussed in Chapter 3, means-plus-function claims are among the only claims that can be literally infringed by a device having an identical function, but a non-identical yet “equivalent” structure.84 This is because meansplus-function claims have their own form of equivalence that falls within the literal scope of the claim. This means-plus-function equivalence is provided statutorily by 35 U.S.C. Section 112, Paragraph 6, which reads: An element in a claim for a combination may be expressed as a means or step for performing a specified function without the recitation of structure, material, or acts in support thereof, and such claim shall be construed to cover the corresponding structure, material, or acts described in the specification and equivalents thereof.85

As stated by the Federal Circuit: Literal infringement of a claim with a means-plus-function clause requires that the accused device perform a function identical to that identified in the means clause. If it performs the identical function, an accused device literally infringes a claim element under § 112, P 6 only if it is insubstantially different from the corresponding structure in the patent specification.86

Thus as to the Federal Circuit, “an equivalent under § 112, P 6 informs the claim meaning for a literal infringement analysis.”87 b) Equivalency Under the Doctrine of Equivalents The fact that means-plus-function claims have their own version of “equivalency” that defines their literal scope does not mean that the doctrine

84. E.g., Ishida Co., Ltd. v. Taylor, 221 F.3d 1310, 1316–17 (Fed. Cir. 2000). 85. 35 U.S.C.S. § 112, P 6 (2009) (emphasis added). 86. Ishida, 221 F.3d at 1316–17 (citations omitted); In re Donaldson Co., 16 F.3d 1189, 1193–94 (Fed. Cir. 1994) (en banc). 87. Al-Site Corp. v. VSI Int’l, Inc., 174 F.3d 1308, 1320 (Fed. Cir. 1999).


of equivalents does not apply to them as well. However, this application follows its own rules that are unique to these special claims. As explained by the Federal Circuit: The doctrine of equivalents might come into play to determine infringement of a means-plus-function claim element if the accused device features technology that has arisen since the time of the patent issuance. In that instance, the insubstantial difference analysis once again determines infringement, and again requires comparison of the structure corresponding to the function—the literal meaning of the claim element—with the accused structure.88

In Al-Site Corp., the Federal Circuit explained: Thus, an equivalent under § 112, P 6 informs the claim meaning for a literal infringement analysis. The doctrine of equivalents, on the other hand, extends enforcement of claim terms beyond their literal reach in the event “there is ‘equivalence’ between the elements of the accused product or process and the claimed elements of the patented invention” Warner-Jenkinson, 117 S. Ct. at 1045. One important difference between § 112, P 6 and the doctrine of equivalents involves the timing of the separate analyses for an “insubstantial change.” As this court has recently clarified, a structural equivalent under § 112 must have been available at the time of issuance of the claim. See Chiuminatta, 145 F.3d at 1310. An equivalent structure or act under § 112 cannot embrace technology developed after issuance of the patent because the literal meaning of a claim is fixed upon its issuance. An “after arising equivalent” infringes, if at all, under the doctrine of equivalents. See Warner-Jenkinson. . . . Thus the temporal difference between patent issuance and infringement distinguish an equivalent under § 112 from an equivalent under the doctrine of equivalents. See Chiuminatta, 145 F.3d at 1310. In other words, an equivalent structure or act under § 112 for literal infringement must have been available at the time of patent issuance while an equivalent under the doctrine of equivalents may arise after patent issuance and before the time of infringement. Warner-Jenkinson, 117 S. Ct. at 1053. An “after-arising” technology could thus infringe under the doctrine of equivalents without infringing literally as a § 112, P 6 equivalent.2 Furthermore, under § 112, P 6, the accused device must perform the identical function as recited in the claim element while the doctrine of equivalents may be satisfied when the function performed by the accused device is only substantially the same. See Cybor, 138 F.3d at 1456; Hughes Aircraft, 140 F.3d at 1475. 2 These principles, as explained in Chiuminatta Concrete Concepts, Inc. v.

Cardinal Indus., Inc., 145 F.3d 1303 (Fed. Cir. 1998), suggest that title 35 will not produce an “equivalent of an equivalent” by applying both

88. Ishida, 221 F.3d at 1317 (citations omitted).

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Chapter 4 Patent Law Principle II: Infringement § 112 P6 and the doctrine of equivalents to the structure of a given claim element. A proposed equivalent must have arisen at a definite period in time, i.e., either before or after patent issuance. If before, a § 112, P 6 structural equivalents analysis applies and any analysis for equivalent structure under the doctrine of equivalents collapses into the § 112, P 6 analysis. If after, a non-textual infringement analysis proceeds under the doctrine of equivalents. Patent policy supports application of the doctrine of equivalents to a claim element expressed in means-plus-function form in the case of “after-arising” technology because a patent draftsman has no way to anticipate and account for later developed substitutes for a claim element.89

F. Product-by-Process Claims Usage Note: Chapter 2, Section V[G], discusses the construction of productby-process claims in detail. The following Section discusses only product-by-process claims as they relate to infringement under the doctrine of equivalents. Therefore, the reader interested in more information on product-by-process claims should refer to Chapter 2, Section V[G]. As discussed in detail in Section III[F][2] below, the process limitations of product-by-process claims serve as limitations in determining infringement under the doctrine of equivalents. Therefore, a product-by-process claim is infringed under the doctrine of equivalents only by a product that was made by a process that is the same as or equivalent to the process limitations in the claim. A product-by-process claim is not infringed under the doctrine of equivalents by a product that was not made by a process identical or equivalent to the process limitations in the claim, even if the product is otherwise identical or equivalent. A product-by-process claim is “one in which the product is defined at least in part in terms of the method or process by which it is made.”90 While the patent statute does not provide for product-by-process claims, the courts have long recognized the appropriateness of such claims.91 The original purpose of product-by-process claims was to allow inventors to claim “an otherwise patentable product that resists definition by other than the process by which it is made.”92 Thus, the original intention behind product-by-process claims was to prevent an inventor from being foreclosed from the benefits of the

89. Al-Site, 174 F.3d at 1320–21; Welker Bearing Co. v. PHD, Inc., 550 F.3d 1090, 1099–1100 (Fed. Cir. 2008). 90. Bonito Boats, Inc. v. Thunder Craft Boats, Inc., 489 U.S. 141, 158–59 (1989); SmithKline Beecham Corp. v. Apotex Corp., 439 F.3d 1312, 1315 (Fed. Cir. 2006). 91. E.g., In re Thorpe, 777 F.2d 695, 697 (Fed. Cir. 1985). 92. Id.


patent system simply because her or his product was difficult to describe in words, or its structure was insufficiently understood.93 “Today, however, product-by-process claims are used by inventors even if the invention could have been described independent of the process.”94 1. Construing Product-by-Process Claims for Validity As discussed in detail in Chapter 2, Section V[G], for purposes of determining validity of product-by-process claims, and thus also for determining patentability of these claims in the U.S. Patent Office, the law is clear that product-by-process claims are to be construed based only on the product, and not on the process steps.95 2. Construing Product-by-Process Claims for Determining Infringement Under the Doctrine of Equivalents In Abbott Labs. v. Sandoz, Inc., the Federal Circuit finally settled a nearly seventeen-year intra-circuit split on the proper construction of productby-process claims for determining infringement.96 The court sua sponte held en banc that process limitations in product-by-process claims serve as limitations in determining infringement.97 Therefore, a product-by-process claim is infringed under the doctrine of equivalents only by a product that is made by

93. SmithKline, 439 F.3d at 1315. 94. Id.; but cf. SmithKline Beecham Corp. v. Apotex Corp., 453 F.3d 1346 (Fed. Cir. 2006) (reh’g denied, reh’g en banc denied), 453 F.3d 1347 (dissenting opinions) (arguing that there should be two different types of product-by-process claims, one type for known products where the product does not need to be novel but the process limitations of the claim serve as limitations in determining infringement, and another type for products that cannot be claimed without reference to the process by which the product is made, and for which the process limitations do not serve as limitations in determining infringement); See 970 F.2d 834, rehearing en banc denied, 974 F.2d 1299 (concurring opinion), 974 F.2d 1279 (dissenting opinions) (same); Abbott Labs. v. Sandoz, Inc., 2009 U.S. App. LEXIS 10476, *106–7 (Fed. Cir. 2009) (Newman, dissenting) (same); Abbott, 2009 U.S. App. LEXIS 10476, *107–10 (Lourie, dissenting) (same). 95. SmithKline, 439 F.3d at 1317; but see SmithKline, 453 F.3d at 1346 (reh’g denied, reh’g en banc denied), 453 F.3d 1347 (dissenting opinions) (arguing that there should be two different types of product-by-process claims, one type for known products where the product does not need to be novel but the process limitations of the claim serve as limitations in determining infringement, and another type for products that cannot be claimed without reference to the process by which the product is made, and for which the process limitations do not serve as limitations in determining infringement); See 970 F.2d 834, rehearing en banc denied, 974 F.2d 1299 (concurring opinion), 974 F.2d 1279 (dissenting opinions) (same); Abbott Labs., 2009 U.S. App. LEXIS 10476, *106–7 (Newman, dissenting) (same); Abbott, 2009 U.S. App. LEXIS 10476, *107-110 (Lourie, dissenting) (same). 96. Abbott Labs. v. Sandoz, Inc., 2009 U.S. App. LEXIS 10476 (Fed. Cir. 2009) (en banc in relevant part). 97. Id. at *26–27.

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a process that is the same as or equivalent to the process limitations in the claim.98 The court was clear that this rule applies to all product-by-process claims, regardless of whether the product could be claimed without reference to the process by which it is made.99 a) History of Product-by-Process Claims in the Federal Circuit For almost 17 years, there has been a split within the Federal Circuit as to whether process limitations in product-by-process claims are limitations for determining infringement. In 1991, in Scripps, a panel of the Federal Circuit held that product-by-process claims were not limited by the process steps within the claims.100 The patent in Scripps contained product-by-process claims directed to a product made in accordance with a particular process.101 The court held that the accused product, which was produced by a different process, nonetheless infringed the product-by-process claims because “in determining patentability we construe the product as not limited by the process stated in the claims. Since claims must be construed the same way for validity and for infringement, the correct reading of the product-by-process claims is that they are not limited to product prepared by the process set forth in the claims.”102 In 1992, in Atlantic Thermoplastics, a different panel of the Federal Circuit held—completely opposite to Scripps—that the process steps in productby-process claims do serve as claim limitations for determining infringement.103 The product-by-process claim in Atlantic Thermoplastics concerned shock absorbing shoe innersoles.104 The patentee argued that under Scripps the innersoles infringed the product-by-process claim because they were physically indistinguishable from the claimed product, even though they were made by a process substantially different from the claimed process.105 The Atlantic Thermoplastics court disagreed: “In light of Supreme Court case law and the history of product-by-process claims, this court acknowledges that infringement analysis proceeds with reference to the patent claims. Thus, process terms in product-by-process claims serve as limitations in determining infringement.”106

98. 99. 100. 101. 102. 103. 104. 105. 106.

Id. at *28. Id. at *31–32. Scripps Clinic and Research Foundation v. Genentech, 927 F.2d 1565, 1583 (Fed. Cir. 1991). Id. at 1570. Id. at 1583. Atlantic Thermoplastics, 970 F.2d at 846–47. Id. at 835. Id. at 838. Id. at 846–47.


A sharply divided court denied a request to rehear Atlantic Thermoplastics en banc, with four judges dissenting in four separate opinions.107 Judge Rich argued that the panel’s decision was improper because claim construction was not an issue; instead, the patentee had conceded that its product-by-process claim was limited to the specified process.108 He also condemned the panel for ignoring the Federal Circuit’s rule that a prior binding panel decision (i.e., Scripps) could not be ignored or overruled except by an en banc decision.109 Judge Newman, joined by Judges Rich and Lourie, argued that the panel in Atlantic Thermoplastics had incorrectly ruled that all process steps of a product-by-process claim should be automatically treated as claim limitations.110 In their view, the process steps should sometimes be treated as claim limitations and sometimes not, depending on the “class of claim” at issue.111 Specifically, these judges contended that process limitations should not impact the validity or infringement of “true” product-by-process claims, which are those to novel products that cannot be described solely by their physical properties (as they argued was the case in Scripps), but should apply to limit claims directed to old products made by a new process (as they argued was the case in Atlantic Thermoplastics).112 A major problem with this position by the dissenters is that the law is clear that there are not two different types of product-by-process claims, distinguished by whether the product can be described without regard to the process by which it is made. Any product may be claimed in a product-by-process claim, regardless of whether the product can be described without regard to how it is made.113 Further, the validity and patentability of all productby-process claims is based solely on the novelty and nonobviousness of the product claimed, without regard to the process limitations, and regardless of whether the product can be described without regard to the process by which it is made.114

107. See 970 F.2d 834, rehearing en banc denied, 974 F.2d 1299 (concurring opinion), 974 F.2d 1279 (dissenting opinions). 108. 974 F.2d at 1280 (Rich, dissenting). 109. Id. at 1281. 110. 974 F.2d at 1282–83 (Newman, dissenting). 111. Id. at 1284. 112. Id. 113. E.g., SmithKline, 439 F.3d at 1315 (“Today, however, product-by-process claims are used by inventors even if the invention could have been described independent of the process.”). 114. E.g., Id. at 1315–17 (reiterating that the validity of all product-by-process claims depends solely on the novelty and nonobviousness of the product, without regard to how it is made, and quoting M.P.E.P. § 2113 which instructs that patentability of all product-by-process claims is based solely on the novelty and nonobviousness of the product, without regard to how it is made).

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In 2006, in SmithKline, the Federal Circuit came close to addressing the Scripps—Atlantic Thermoplastics split and discussed the issue in detail.115 However, the SmithKline court left the split unresolved. The court declined to decide the issue of infringement of product-by-process claims because it affirmed the district court’s grant of summary judgment that the product-byprocess claims were anticipated.116 Since the claims were found to be invalid, the court declined to decide the issue of infringement.117 The SmithKline court explained that anticipation of a product-by-process claim has always turned on whether the product itself was disclosed in the prior art, and anticipation could not be avoided by claiming a known product as produced by a different process: We need not address this controversy here. The issue here does not turn on how broadly or narrowly we construe the ’944 patent’s claims, for it is undisputed that the product that is the subject of the patent’s claims is paroxetine. Rather the issue is whether the [prior art] anticipated the . . . product-by-process patent, when the [prior art] broadly claimed paroxetine without regard to the process by which it was made. Thus, the ultimate issue is simply whether the prior art disclosure of a product precludes a future claim to that same product when it is made by an allegedly novel process. Regardless of how broadly or narrowly one construes a product-by-process claim, it is clear that such claims are always to a product, not a process. It has long been established that one cannot avoid anticipation by an earlier product disclosure by claiming the same product more narrowly, that is, by claiming the product as produced by a particular process.118

As with Atlantic Thermoplastics, a divided court denied a request to rehear SmithKline en banc, with three judges dissenting in two separate opinions.119 Judge Newman, joined by Judge Gajarsa, referred to her dissent in Atlantic Thermoplastics, and argued that Atlantic Thermoplastics and Scripps could be reconciled if two different classes of product-by-process claims were recognized, depending on whether the product could be described without reference to how it is made.120 Judge Rader, in a dissent joined by Judge Gajarsa,

115. 116. 117. 118. 119.

SmithKline, 439 F.3d at 1315–17. Id. at 1319. Id. at 1316–17. Id. (footnote and header omitted). SmithKline Beecham Corp. v. Apotex Corp., 453 F.3d 1346 (Fed. Cir. 2006) (reh’g denied, reh’g en banc denied), 453 F.3d at 1347 (dissenting opinions). 120. Id. at 1347 (Newman, dissenting) (“As I wrote in my dissent from the panel decision, Scripps accommodates the situation where the product is novel and complex and cannot be described other than by the way it was made, while Atlantic Thermoplastics deals with a


argued that the panel should have addressed and resolved the split, and was only adding to the confusion:121 The role of the claims in an infringement or anticipation analysis is at the heart of patent law. Whether all the words in a product-by-process claim are limiting is a question that patent attorneys, trial courts, and apparently this court, still cannot confidently answer. . . . Without doubt, this court’s product-by-process law contains an apparent conflict. Choosing between Scripps . . . and Atlantic Thermoplastics . . . is not task this court through its inaction should continue to force on trial courts, as it did in Smithkline. Giving those same trial courts the option of ignoring the claim language altogether is simply inexcusable.122

b) Basis of the Abbott Court’s En Banc Holding The Federal Circuit in Abbott based its sua sponte en banc holding that process limitations in product-by-process claims are to be considered as limitations for determining infringement on “Supreme Court precedent and the treatment of product-by-process claims throughout the years by the PTO and other binding court decisions.”123 The court first discussed a number of Supreme Court decisions, dating from 1874 to 1938, in which, the court asserted, “the Supreme Court consistently noted that process terms that define the product in a product-by-process claim serve as enforceable limitations.”124 Next, the court considered “binding case law of this court’s predecessor courts, the United States Court of Customs and Patent Appeals, and the United States Court of Claims,” which the court asserted “followed the same rule” as the Supreme Court, “that process terms that define the product in a productby-process claim serve as enforceable limitations.”125 Further, the court noted that, “[t]his court’s sister circuits also followed the general rule that the defining process terms limit product-by-process claims.”126 The court also cited to Warner-Jenkinson,127 arguing that the Supreme Court’s broad principle for the doctrine of equivalents that each limitation of

121. 122. 123. 124. 125. 126. 127.

product whose production requires use of a certain process, whether or not the product itself is novel.”). Id. at 1347–48 (Rader, dissenting). Id. at 1347–48 (Rader, dissenting). Abbott, 2009 U.S. App. LEXIS 10476, *26. Id. at *22. Id. at *22–23. Id. at *23. Warner-Jenkinson Co. v. Hilton Davis Chem. Co., 520 U.S. 17 (1997).


a claim is material to defining the claim’s scope supported the court’s holding for infringement of product-by-process claims.128 More recently, the Supreme Court has reiterated the broad principle that “[e]ach element contained in a patent claim is deemed material to defining the scope of the patented invention.” Although Warner-Jenkinson specifically addressed the doctrine of equivalents, this rule applies to claim construction overall. As applied to product-by-process claims, Warner-Jenkinson thus reinforces the basic rule that the process terms limit product-by-process claims.129 c) Scripps Is Expressly Overruled The Abbott court endorsed Atlantic Thermoplastics and expressly overruled Scripps. In summarizing its holding, the court cited and quoted Atlantic Thermoplastics, stating: Thus, based on Supreme Court precedent and the treatment of productby-process claims throughout the years by the PTO and other binding court decisions, this court now restates that “process terms in product-by-process claims serve as limitations in determining infringement.” Atl. Thermoplastics, 970 F.2d at 846–47.130


d) The Holding of Abbott Applies to All Types of Product-by-Process Claims The en banc Federal Circuit made it clear that its holding in Abbott applies to all types of product-by-process claims, regardless of whether the product can be described without reference to the process by which it is made.132

128. 129. 130. 131. 132.

Abbott, 2009 U.S. App. LEXIS 10476, *27. Abbott, 2009 U.S. App. LEXIS 10476, *27 (internal citation omitted). Id. at *26–27. Id. at *27. Id. at *28–32.

Practice Points

According to the court, a contrary rule, which was advocated by both dissenting opinions, would give the patentee more than the inventor claimed: [I]t is both unnecessary and logically unsound to create a rule that the process limitations of a product-by-process claim should not be enforced in some exceptional instance when the structure of the claimed product is unknown and the product can be defined only by reference to a process by which it can be made. Such a rule would expand the protection of the patent beyond the subject matter that the inventor has “particularly point[ed] out and distinctly claim[ed]” as his invention, 35 U.S.C. § 112, P [2].133

The court emphasized this holding in response to two dissents that argued that the court’s en banc holding should not apply to all types of productby-process claims.134 In particular, the dissenters argued that when productby-process claims are required to claim a novel product because the product cannot be described without reference to the process by which it is made, the process limitations of these claims should not be considered for infringement purposes.135 Therefore, when determining infringement under the doctrine of equivalents of product-by-process claims, the process limitations of the claims must be considered. A product will infringe a product-by-process claim under the doctrine of equivalents only if it was made by a process having steps identical or equivalent to the process limitations in the claim. A product will not infringe a product-by-process claim under the doctrine of equivalents if it was made by a process that is not identical or equivalent to that claimed, even if the product is otherwise identical or equivalent to the claimed product.

IV. Practice Points A. A Competent Noninfringement Opinion Must Separately Consider the Doctrine of Equivalents As covered in Chapter 13, a competent noninfringement opinion must take into consideration infringement under the doctrine of equivalents, which must be considered separately from literal infringement. Appendix A provides a sample outline of a noninfringement opinion that contains an analysis

133. Id. at *31–32. 134. Id. at *46 (Newman, dissenting); Id. at *107 (Lourie, dissenting). 135. Id. at *106–7 (Newman, dissenting); Id. at *107–10 (Lourie, dissenting).

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of infringement under the doctrine of equivalents separately from claim construction and literal infringement.

B. Claim Construction for Literal Infringement Differs from Construing Claims for Infringement Under the Doctrine of Equivalents As discussed in Section I[B] above, construing the scope of claims under the doctrine of equivalents is strictly different from claim construction, which construes the scope of claims for literal infringement (see Chapter 2 for claim construction). There are similarities between claim construction and construing claim scope for the doctrine of equivalents. However, a determination of claims under the doctrine of equivalents builds from claim construction, with a number of special rules applying to determining scope under the doctrine of equivalents that do not apply to claim construction. Moreover, as discussed in Chapter 13, a competent noninfringement opinion must have separate analyses for claim construction for literal infringement and construing claims for infringement under the doctrine of equivalents. Appendix A provides a sample outline for a noninfringement opinion that discusses claim construction for literal infringement separately from construing claim scope under the doctrine of equivalents.

C. The All Limitations Rule Is All Important Consideration of infringement under the all limitations rule (covered in Section II[A] above) is necessary in any doctrine of equivalents evaluation and opinion. An accused infringing product or process must have an element corresponding (literally or equivalently) to every claim limitation. A product or process cannot infringe a claim when the product or process is entirely missing at least one element that literally corresponds to a claim limitation and there is nothing in the accused product or process that is equivalent to the literally missing claim limitation. In such a case, a finding of infringement would vitiate the missing claim limitation. (The “all limitations rule” is also called the “all elements rule” and the “doctrine of vitiation.”)

D. Proof of Equivalency The test for determining whether an element in an accused product or process is equivalent to a claim limitation is whether the differences between the two are insubstantial to one of ordinary skill in the art. One way to make this determination is via the function-way-result test. (See Section II[B] above.)

Practice Points

E. Be Sure to Look for and, Where Necessary, Apply Limitations and Special Rules for Determining Infringement Under the Doctrine of Equivalents As covered in Section III above, a number of limitations and special rules apply to construing the scope of claims and determining infringement under the doctrine of equivalents. A competent noninfringement evaluation and opinion must correctly consider and apply these limitations and rules. Limitations to the doctrine of equivalents include prosecution history estoppel (both amendment-based and argument based) exclusion, the dedicationdisclosure rule, and prior art. Special rules for determining infringement under the doctrine of equivalents include those for means-plus-function claims and product-by-process claims.

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CHAP T ER

5 Patent Law Principle II: Infringement Indirect Infringement, Divided Infringement, and Section 271(e)(1) “Safe Harbor”

I. Indirect Infringement

189

A. Direct Infringement Compared with Indirect Infringement B. Inducement to Infringe (Inducement)

189 190

1. Direct Infringement Is Required for Inducement

191

2. Inducement Requires an Affirmative Act, and Is Akin to Aiding and Abetting in Criminal Law

191

3. Proof of Specific Intent Is Required for Inducement

192

4. Two-Part Test for Specific Intent to Induce Infringement

192

5. Circumstantial Evidence May Be Used to Show Specific Intent

193

6. Examples of Facts Under Which Courts Have Found Inducement

194

7. Corporate Officers Responsible for Inducement of Infringement May Be Personally Liable

195

C. Contributory Infringement

196

1. Direct Infringement Is Required for Contributory Infringement

196

2. Knowledge of the Patent and the Resulting Infringement, But Not Intent

197

3. Must Not Be a Staple Article or Commodity of Commerce Suitable for Substantial Noninfringing Use

197

185

186 Chapter 5 Patent Law Principle II: Infringement D. Supplying Components in or from the United States for Assembly Abroad into a Combination That Would Infringe if Assembled in the United States (Section 271(f))

200

1. History: DeepSouth Packing Co. (Shrimp Deveining Machine)

200

2. Split Federal Circuit Precedent on Whether Section 271(f) Applies to Method Claims

201

3. Definition of Component

202

4. Component Supplied from the United States

202

E. Importation into the United States, or Use, Sale, or Offer to Sell in the United States of a Product Made Abroad by a Process That Would Infringe if Performed in the United States (Section 271(g))

203

1. Historical Development

204

2. “Product Made by a Patented Process” Means Physical Product Directly Manufactured by a Patented Process

204

3. “Materially Changed”

206

II. Joint (Divided) Infringement

209

A. Only One Party May Be Liable for Infringement, and That Party Must Perform All Infringing Acts Corresponding to a Claim’s Limitations

209

B. The Infringer Must “Direct or Control” the Acts of Another to Be Held Solely Liable for Infringement Under Vicarious Liability

210

C. An “Arm’s Length” Relationship Is Not Sufficient for Vicarious Liability for Joint Infringement

211

D. Every Act Corresponding to a Limitation of a Method Claim Must Be Performed in the United States in Order for a Method Claim to Be Infringed

213

III. Section 271(e)(1) “Safe Harbor”

214

A. The “Safe Harbor” Provision Is in Parallel with Patent Term Restoration of the Hatch-Waxman Act

215

B. The Safe Harbor Covers Only Patents on Products Subject to FDA Regulatory Approval

217

1. U.S. Supreme Court and Federal Circuit Cases Holding That Section 271(e)(1) Applies to Products Subject to FDA Regulatory Approval

218

Patent Law Principle II: Infringement 187 2. Section 271(e)(1) Does Not Apply to Products That Are Not Subject to FDA Regulatory Approval (For Example, “Research Tools” That Are Not Themselves Subject to FDA Regulatory Approval) IV. Practice Points

220 224

A. Be Aware of Indirect Infringement

224

B. Direct Infringement Is Always Required For Indirect Infringement

225

C. Evaluating and Opining on Indirect Infringement Requires Claim Construction and a Direct Infringement Analysis

225

D. Inducement to Infringe Under Section 271(b) Requires Proof of Specific Intent

225

E. Active Inducement May Expose the Inducer to Personal Liability That Is Not Covered by Corporate Indemnities or Insurance

226

F. Contributory Infringement Requires Knowledge of the Patent and the Resulting Infringement, but Intent Need Not Be Shown

226

G. For Contributory Infringement, the Component Cannot Be a Staple Article or Commodity of Commerce Suitable for Substantial Noninfringing Use

226

H. There Is a Split in the Federal Circuit as to Whether Infringement Under Section 271(f ) Applies to Method Claims

227

I. “Components” Under Section 271(f ) Must Be Tangible Items

227

J. To Infringe Under Section 271(f ), Components Must Be Supplied in or from the United States

227

K. Products Under Section 271(g) Must Be Physical Products Made Abroad by a Method Patented in the United States; Knowledge Is Not a Product

227

L. “Products” Under Section 271(g) Cannot Be “Materially Changed by Subsequent Processes or Become Trivial and Nonessential Components of Another Product”

228

M. While Infringement Requires That a Single Party Infringe All Claim Limitations, Infringement May Occur Where One Party Infringes Less than All Limitations, but Directs or Controls the Acts of Another to Complete the Infringement

228

188 Chapter 5 Patent Law Principle II: Infringement N. An “Arm’s Length” Relationship between Parties Is Not Sufficient for Joint Infringement

228

O. Be Aware of the Section 271(e)(1) “Safe Harbor” Exemption to Infringement

229

P. Section 271(e)(1) Does Not Cover “Research Tools” That Themselves Are Not the Subject of FDA Regulatory Approval

229

Indirect Infringement

Usage Note: This chapter covers indirect infringement, divided infringement, and the Section 271(e)(1) “safe harbor” infringement exemption. Indirect infringement requires direct infringement, which is evaluated using the rules for determining literal infringement and infringement under the doctrine of equivalents. (These topics are covered in Chapters 3 and 4 respectively.) Chapter 2 is also directly relevant to this chapter as it covers claim construction for literal infringement. Further, following the lead of the Federal Circuit, this book (especially for infringement determinations) uses the term limitations to refer to claim language and the term elements to refer to potentially infringing products or processes.1 For example, an infringing product or process has elements corresponding to every limitation of the infringed claim. However, some older cases occasionally refer to claim elements when discussing claim limitations.

I. Indirect Infringement A. Direct Infringement Compared with Indirect Infringement Direct infringement places infringement liability on parties performing certain acts which Section 271(a) of the Patent Statute (35 U.S.C. § 271(a)) defines as direct infringement of a U.S. patent. Section 271(a) provides: Whoever without authority makes, uses, offers to sell, or sells any patented invention, within the United States or imports into the United States any patented invention during the term of the patent therefore, infringes the patent.2

Therefore, to be liable for direct infringement, a party must, “without authority[,] make[], use[], offer[] to sell, or sell[] any patented invention, within the United States or import[] into the United States any patented invention during the term of the patent therefore.”3 Liability for direct infringement only attaches to the party that makes, uses, offers to sell, sells, or imports into the United States a patented invention. Thus, a party is not liable

1. E.g., Festo Corp. v. Shoketsu Kinzoku Kogyo Kabushiki Co., 234 F.3d 558, 564 n.1 (Fed. Cir. 2000) (“It is preferable to use the term ‘limitation’ when referring to claim language and the term ‘element’ when referring to the accused device.”); Lockheed Martin Corp. v. Space Systems/Loral, Inc., 249 F.3d 1314, 1321 n.1 (Fed. Cir. 2001). 2. 35 U.S.C.S. § 271(a) (2009). 3. Id.

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for direct infringement for: (a) inducing another party to directly infringe a patent; (b) contributing to the infringement of a patent by another; (c) performing acts outside the United States that would directly infringe if performed in the United States; or (d) importing a product made by a process outside the United States which process would infringe if performed in the United States. However, U.S. patent law has developed indirect infringement to apply liability for infringement of U.S. patents to parties who do not directly infringe because of the “loopholes” in Section 271(a). In these situations, Congress and the courts have determined that infringement liability should exist nonetheless. Thus, indirect infringement covers: the inducement of another to directly infringe (generally referred to as inducement), contribution to the direct infringement of another (generally referred to as contributory infringement), performance by two or more parties of actions that would constitute direct infringement if performed by a single party (generally referred to as divided or joint infringement), activities related to acts occurring outside the United States that would constitute direct infringement if performed in the United States (infringement under Section 271(f)), and importation of products made outside the United States that if made in the United States would constitute direct infringement (infringement under Section 271(g)).

B. Inducement to Infringe (Inducement) Inducement to infringe is codified in Section 271(b) of the U.S. Patent Statute (Title 35 of the United States Code) as: Whoever actively induces infringement of a patent shall be liable as an infringer.4

Therefore, Section 271(b) provides for indirect infringement liability. In other words, under Section 271(b), a party may be liable for infringement of a U.S. patent in situations in which the party does not itself perform acts of direct infringement, but “actively induces infringement of a patent” by another party.5 As explained by the Federal Circuit: “If an entity offers a product with the object of promoting its use to infringe, as shown by clear expression or other affirmative steps taken to foster infringement, it is then liable for the resulting acts of infringement by third parties.”6

4. 35 U.S.C.S. § 271(b) (2009). 5. Id. 6. DSU Med. Corp. v. JMS Co., 471 F.3d 1293, 1305–6 (Fed. Cir. 2006) (en banc in relevant part).


1. Direct Infringement Is Required for Inducement Direct infringement is a necessary part of inducement. As summarized by the Federal Circuit: “Liability for either active inducement of infringement or for contributory infringement is dependent upon the existence of direct infringement.” Joy Techs., Inc. v. Flakt, Inc., 6 F.3d 770, 774 (Fed. Cir. 1993). There can be no inducement or contributory infringement without an underlying act of direct infringement. Id.7

2. Inducement Requires an Affirmative Act, and Is Akin to Aiding and Abetting in Criminal Law The Federal Circuit has explained that inducement of infringement by another requires an affirmative act on the part of the inducer. “Actively inducing,” like “facilitating,” requires an affirmative act of some kind: “Of course inducement has connotations of active steps knowingly taken— knowingly at least in the sense of purposeful, intentional as distinguished from accidental or inadvertent. But with that qualifying approach, the term is as broad as the range of actions by which one in fact causes, or urges, or encourages, or aids another to infringe a patent.”8

Accordingly, the Federal Circuit has ruled that mere inaction in the face of another’s infringement is not sufficient to prove inducement of infringement under Section 271(b): In A. Stucki Co. v. Worthington Industries, Inc., 849 F.2d 593 (Fed. Cir. 1988), we considered whether evidence of mere inaction by a parent company in the face of infringement by a subsidiary—i.e., a failure to stop infringement—could

7. Linear Tech. Corp. v. Impala Linear Corp., 379 F.3d 1311, 1326 (Fed. Cir. 2004); Ricoh Co., Ltd. v. Quanta Computer Inc., 550 F.3d 1325, 1341 (Fed. Cir. 2008) (“Initially, we note that a finding of inducement requires a threshold finding of direct infringement—either a finding of specific instances of direct infringement or a finding that the accused products necessarily infringe.”); ACCO Brands, Inc. v. ABA Locks Mfr. Co., 501 F.3d 1307, 1313 (Fed. Cir. 2007); Dynacore Holdings Corp. v. U.S. Philips Corp., 363 F.3d 1263, 1274 (Fed. Cir. 2004) (“A defendant’s liability for indirect infringement must relate to the identified instances of direct infringement.”). 8. Tegal Corp. v. Tokyo Electron Co., 248 F.3d 1376, 1379 (Fed. Cir. 2001) (quoting Fromberg, Inc. v. Thornhill, 315 F.2d 407, 411 (5th Cir. 1963)) (emphasis in original); Beverly Hills Fan Co. v. Royal Sovereign Corp., 21 F.3d 1558, 1569 (Fed. Cir. 1994) (noting that jurisdiction for a claim of inducement cannot be premised on an omission because “active inducement of infringement requires the commission of an affirmative act.”).

191

192

Chapter 5 Patent Law Principle II: Infringement constitute either direct infringement or active inducement. . . . We . . . concluded that evidence of mere inaction did not constitute inducement. . . .9

Furthermore, the Federal Circuit has analogized active inducement of infringement with aiding and abetting in criminal law.10 “To establish liability under section 271(b), a patent holder must prove that once the defendants knew of the patent, they ‘actively and knowingly aid[ed] and abett[ed] another’s direct infringement.’ Water Technologies Corp. v. Calco, Ltd., 850 F.2d 660, 668 (Fed. Cir. 1988) (emphasis in original).”11 3. Proof of Specific Intent Is Required for Inducement “In order to prevail on an inducement claim, the patentee must establish ‘first that there has been direct infringement, and second that the alleged infringer knowingly induced infringement and possessed specific intent to encourage another’s infringement.’”12 In an en banc decision on inducement, the Federal Circuit held: Inducement requires evidence of culpable conduct, directed to encouraging another’s infringement, not merely that the inducer had knowledge of the direct infringer’s activities. . . .” [t]he plaintiff has the burden of showing that the alleged infringer’s actions induced infringing acts and that he knew or should have known his actions would induce actual infringements.”13

4. Two-Part Test for Specific Intent to Induce Infringement The Federal Circuit has articulated a two-part test for determining whether the “state of mind”14 requirement for specific intent to induce infringement is met: [T]his court[has] articulat[ed how] the state of mind requirement for inducement [may be met.]. In Manville, this court held that the “alleged infringer must

9. Tegal, 248 F.3d at 1379 (emphasis added). 10. National Presto Indus., Inc. v. West Bend Co., 76 F.3d 1185, 1196 (Fed. Cir. 1996) (analogizing active inducement to aiding and abetting violations of criminal laws). 11. DSU, 471 F.3d at 1305. 12. Broadcom Corp. v. Qualcomm, Inc., 543 F.3d 683, 698 (Fed. Cir. 2008) (quoting ACCO Brands, Inc. v. ABA Locks Mfr. Co., 501 F.3d 1307, 1312 (Fed. Cir. 2007)) (quoting Minn. Mining & Mfg. Co. v. Chemque, Inc., 303 F.3d 1294, 1304–5 (Fed. Cir. 2002)); Manville Sales Corp. v. Paramount Systems, Inc., 917 F.2d 544, 553 (Fed. Cir. 1990) (“It must be established that the defendant possessed specific intent to encourage another’s infringement and not merely that the defendant had knowledge of the acts alleged to constitute inducement.”). 13. DSU, 471 F.3d at 1305–6 (quoting Manville, 917 F.2d at 553) (emphasis in original); Broadcom, 543 F.3d at 697 (“The relevant standard for establishing the intent element of inducement was clarified by this Court in DSU, 471 F.3d at 1304–6 (en banc in relevant part)”). 14. DSU, 471 F.3d at 1306.

Indirect Infringement be shown . . . to have knowingly induced infringement,” 917 F.2d at 553, not merely knowingly induced the acts that constitute direct infringement. This court explained its “knowing” requirement: “It must be established that the defendant possessed specific intent to encourage another’s infringement and not merely that the defendant had knowledge of the acts alleged to constitute inducement. The plaintiff has the burden of showing that the alleged infringer’s actions induced infringing acts and that he knew or should have known his actions would induce actual infringements.” Manville at 553.15

As confirmed by the Federal Circuit in Broadcom: Additionally, we noted in DSU that this intent may be established where an alleged infringer who “knew or should have known his actions would induce actual infringements,” is shown to have induced infringing acts through his actions. 471 F.3d at 1306 (emphasis added) (adopting the same two-part test articulated in Manville, 917 F.2d at 553). That is, the “affirmative intent to cause direct infringement,” id., required by DSU may be shown . . . by establishing first that the defendant “intended to cause the acts that constitute the direct infringement,” and second that the defendant “kn[ew] or should have known [that] its action would cause the direct infringement,” DSU, 471 F.3d at 1305. . . .16

5. Circumstantial Evidence May Be Used to Show Specific Intent As summarized by the Federal Circuit in Broadcom: “A patentee may prove direct infringement or inducement of infringement by either direct or circumstantial evidence. There is no requirement that direct evidence be introduced, nor is a jury’s preference for circumstantial evidence over direct evidence unreasonable per se.” Liquid Dynamics Corp. v. Vaughan Co., 449 F.3d 1209, 1219 (Fed. Cir. 2006) (internal citation omitted).17

Further, in Water Technologies the Federal Circuit stated: “While proof of intent is necessary, direct evidence is not required; rather, circumstantial evidence may suffice.”18

15. Id. (emphasis in original). 16. Broadcom, 543 F.3d at 699 (emphasis and bracketing in original). 17. Id. at 699; Ricoh Co., Ltd. v. Quanta Computer Inc., 550 F.3d 1325, 1342 (Fed. Cir. 2008) (“Moreover, both DSU Medical and Grokster relied on prior decisions of this court establishing that specific intent may be inferred from circumstantial evidence where a defendant has both knowledge of the patent and specific intent to cause the acts constituting infringement.”); MEMC Elec. Materials, Inc. v. Mitsubishi Materials Silicon Corp., 420 F.3d 1369, 1378 n.4 (Fed. Cir. 2005). 18. Water Techs. Corp. v. Calco, Ltd., 850 F.2d 660, 668 (Fed. Cir. 1988).

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6. Examples of Facts Under Which Courts Have Found Inducement In Broadcom, the Federal Circuit found inducement of infringement under these circumstances: Qualcomm does not dispute that it was on notice of Broadcom’s patents and infringement contentions. And it concedes that it “worked closely with its customers to develop and support the accused products, and that Qualcomm did not make changes to those products or give its customers [instructions regarding how to avoid infringement] after this lawsuit was filed.” Qualcomm also fails to identify evidence in the record to counter the district court’s related observations pertaining to willfulness: “[T]he totality of the circumstances presented in the evidence supports the jury’s findings: a failure to investigate, a failure to explore design around approaches, a failure to take remedial steps—and, of course, a failure to seek legal advice. This was sufficient for the jury to infer a lack of good faith.”19

In Golden Blount, inducement was found where it was “undisputed that [the inducer] had notice of the patent . . . and that [the inducer] provided [an] instruction sheet to customers directing them to perform specific acts leading to the assembly of infringing devices.”20 In Mentor, the court found inducement to infringe where the defendant was aware of the patent, yet chose to continue selling products designed specifically for use in an infringing manner—and the jury discredited the defendant’s assertion that it relied upon a non-infringement opinion letter in good faith.21 Finally, in MEMC Electronic Materials, the Federal Circuit noted: “Evidence of active steps taken to encourage direct infringement, such as advertising an infringing use or instructing how to engage in an infringing use, show an affirmative intent that the product be used to infringe.” Metro-GoldwynMayer Studios Inc. v. Grokster, Ltd., 545 U.S. 913, 162 L. Ed. 2d 781, 800, 125 S. Ct. 2764 (U.S. 2005) (internal citations and alternations omitted). First, a reasonable jury could conclude that the e-mail communications between [the defendant] and [the direct infringer] in the United States represent product support which enabled [the direct infringer] to purchase and use the accused wafers. See Metabolite Labs., Inc. v. Lab. Corp. of Am. Holdings, 370 F.3d 1354 (Fed. Cir. 2004) (finding active inducement of infringement based on defendant’s

19. Broadcom, 543 F.3d at 699 (bracketing in original). 20. Golden Blount, Inc. v. Robert H. Peterson Co., 438 F.3d 1354, 1364 n.4 (Fed. Cir. 2006). 21. Mentor H/S, Inc. v. Medical Device Alliance, Inc., 244 F.3d 1365, 1379 (Fed. Cir. 2001).

Indirect Infringement publications describing and promoting use of patented method). As for the requirement of specific intent to encourage infringement, it is undisputed that [the defendant] knew of the existence of the ’302 patent because it received a letter concerning it. This type of evidence is relevant for supporting proof of intent for inducement (though not by itself sufficient). See Fuji Photo Film Co., Ltd. v. Jazz Photo Corp., 394 F.3d 1368, 1378 (Fed. Cir. 2005); Mentor H/S, Inc. v. Med. Device Alliance, Inc., 244 F.3d 1365, 1379 (Fed. Cir. 2001). Moreover, the series of e-mails between [the defendant] and [the direct infringer] provide sufficient circumstantial evidence for a reasonable jury to conclude that [the defendant] was not only aware of the potentially infringing activities in the United States by [the direct infringer], but also that [the defendant] intended to encourage those activities. See Fuji Photo Film Co., 394 F.3d at 1378 (“A patentee may prove intent through circumstantial evidence.”); Water Techs., 850 F.2d at 669 (“The requisite intent to induce infringement may be inferred from all of the circumstances”).22

7. Corporate Officers Responsible for Inducement of Infringement May Be Personally Liable Because inducement of infringement requires proof of specific intent, the Federal Circuit has held that corporate officers may be personally liable if they are found to have induced infringement. Specifically, the Federal Circuit stated that under Section 271(b): “Corporate officers who actively assist with their corporation’s infringement may be personally liable for inducing infringement regardless of whether the circumstances are such that a court should disregard the corporate entity and pierce the corporate veil.”23 Moreover, the court added, “it is well settled that corporate officers who actively aid and abet their corporation’s infringement may be personally liable for inducing infringement under § 271(b). . . .” 24 Therefore, inducement of infringement can have serious consequences for those involved. Corporate officers may be personally liable for inducement of infringement because inducing infringement requires acts of specific intent. In such cases, it is unlikely that corporate indemnities, directors and officers liability insurance, or other protections would apply to corporate officers liable for inducement of infringement because these protections generally do not apply to intentional acts of officers.

22. MEMC, 420 F.3d at 1379–1380. 23. Manville Sales Corp. v. Paramount Systems, Inc., 917 F.2d 544, 553 (Fed. Cir. 1990). 24. Orthokinetics, Inc. v. Safety Travel Chairs, Inc., 806 F.2d 1565, 1578–79 (Fed. Cir. 1986).

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C. Contributory Infringement Contributory infringement is codified in Section 271(c) of the U.S. Patent Statute (35 U.S.C. § 271(c)) as: Whoever offers to sell or sells within the United States or imports into the United States a component of a patented machine, manufacture, combination or composition, or a material or apparatus for use in practicing a patented process, constituting a material part of the invention, knowing the same to be especially made or especially adapted for use in an infringement of such patent, and not a staple article or commodity of commerce suitable for substantial noninfringing use, shall be liable as a contributory infringer.25

As summarized by the Federal Circuit: The language of the statute incorporates the core notion that one who sells a component especially designed for use in a patented invention may be liable as a contributory infringer, provided that the component is not a staple article of commerce suitable for substantial noninfringing use. As aptly summarized in the House Judiciary Committee report accompanying the enactment of § 271(c), providing liability for contributory infringement reflects that “[o]ne who makes a special device constituting the heart of a patented machine and supplies it to others with directions (specific or implied) to complete the machine is obviously appropriating the benefit of the patented invention.” H.R. Rep. No. 82-1923, at 9 (1952).26

1. Direct Infringement Is Required for Contributory Infringement Direct infringement is a necessary part of contributory infringement. As summarized by the Federal Circuit: Liability for either active inducement of infringement or for contributory infringement is dependent upon the existence of direct infringement.” Joy Techs., Inc. v. Flakt, Inc., 6 F.3d 770, 774 (Fed. Cir. 1993). There can be no inducement or contributory infringement without an underlying act of direct infringement. Id.27

25. 35 U.S.C.S. § 271(c) (2009). 26. Ricoh Co., Ltd. v. Quanta Computer Inc., 550 F.3d 1325, 1337 (Fed. Cir. 2008). 27. Linear Tech. Corp. v. Impala Linear Corp., 379 F.3d 1311, 1326 (Fed. Cir. 2004); Dynacore Holdings Corp. v. U.S. Philips Corp., 363 F.3d 1263, 1274 (Fed. Cir. 2004) (“A defendant’s liability for indirect infringement must relate to the identified instances of direct infringement.”);


2. Knowledge of the Patent and the Resulting Infringement, But Not Intent Contributory infringement requires “a showing that the alleged contributory infringer knew that the combination for which his component was especially designed was both patented and infringing.”28 However, unlike inducement, contributory infringement does not require proof of intent: Section 271(c) codified the prohibition against the common type of contributory infringement referred to above, and made clear that only proof of a defendant’s knowledge, not intent, that his activity cause infringement was necessary to establish contributory infringement.29

3. Must Not Be a Staple Article or Commodity of Commerce Suitable for Substantial Noninfringing Use Section 271(c) expressly excludes from contributory infringement “staple article[s] or commodit[ies] of commerce suitable for substantial noninfringing use. . . .”30 While intent is not an express element of contributory infringement, the Federal Circuit has indicated that the “staple article or commodity of commerce suitable for substantial noninfringing use” requirement of Section 271(c) was added to the statute to provide an inference of intentional infringement. As explained by the Federal Circuit in Ricoh: The purpose of the “substantial noninfringing use” exception of § 271(c) is to allow determination of instances where the intent to infringe may be presumed based on the distribution of a product that has an unlawful use. When a manufacturer includes in its product a component that can only infringe, the inference that infringement is intended is unavoidable. While selling a potentially infringing product where each component part thereof has a substantial lawful use may well be “equivocal,” it is entirely appropriate to presume that one who sells a product containing a component that has no substantial noninfringing use in that product does so with the intent that the component will be used to infringe.31

28.

29. 30. 31.

Aro Mfg. Co. v. Convertible Top Replacement Co., 365 U.S. 336, 341, 5 L. Ed. 2d 592, 84 S. Ct. 599 (1960) (“for it is settled that if there is no direct infringement of a patent there can be no contributory infringement. . . .”). Aro Mfg. Co. v. Convertible Top Replacement Co., 377 U.S. 476, 488, 12 L. Ed.2d 457, 84 S. Ct. 1526 (1964); Hewlett-Packard Co. v. Bausch & Lomb, 909 F.2d 1464, 1469 n.4 (Fed. Cir. 1990). Hewlett-Packard, 909 F.2d at 1469 (emphasis in original). 35 U.S.C.S. § 271(c) (2009). Ricoh, 550 F.3d at 1338.

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198


Additionally, the Federal Circuit has held that when determining whether a component, material, or apparatus is a “staple article or commodity of commerce suitable for substantial noninfringing use,” it is important to examine the component, material, or apparatus in the proper context. For example, in Hodosh the defendant attempted to avoid contributory infringement by arguing that the “component” was an active ingredient in a larger product that was sold.32 The defendant acknowledged that this larger product was not a staple article of commerce.33 However, because the active ingredient was a staple article of commerce suitable for substantial noninfringing use, the defendant argued that there was no contributory infringement.34 The court disagreed and found contributory infringement based on the product as sold.35 More specifically, in Hodosh the plaintiff held a patent on a method of desensitizing teeth by using a composition containing potassium nitrate.36 The plaintiff sued a manufacturer of toothpaste containing potassium nitrate for contributory infringement.37 Although the accused toothpaste containing potassium nitrate did not itself directly infringe the method patent, customers undisputedly did so when using the paste to desensitize their teeth.38 The toothpaste manufacturer argued that the focus of the § 271(c) substantial noninfringing use inquiry should be on the ingredient in the toothpaste, potassium nitrate (which was a staple article of commerce with numerous noninfringing uses) rather than on the toothpaste as sold.39 The Federal Circuit held that the focus of the § 271(c) inquiry should be on the toothpaste as “what was actually sold.”40 The court reasoned that to hold otherwise would allow parties to easily escape liability for infringement under Section 271(c) of an otherwise infringing product merely because the product contains a noninfringing staple ingredient.41 In Ricoh, the Federal Circuit examined the same basic situation as Hodosh, but from a different angle. In Ricoh, the accused contributory infringer attempted to avoid liability by embedding a component that was a non-stable article of commerce and infringed a patent in a larger product having features

32. 33. 34. 35. 36. 37. 38. 39. 40. 41.

Hodosh v. Block Drug Co., 833 F.2d 1575, 1578 (Fed. Cir. 1987). Id. Id. Id. Id. Id. Id. Id. Id. Id.


that were staple articles of commerce capable of substantial noninfringing uses.42 The court refused to allow the infringer to avoid liability: [The defendant] should not be permitted to escape liability as a contributory infringer merely by embedding [the component] microcontroller in a larger product with some additional, separable feature before importing and selling it. If we were to hold otherwise, then so long as the resulting product, as a whole, has a substantial non-infringing use based solely on the additional feature, no contributory liability would exist despite the presence of a component that, if sold alone, plainly would incur liability. n7 n.7: Ricoh offers a useful illustration of this arbitrary result in its brief. Consider a hypothetical patented method of using an answering machine to take messages. If a manufacturer of an infringing answering machine sells two versions of the device, a stand-alone version and a version with a built-in telephone, consumers directly infringe when they use either to carry out the patented message-taking method. Under the dissent’s logic, however, the manufacturer would only incur contributory liability for the stand-alone answering machine, and not for the version that is identical but for the addition of a telephone. Under such a rule, evasion of the protection intended by Congress in enacting § 271(c) would become rather easy. A competitor who wished to sell hardware that would enable infringement of a patented process could do so without incurring liability for contributory infringement by selling a device that simply embedded the hardware for practicing the patented process within other hardware that also performs another process, or by combining the enabling hardware with other hardware before importing it. Moreover, only the first person in the supply chain (in the example above, the manufacturer who sells the microcontroller) could be liable for contributory infringement. The person who bought that infringing component and assembled it into something else would face no liability for contributory infringement, even if that component were good for nothing but infringement. And most importantly, no § 271(c) liability could ever be found where an infringing component is both manufactured and assembled into something else by the same person. In many of these situations, the only remedy would be against end users of the product for direct infringement. This result would be contrary to what the Supreme Court recognized [as] a fundamental purpose of contributory infringement liability: because “it may be impossible to enforce rights in the protected work effectively

42. Ricoh Co., Ltd. v. Quanta Computer Inc., 550 F.3d 1325, 1338 (Fed. Cir. 2008).

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200 Chapter 5 Patent Law Principle II: Infringement against all direct infringers, the only practical alternative [is] to go against the distributor of the copying device for secondary liability.”43

D. Supplying Components in or from the United States for Assembly Abroad into a Combination That Would Infringe if Assembled in the United States (Section 271(f)) Section 271(f) of the Patent Statute provides: (1) Whoever without authority supplies or causes to be supplied in or from the United States all or a substantial portion of the components of a patented invention, where such components are uncombined in whole or in part, in such manner as to actively induce the combination of such components outside of the United States in a manner that would infringe the patent if such combination occurred within the United States, shall be liable as an infringer. (2) Whoever without authority supplies or causes to be supplied in or from the United States any component of a patented invention that is especially made or especially adapted for use in the invention and not a staple article or commodity of commerce suitable for substantial noninfringing use, where such component is uncombined in whole or in part, knowing that such component is so made or adapted and intending that such component will be combined outside of the United States in a manner that would infringe the patent if such combination occurred within the United States, shall be liable as an infringer.44

1. History: DeepSouth Packing Co. (Shrimp Deveining Machine) Section 271(f) was enacted by Congress in response to the U.S. Supreme Court case Deepsouth Packing Co. that held that there could be no infringement of a U.S. apparatus patent (on a shrimp deveining machine) where the components were made in the U.S. to be assembled into an apparatus that would infringe the patent if assembled in the U.S., but where instead the components were exported and assembled abroad.45 The Supreme Court reached this decision because Section 271(a) expressly covers only infringing acts in the United States, not those abroad.46 Section 271(a) provides: “Whoever

43. Id. at 1337–38. 44. 35 U.S.C.S. § 271(f) (2009). 45. Deepsouth Packing Co. v. Laitram Corp., 406 U.S. 518, 92 S. Ct. 1700, 32 L. Ed. 2d 273 (1972); Microsoft Corp. v. AT&T Corp., 127 S. Ct. 1746, 1752, 550 U.S. 437, 444–445 (U.S. 2007) (“Congress specifically intended § 271(f) as a response to the Supreme Court’s decision in Deepsouth.”) (internal quotation omitted). 46. Deepsouth, 406 U.S. at 526–28.


without authority makes, uses or sells any patented invention, within the United States during the term of the patent therefore, infringes the patent.”47 2. Split Federal Circuit Precedent on Whether Section 271(f) Applies to Method Claims Section 271(f) clearly applies to patented products and devices for the reasons discussed above regarding the Deepsouth decision and the Congressional enactment of Section 271(f) in response.48 Briefly, Deepsouth involved a defendant who avoided directly infringing under Section 271(a) an apparatus patent by exporting components of a patented shrimp deveining machine that were assembled and used outside the United States.49 Congress enacted Section 271(f) to specifically cover such situations.50 Thus, Section 271(f) clearly applies to the infringement of device claims via exporting a component used in a patented device. However, Federal Circuit law is unclear as to whether Section 271(f) applies to infringement of method claims. Moreover, the U.S. Supreme Court has not addressed this issue.51 Federal Circuit cases that have held that Section 271(f) applies to process and method patents include Cardiac Pacemakers,52 Union Carbide,53 and Eolas Technologies.54 On the other hand, in NTP, the Federal Circuit held that Section 271(f) did not apply to a process patent.55

47. 35 U.S.C.S. § 271(a) (2009). 48. Deepsouth, 406 U.S. at 526–28; Microsoft, 127 S. Ct. at 1752 (“Congress specifically intended § 271(f) as a response to the Supreme Court’s decision in Deepsouth.”) (internal quotation omitted). 49. Deepsouth, 406 U.S. at 526–28. 50. Microsoft, 127 S. Ct. at 1752. 51. Cardiac Pacemakers, Inc. v. St. Jude Med., Inc., 2008 U.S. App. LEXIS 25475, *23–*24 (Fed. Cir. 2008) (unpublished) (“the Supreme Court left open the question of whether Section 271(f) applies to method claims”) (internal quotation omitted). 52. Id. 53. Union Carbide Chems. & Plastics Tech. Corp. v. Shell Oil Co., 425 F.3d 1366, 1380 (Fed. Cir. 2005) (holding that Section 271(f) applies to components used in the performance of patented methods and processes). 54. Eolas Techs. v. Microsoft Corp., 399 F.3d 1325, 1339 (Fed. Cir. 2005) (holding that every component of every form of invention deserves the protection of 35 U.S.C. § 271(f); i.e., that “components” and “patented inventions” under § 271(f) are not limited to physical machines). 55. NTP, Inc. v. Research in Motion, Ltd., 418 F.3d 1282, 1289–90 (Fed. Cir. 2005) (holding that Section 271(f) did not apply to a process patent, in the context of wireless devices sold in the U.S. and used abroad in a manner that would infringe the process patent if used in the U.S.).

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3. Definition of Component In Microsoft, the U.S. Supreme Court considered the definition of component within Section 271(f).56 Specifically, the Court addressed the question: “When, or in what form, does software become a “component” under § 271(f)?”57 and concluded: Abstract software code is an idea without physical embodiment, and as such, it does not match § 271(f)’s categorization: “components” amenable to “combination.” Windows abstracted from a tangible copy no doubt is information— a detailed set of instructions—and thus might be compared to a blueprint (or anything containing design information, e.g., a schematic, template, or prototype). A blueprint may contain precise instructions for the construction and combination of the components of a patented device, but it is not itself a combinable component of that device. . . .58

The Court further explained: Many tools may be used easily and inexpensively to generate the parts of a device. A machine for making sprockets might be used by a manufacturer to produce tens of thousands of sprockets an hour. That does not make the machine a “component” of the tens of thousands of devices in which the sprockets are incorporated, at least not under any ordinary understanding of the term “component.” Congress, of course, might have included within § 271(f)’s compass, for example, not only combinable “components” of a patented invention, but also “information, instructions, or tools from which those components readily may be generated.” It did not. In sum, a copy of Windows, not Windows in the abstract, qualifies as a “component” under § 271(f).59

4. Component Supplied from the United States In Microsoft, the U.S. Supreme Court also addressed the definition of supplied in or from the United States.60 Specifically, the Court considered the question: “Were ‘components’ of the foreign-made computers involved in this case ‘supplie[d]’ by [the potential infringer] ‘from the United States’?”61 The Court concluded that foreign-made components cannot infringe Section 271(f)

56. Microsoft Corp. v. AT&T Corp., 127 S. Ct. 1746, 1755, 550 U.S. 437 (2007) (“First, when, or in what form, does software become a “component” under § 271(f)). 57. Id. 58. Id. at 1755. 59. Id. at 1756. 60. Id. at 1753–54. 61. Id.


because the statute expressly requires components to be “supplied in or from the United States” to be combined abroad: Section 271(f) prohibits the supply of components “from the United States . . . in such manner as to actively induce the combination of such components.” § 271(f)(1) (emphasis added). Under this formulation, the very components supplied from the United States, and not copies thereof, trigger § 271(f) liability when combined abroad to form the patented invention at issue. Here, . . . the copies of Windows actually installed on the foreign computers were not themselves supplied from the United States. Indeed, those copies did not exist until they were generated by third parties outside the United States.62

The court further explained: Copying software abroad, all might agree, is indeed easy and inexpensive. But the same could be said of other items: “Keys or machine parts might be copied from a master; chemical or biological substances might be created by reproduction; and paper products might be made by electronic copying and printing.” Section 271(f) contains no instruction to gauge when duplication is easy and cheap enough to deem a copy in fact made abroad nevertheless “supplie[d] . . . from the United States.” The absence of anything addressing copying in the statutory text weighs against a judicial determination that replication abroad of a master dispatched from the United States “supplies” the foreign-made copies from the United States within the intendment of § 271(f).63

E. Importation into the United States, or Use, Sale, or Offer to Sell in the United States of a Product Made Abroad by a Process That Would Infringe if Performed in the United States (Section 271(g)) Section 271(g), also referred to as the Process Patent Amendments Act, provides: Whoever without authority imports into the United States or offers to sell, sells, or uses within the United States a product which is made by a process patented in the United States shall be liable as an infringer, if the importation, offer to sell, sale, or use of the product occurs during the term of such process patent. In an action for infringement of a process patent, no remedy may be granted for infringement on account of the noncommercial use or retail sale of a product

62. Id. at 1757 (footnotes omitted). 63. Id. (footnotes and internal citations omitted).

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Chapter 5 Patent Law Principle II: Infringement unless there is no adequate remedy under this title for infringement on account of the importation or other use, offer to sell, or sale of that product. A product which is made by a patented process will, for purposes of this title, not be considered to be so made after— (1) it is materially changed by subsequent processes; or (2) it becomes a trivial and nonessential component of another product.64

1. Historical Development As explained by the Federal Circuit: The Process Patent Amendments Act of 1988 was enacted to close a perceived loophole in the statutory scheme for protecting owners of United States patents. Prior to the enactment of the 1988 statute, a patentee holding a process patent could sue for infringement if others used the process in this country, but had no cause of action if such persons used the patented process abroad to manufacture products, and then imported, used, or sold the products in this country. In that setting, the process patent owner’s only legal recourse was to seek an exclusion order for such products from the International Trade Commission under section 337a of the Tariff Act of 1930, 19 U.S.C. § 1337a (1982). By enacting the Process Patent Amendments Act, the principal portion of which is codified as 35 U.S.C. § 271(g), Congress changed the law by making it an act of infringement to import into the United States, or to sell or use within the United States “a product which is made by a process patented in the United States . . . if the importation, sale, or use of the product occurs during the term of such process patent.”65

2. “Product Made by a Patented Process” Means Physical Product Directly Manufactured by a Patented Process The Federal Circuit has held that the “product” produced by the process in Section 271(g) “must [be] a physical article that was ‘manufactured’ and that the production of information is not covered.”66 In Housey, the patent at issue had biological method claims to methods of screening for protein inhibitors and activators.67 The patentee alleged that the defendant infringed the patent under Section 271(g) by: (1) [the sale] in the United States [of] a drug that was determined to be an inhibitor or activator of a target protein using the patented methods; and

64. 65. 66. 67.

35 U.S.C.S. § 271(g) (2009). Eli Lilly & Co. v. Am. Cyanamid Co., 82 F.3d 1568, 1571–722 (Fed. Cir. 1996). Bayer AG v. Housey Pharms., Inc., 340 F.3d 1367, 1377 (Fed. Cir. 2003). Id. at 1369.

Indirect Infringement (2) importation into or use in the United States [of] knowledge and information reflecting the identification or characterization of a drug acquired from using the patented methods.68

In considering the case, the Federal Circuit explained: “We are concerned here in particular with the meaning of the phrase ‘a product which is made by a [patented] process.’”69 In determining whether Section 271(g) covered the use of a patented method to generate knowledge, the court indicated that Section 271(g) does not cover “knowledge” “if the term ‘made’ is construed to mean ‘manufactured.’ We thus turn to the central question—whether the statutory term ‘made’ means ‘manufactured.’”70 The court decided: In order to resolve the ambiguity in the statutory language, we look first to other provisions of the statute. In a related section of the Omnibus Trade and Competitiveness Act of 1988 (which added 35 U.S.C. § 271(g)), the Act describes a person that uses a patented process to “produce” a product as a “manufacturer.” Similarly, section 287(b)(4)(A) refers to “a person then engaged in the manufacture of a product” as a person that makes the product. By referring to the party that produces a product as a “manufacturer” and the maker as a “person engaged in the manufacture of a product,” the statute clearly contemplates that “made” means “manufactured.” . . . The legislative history leads to the same conclusion: that Congress was concerned solely with physical goods that had undergone manufacture. Each and every reference to the provision that became section 271(g) describes it as directed to manufacturing.71

Thus, regarding the patentee’s assertion that there was infringement under Section 271(g) by the “importation into or use in the United States [of] knowledge and information reflecting the identification or characterization of a drug acquired from using the patented methods,” the court denied this claim, holding that “in order for a product to have been ‘made by a process patented in the United States’ it must have been a physical article that was ‘manufactured’ and that the production of information is not covered.”72 The court next considered the patentee’s assertion that Section 271(g) was infringed by “[the sale] in the United States [of] a drug that was determined

68. 69. 70. 71. 72.

Id. at 1370 (bracketing in original). Id. at 1371 (bracketing in original). Id. at 1372. Id. at 1372–74 (citations and footnotes omitted). Id. at 1377.

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to be an inhibitor or activator of a target protein using the patented methods.” In denying the patentee’s claim, the court stated: [The patentee also] alleged that, as a result of the claimed research process, Bayer produced drugs using information created by the patented processes. It is beyond dispute that a drug is a physical product that has been manufactured. The issue, therefore, is the necessary relationship under the statute between the “process patented in the United States” and the resulting product; i.e., we must determine whether a drug that was identified as useful through the use of a patented process is a “product which [was] made by [that] process.” 35 U.S.C. § 271(g) (2000). As we have previously noted: the statute [35 U.S.C. § 271(g)] does not specify what products will be considered to have been ‘made by’ the patented process, apparently because Congress wanted the courts to resolve this critical question of proximity to the product of the patented process on a case-by-case basis. Bio-Technology General Corp. v. Genentech, Inc., 80 F.3d 1553, 1561 (Fed. Cir. 1996). In Bio-Technology we affirmed the district court’s ruling that a protein made by a host organism expressing an inserted plasmid was a product “made by” the patented process for creating the plasmid itself. Id. Here, unlike the process in Bio-Technology, the patented process is not used in the actual synthesis of the drug product. We agree with the district court’s conclusion that “processes of identification and generation of data are not steps in the manufacture of a final drug product.” The statute requires that the allegedly infringing product have been “made by a process patented in the United States.” 35 U.S.C. § 271(g) (emphasis added). The pertinent dictionary definitions of “by” are “through the means or instrumentality of[;] . . . through the direct agency of[;] . . . through the medium of[;] . . . through the work or operation of.” Thus, the process must be used directly in the manufacture of the product, and not merely as a predicate process to identify the product to be manufactured. A drug product, the characteristics of which were studied using the claimed research processes, therefore, is not a product “made by” those claimed processes. Accordingly, [the patentee] did not state a claim of infringement by a Bayer drug product based on its asserted method claims.73

3. “Materially Changed” In American Cyanamid, the Federal Circuit exhaustively addressed the meaning of the “materially changed by subsequent processes” exemption of

73. Id. at 1377–78 (citations and footnotes omitted, bracketing and emphasis in original).


Section 271(g).74 The issue was whether there was infringement under Section 271(g) by the importation of a drug made outside the United States where a U.S. patent covered only a method of making a precursor to the final drug. Making the final drug from the precursor required several chemical reactions such that “[t]he chemical properties of the [precursor and final drug] are completely different, the ‘basic utility’ of the products is different, and the chemical structure of the two products is significantly different.”75 Specifically, in American Cyanamid the drug was the antibiotic cefaclor. Although cefaclor can be manufactured via different means, the drug that was imported in American Cyanamid was made by first making a chemical precursor called “compound 6.”76 The party asserting infringement under Section 271(g) had a patent only on a process of making compound 6;77 the patentee did not have patents on any of the process steps between making compound 6 and cefaclor.78 In order to make cefaclor from compound 6, four distinct chemical reactions are required that create four distinct chemical molecules: To produce cefaclor from compound 6 requires four distinct steps. First, the hydroxy group is removed from the 3-position and is replaced by a chlorine atom, which results in the creation of “compound 7.” Second, compound 7 is subjected to a reaction that removes the phenylacetyl group at the 7-position, which results in the creation of “compound 8.” Third, a phenylglycyl group is added at the 7-position, which results in the creation of “compound 9.” Fourth, the para-nitrobenzyl carboxylate ester is removed from the 4-position, which results in the creation of cefaclor.79

Moreover, compound 6 has no antibiotic activity.80 Further still, each of the chemical reactions between compound 6 and cefaclor change the chemical structure of the compound in ways that give the final product its antibiotic properties as well as its effectiveness when administered orally. Compound 6 differs from cefaclor in three respects. Although both compound 6 and cefaclor are based on the cephem nucleus, compound 6 has a hydroxy group at the 3-position on the cephem nucleus, a para-nitrobenzyl carboxylate ester at the 4-position, and a phenylacetyl group at the 7-position. Cefaclor has

74. 75. 76. 77. 78. 79. 80.

Eli Lilly & Co. v. Am. Cyanamid Co., 82 F.3d 1568 (Fed. Cir. 1996). Id. at 1577. Id. at 1570. Id. Id. Id. Id.

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208 Chapter 5 Patent Law Principle II: Infringement different groups at each of those positions: it has a chlorine atom at the 3-position, a free carboxyl group at the 4-position, and a phenylglycyl group at the 7-position. Each of those differences between compound 6 and cefaclor contributes to the effectiveness of cefaclor as an orally administered antibiotic drug. The free carboxyl group at the 4-position is believed important for antibacterial activity; the chlorine increases cefaclor’s antibiotic potency; and the phenylglycyl group enables cefaclor to be effective when taken orally.81

In deciding the case, the Federal Circuit exhaustively considered the extensive legislative history of Section 271(g). However, rather than defining the phrase materially changed by subsequent processes, the court limited its holding to the facts of the case.82 It ruled that the patentee was unlikely to prevail on the merits83 in its assertion of infringement under Section 271(g) by the importation of cefaclor made using the patented process to make the precursor compound 6 because cefaclor was “materially changed” in its “structure and properties” from compound 6. In the chemical context, a “material” change in a compound is most naturally viewed as a significant change in the compound’s structure and properties. Without attempting to define with precision what classes of changes would be material and what would not, we share the district court’s view that a change in chemical structure and properties as significant as the change between compound 6 and cefaclor cannot lightly be dismissed as immaterial. Although compound 6 and cefaclor share the basic cephem nucleus, which is the ultimate source of the antibiotic potential of all cephalosporins, the cephem nucleus is common to thousands of compounds, many of which have antibiotic activity, and many of which are dramatically different from others within the cephem family. Beyond the cephem nucleus that they have in common, compound 6 and cefaclor are different in four important structural respects, corresponding to the four discrete chemical steps between the two compounds. While the addition or removal of a protective group, standing alone, might not be sufficient to constitute a “material change” between two compounds (even though it could dramatically affect certain of their properties), the conversion process between compound 6 and cefaclor involves considerably more than the removal of a protective group. We therefore conclude that the statutory text of section 271(g)

81. Id. (emphasis added). 82. Id. 83. The Federal Circuit did not hold (and could not have held) that there was no infringement under Section 271(g) because the issue before the court was solely whether the patentee was likely to prevail on the merits of its Section 271(g) infringement charge in the context of the district court’s denial of a preliminary injunction.

Joint (Divided) Infringement 209 does not support Lilly’s contention that it is likely to prevail on the merits of its infringement claim.84

II. Joint (Divided) Infringement Joint infringement (sometimes referred to as divided infringement) is a nonstatutory, judicially recognized form of infringement that occurs when two85 different parties perform acts necessary for infringement, but only one party is liable for infringement as the “mastermind” who “directs or controls” the infringing acts of the other party.86 Courts have held that the party directing or controlling the infringing acts of the other party (the “mastermind” of the infringement) is vicariously liable for the acts of the other party and thus solely liable for the infringement.87

A. Only One Party May Be Liable for Infringement, and That Party Must Perform All Infringing Acts Corresponding to a Claim’s Limitations Even in its joint infringement decisions, the Federal Circuit has insisted: Direct infringement requires a party to perform or use each and every step or element of a claimed method or product. Warner-Jenkinson Corp. v. Hilton Davis Corp., 520 U.S. 17, 117 S. Ct. 1040, 137 L. Ed. 2d 146 (1997) (holding that the doctrine of equivalents, like literal infringement, must be tested element by element); Canton Bio-Med., Inc. v. Integrated Liner Techs., Inc., 216 F.3d 1367, 1370 (Fed. Cir. 2000); Gen. Foods Corp. v. Studiengesellschaft Kohle mbH, 972 F.2d 1272, 1274 (Fed. Cir. 1992). For process patent or method patent claims, infringement occurs when a party performs all of the steps of the process. Joy Technologies v. Flakt, Inc., 6 F.3d 770, 773 (Fed. Cir. 1993).88

84. Id. at 1573. 85. While the cases on this issue have concerned two parties, there appears to be no reason why joint infringement cannot apply to the acts of two or more parties, as long as only one party is liable for infringement due to “directing and controlling” the acts of the others as the “mastermind” of the infringement. 86. Muniauction, Inc. v. Thomson Corp., 532 F.3d 1318 (Fed. Cir. 2008); BMC Resources, Inc. v. Paymentech, L.P., 498 F.3d 1373 (Fed. Cir. 2007). 87. Muniauction, 532 F.3d at 1329–30; BMC Resources, 498 F.3d at 1379–81. 88. BMC Resources, 498 F.3d at 1378–79 (emphasis added); Muniauction, 532 F.3d at 1328 (“The law of this circuit is axiomatic that a method claim is directly infringed only if each step of the claimed method is performed.”).

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B. The Infringer Must “Direct or Control” the Acts of Another to Be Held Solely Liable for Infringement Under Vicarious Liability Notwithstanding the above-discussed Federal Circuit insistence that infringement requires one party to perform all infringing acts corresponding to a claim’s limitations, the Federal Circuit recognizes that in joint infringement, liability for infringement can occur where one party does not perform every step of a claim.89 However, under these circumstances infringement liability still attaches to only one party:90 the one who is the infringement “mastermind” who performs some steps and “directs or controls” the actions of another party who performs the others.91 The Federal Circuit has explained that the infringer is vicariously liable for the acts of the other that were under the infringer’s direction or control. “[T]he law imposes vicarious liability on a party for the acts of another in circumstances showing that the liable party controlled the conduct of the acting party.”92 The Federal Circuit has been clear that joint infringement liability falls under direct infringement liability as set forth in Section 271(a) of the Patent Statute when a single party performs—or has performed for it under its “direction or control”—every act necessary to infringe a patent’s claim. For example, as stated in BMC: Infringement requires, as it always has, a showing that a defendant has practiced each and every element of the claimed invention. Warner-Jenkinson, 520 U.S. at 40 (element-by-element analysis for doctrine of equivalents). This holding derives from the statute itself, which states “whoever without authority makes, uses, offers to sell, or sells any patented invention within the United States, or imports into the United States any patented invention during the term of the patent therefor, infringes the patent.” 35 U.S.C. § 271(a) (2000). Thus, liability for infringement requires a party to make, use, sell, or offer to sell the patented invention, meaning the entire patented invention.93

An earlier Federal Circuit case, On Demand, had seemingly indicated that if more than one party perform the acts necessary to infringe a claim, more than one party may be liable for infringement as joint infringers.94

89. 90. 91. 92. 93. 94.

Muniauction, 532 F.3d at 1329–30; BMC Resources, 498 F.3d at 1379–81. Muniauction, 532 F.3d at 1329–30; BMC Resources, 498 F.3d at 1379–81. Muniauction, 532 F.3d at 1329–30; BMC Resources, 498 F.3d at 1379–81. BMC Resources, 498 F.3d at 1379; Muniauction, 532 F.3d at 1330. BMC Resources, 498 F.3d at 1379–80. On Demand Mach. Corp. v. Ingram Indus., Inc., 442 F.3d 1331, 1344–45 (Fed. Cir. 2006), distinguished on relevant issue, BMC Resources, 498 F.3d at 1379–80.

Joint (Divided) Infringement 211

However, the Federal Circuit in BMC dismissed any discussion of joint liability for infringement in On Demand as dictum: The district court considered On Demand and determined that it did not change the traditional standard requiring a single party to perform all steps of a claimed method. It further noted that the On Demand decision did not in any way rely on the relationship between the parties. As such, the district court concluded that “[b]ecause the district court’s definition of ‘connection’ was not relied on in the panel’s conclusion, the Court refuses to read the panel’s dictum that it found ‘no flaw’ as a wholesale adoption of the district court’s jury instruction.” The district court properly analyzed the law and this court’s cases. As Paymentech succinctly noted in its brief, “[i]t is unlikely the Court intended to make a major change in its jurisprudence in the On Demand [statement] that was not even directly necessary to its decision in the case.” In other words, BMC’s interpretation of On Demand goes beyond settled law. On Demand did not change this court’s precedent with regard to joint infringement. Infringement requires, as it always has, a showing that a defendant has practiced each and every element of the claimed invention.95

C. An “Arm’s Length” Relationship Is Not Sufficient for Vicarious Liability for Joint Infringement The Federal Circuit has held that an “arm’s-length” relationship between parties where the combined acts of the parties infringe does not provide sufficient “control or direction” by one party over the acts of the other sufficient to hold that party vicariously liable.96 Thus, “mere ‘arm-length cooperation’ will not give rise to direct infringement by any party.”97 As explained by the Federal Circuit in BMC: A party cannot avoid infringement, however, simply by contracting out steps of a patented process to another entity. In those cases, the party in control would be liable for direct infringement. It would be unfair indeed for the mastermind in such situations to escape liability. . . . This court acknowledges that the standard requiring control or direction for a finding of joint infringement may in some circumstances allow parties to enter into arms-length agreements to avoid infringement. Nonetheless, this

95. BMC Resources, 498 F.3d at 1380 (citations omitted). 96. Muniauction, 532 F.3d at 1329; BMC Resources, 498 F.3d at 1380–81. 97. Muniauction, 532 F.3d at 1329; BMC Resources, 498 F.3d at 1380–81.

212

Chapter 5 Patent Law Principle II: Infringement concern does not outweigh concerns over expanding the rules governing direct infringement. . . .98

The BMC court then offered: The concerns over a party avoiding infringement by arms-length cooperation can usually be offset by proper claim drafting. A patentee can usually structure a claim to capture infringement by a single party. In this case, for example, BMC could have drafted its claims to focus on one entity. The steps of the claim might have featured references to a single party’s supplying or receiving each element of the claimed process. However, BMC chose instead to have four different parties perform different acts within one claim.99

Further, the Federal Circuit in succinctly described joint infringement in Muniauction: In BMC Resources, this court clarified the proper standard for whether a method claim is directly infringed by the combined actions of multiple parties. The court’s analysis was founded on the proposition that direct infringement requires a single party to perform every step of a claimed method. 498 F.3d at 1380 (concluding that this requirement derived directly from 35 U.S.C. § 271(a)); see also NTP, Inc. v. Research in Motion, 418 F.3d 1282, 1317–18 (Fed. Cir. 2005) (holding that users of accused system could not infringe method claims in the United States because one step of the method was performed in Canada). Yet the court recognized a tension between this proposition and the well-settled rule that “a defendant cannot thus avoid liability for direct infringement by having someone else carry out one or more of the claimed steps on its behalf.” Id. at 1379. Accordingly, where the actions of multiple parties combine to perform every step of a claimed method, the claim is directly infringed only if one party exercises “control or direction” over the entire process such that every step is attributable to the controlling party, i.e., the “mastermind.” Id. at 1380–81. At the other end of this multi-party spectrum, mere “arms-length cooperation” will not give rise to direct infringement by any party. Id. at 1381. Under BMC Resources then, the issue of infringement in this case turns on whether [the defendant] sufficiently controls or directs other parties (e.g., the bidder) such that [the defendant] itself can be said to have performed every step of the asserted claims. . . . Under BMC Resources, the control or direction standard is satisfied in situations where the law would traditionally hold the accused direct infringer vicariously liable for the acts committed by another party that are required to complete

98. BMC Resources, 498 F.3d at 1381. 99. Id. (citations omitted).

Joint (Divided) Infringement 213 performance of a claimed method. 498 F.3d at 1379; accord Int’l Rectifier v. Samsung Elecs. Co., 361 F.3d 1355, 1361 (Fed. Cir. 2004) (reversing district court’s ruling that Samsung violated a permanent injunction prohibiting infringement in the United States on the grounds that Samsung did not control or participate in the extraterritorial activities of a third party such that the acts of the third party were not attributable to Samsung). In this case, [the defendant] neither performed every step of the claimed methods nor had another party perform steps on its behalf, and Muniauction has identified no legal theory under which [the defendant] might be vicariously liable for the actions of the bidders. Therefore, [the defendant] does not infringe the asserted claims as a matter of law.100

D. Every Act Corresponding to a Limitation of a Method Claim Must Be Performed in the United States in Order for a Method Claim to Be Infringed The Federal Circuit has held that every act corresponding to every limitation of a method claim must be performed in the United States in order for a method claim to be infringed.101 This holding is similar to the requirement of Section 271(a) discussed above that a single party must personally perform acts—or direct or control another to perform acts—that correspond with every limitation of a claim in order for that claim to be infringed under Section 271(a). More specifically, in NTP, Research in Motion (“RIM”) (the company responsible for Blackberry® wireless e-mail) was sued for direct infringement, inducement of infringement, and contributory infringement of several U.S. patents, including some having method claims.102 The method claims involved methods of transmitting e-mail wirelessly by wireless transmission of electronic information from certain devices to other devices.103 Each of the method claims had limitations to “a step that utilizes an ‘interface’ or ‘interface switch,’ which is only satisfied by the use of RIM’s Relay located in Canada.”104 RIM and RIM’s customers performed acts corresponding to every step (limitation) in the asserted method claims except the step of the “interface or interface switch,” which was performed in Canada.105 Thus, the Federal Circuit was faced with the question of “whether the using . . . a patented invention is

100. 101. 102. 103. 104. 105.

Muniauction, 532 F.3d at 1329–30. NTP, Inc. v. Research in Motion, Ltd., 418 F.3d 1282, 1318 (Fed. Cir. 2005). Id. at 1290–91. Id. at 1294–95. Id. at 1318. Id.

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an infringement under section 271(a) if a . . . step of the patented invention is . . . performed abroad.”106 The court held that in order to infringe a method claim under Section 271(a), every act corresponding to every step (limitation) of a method claim must be performed in the United States: A method or process consists of one or more operative steps, and, accordingly, “it is well established that a patent for a method or process is not infringed unless all steps or stages of the claimed process are utilized.” Roberts Dairy Co. v. United States, 208 Ct. Cl. 830, 530 F.2d 1342, 1354 (Ct. Cl. 1976). Because a process is nothing more than the sequence of actions of which it is comprised, the use of a process necessarily involves doing or performing each of the steps recited. . . . We therefore hold that a process cannot be used “within” the United States as required by section 271(a) unless each of the steps is performed within this country. In the present case, each of the asserted method claims of the ’960, ’172, and ’451 patents recites a step that utilizes an “interface” or “interface switch,” which is only satisfied by the use of RIM’s Relay located in Canada. Therefore, as a matter of law, these claimed methods could not be infringed by use of RIM’s system. See Eli Lilly & Co. v. Am. Cyanamid Co., 82 F.3d 1568, 1571 (Fed. Cir. 1996) (discussing the enactment of section 271(g) and stating that “prior to the enactment of the [Process Patents Amendments Act of 1988], a patentee holding a process patent could sue for infringement if others used the process in this country, but had no cause of action if such persons used the patented process abroad to manufacture products, and then imported, used, or sold the products in this country”); see also Zoltek Corp. v. United States, 51 Fed. Cl. 829, 836 (2002) (stating that “if a private party practiced even one step of a patented process outside the United States, it avoided infringement liability, as [section 271(a)] was limited to acts committed within the United States”). Thus, we agree with RIM that a finding of direct infringement by RIM’s customers under section 271(a) of the method claims reciting an “interface switch” or an “interface” is precluded by the location of RIM’s Relay in Canada. As a consequence, RIM cannot be liable for induced or contributory infringement of the asserted method claims, as a matter of law.107

III. Section 271(e)(1) “Safe Harbor” Section 271(e)(1) of the Patent Statute provides a “safe harbor” whereby certain activities related to obtaining FDA approval to market products in the

106. Id. at 1315. 107. Id. at 1318 (footnotes omitted, emphasis added).

Section 271(e)(1) “Safe Harbor” 215

United States are exempt from patent infringement liability. As explained below, Section 271(e)(1) was enacted as part of the Hatch-Waxman Act, and is codified at 35 U.S.C. § 271(e)(1). It states in relevant part: It shall not be an act of infringement to make, use, offer to sell, or sell within the United States or import into the United States a patented invention . . . solely for uses reasonably related to the development and submission of information under a Federal law which regulates the manufacture, use, or sale of drugs or veterinary biological products.108

A. The “Safe Harbor” Provision Is in Parallel with Patent Term Restoration of the Hatch-Waxman Act The U.S. Supreme Court and the Federal Circuit have ruled that the safe harbor infringement exemption of the Hatch-Waxman Act (35 U.S.C. § 271(e)(1)) was intended by Congress to operate in parallel with patent term extension of the Hatch-Waxman Act (35 U.S.C. § 156). As explained by the Federal Circuit: Congress enacted the Hatch-Waxman Act in order to eliminate two unintended distortions of the effective patent term resulting from the premarket approval required for certain products by the FDCA. n1. n1: Under the FDCA, various products are subject to FDA regulatory review prior to market entry. See, e.g., 21 U.S.C. § 360e (medical devices); § 348 (food additives); § 376 (color additives); and § 355 (new drugs). The first distortion was the reduction of effective patent life caused by FDA premarket approval. Because patent applications were filed early in the regulatory process, but market entry was delayed pending regulatory review, the early years of the patent term were spent obtaining premarket approval for the patented invention rather than generating profits. Eli Lilly & Co. v. Medtronic, Inc., 496 U.S. 661, 669, 110 S. Ct. 2683, 110 L. Ed. 2d 605 (1990). The second distortion was the de facto extension of effective patent life at the end of the patent term, which also resulted from FDA premarket approval requirements. Prior to the Hatch-Waxman Act, competitors’ activities involving a patented invention during the patent term constituted an act of infringement, even if undertaken for the sole purpose of obtaining FDA regulatory approval. See Roche Prods., Inc. v. Bolar Pharms. Co., 733 F.2d 858 (Fed. Cir. 1984), cert. denied,

108. 35 U.S.C.S. § 271(e)(1) (2009).

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Chapter 5 Patent Law Principle II: Infringement 469 U.S. 856, 105 S. Ct. 183, 83 L. Ed. 2d 117 (1984). Because such activities could not begin until patent expiration, patent owners enjoyed a de facto patent term extension while competitors spent time following patent expiration obtaining FDA premarket approval necessary for market entry. Eli Lilly, 496 U.S. at 670. The Hatch-Waxman Act sought to eliminate these distortions via two key provisions, now codified at 35 U.S.C. §§ 156 and 271(e)(1). The first provision, section 156, sought to eliminate de facto patent term reduction by providing patent term extension for those patents claiming a “product” subject to regulatory delays caused by the FDA premarket approval process. n2. n2 In relevant part, section 156 provides: The term of a patent which claims a product, a method of using a product, or a method of manufacturing a product shall be extended in accordance with this section from the original expiration date of the patent . . . if– (4) the product has been subject to a regulatory review period before its commercial marketing or use. . . . 35 U.S.C. § 156(a). For purposes of section 156, the term “product” means a “drug product” and “[a]ny medical device, food additive, or color additive subject to regulation under the [FDCA.]” 35 U.S.C. § 156(f). The second provision, section 271(e)(1), sought to eliminate de facto patent term extension. It sought to do so by providing a safe harbor that immunized competitors from infringement on account of making, using, offering to sell, or selling within the United States or importing into the United States a “patented invention . . . solely for uses reasonably related to the development and submission of information under a Federal law which regulates the manufacture, use, or sale of drugs or veterinary biological products.” 35 U.S.C. § 271(e)(1). The basic idea behind this provision was to allow competitors to begin the regulatory approval process while the patent was still in force, followed by market entry immediately upon patent expiration. Thus, in Telectronics Pacing Systems v. Ventritex, Inc., 982 F.2d 1520 (Fed. Cir. 1992), we pointed out that, as a result of section 271(e)(1), “a competitor who anticipates coming into the marketplace with a product that utilizes a currently patented invention may make, use, and sell that product so long as it is ‘solely for uses reasonably related to the development and submission of information under a Federal law which regulates the manufacture, use, or sale of drugs.’ ” Id. at 1525.109

109. Proveris Sci. Corp. v. Innovasystems, Inc., 536 F.3d 1256, 1260–61 (Fed. Cir. 2008) (bracketing in original).


The U.S. Supreme Court has also noted the relationship between HatchWaxman Sections 156 and 271(e)(1) of the Patent Statute: It seems most implausible to us that Congress, being demonstrably aware of the dual distorting effects of regulatory approval requirements in this entire area— dual distorting effects that were roughly offsetting, the disadvantage at the beginning of the term producing a more or less corresponding advantage at the end of the term—should choose to address both those distortions only for drug products; and for other products named in [35 U.S.C. § 156(f)] should enact provisions which not only leave in place an anticompetitive restriction at the end of the monopoly term but simultaneously expand the monopoly term itself, thereby not only failing to eliminate but positively aggravating distortion of the 17-year patent protection. It would take strong evidence to persuade us that this is what Congress wrought, and there is no such evidence here.110

The Lilly Supreme Court noted that interpreting the phrase patented invention in section 271(e)(1) to include all products listed in section 156(f) produced a “perfect ‘product’ fit” between the two provisions.111 The Court pointed out that all of the products eligible for patent term extension under section 156—including drugs, medical devices, food additives, and color additives—were subject to FDA premarket approval.112 Conversely, all products subject to premarket approval that were not eligible for patent term extension under section 156(f)—such as new animal drugs and veterinary biological products—were excluded from the section 271(e)(1) safe harbor provision as well.113 Because of this nearly perfect product correlation between sections 156 and 271(e)(1), and the roughly offsetting patent term distortions those two provisions were designed to address, the Court essentially interpreted section 271(e)(1) to include at least “all inventions” within the ambit of section 156.114

B. The Safe Harbor Covers Only Patents on Products Subject to FDA Regulatory Approval In a number of decisions, the U.S. Supreme Court and the Federal Circuit have developed precedent that, based on the above-discussed relationship

110. Eli Lilly & Co. v. Medtronic, Inc., 496 U.S. 661, 672–73, 110 S. Ct. 2683, 110 L. Ed. 2d 605 (1990). 111. Id. 496 U.S. at 672. 112. Id. 113. Id. at 674. 114. See id. at 673–74.

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between Sections 156 and 271(e)(1) of the Hatch-Waxman Act, the safe harbor of Section 271(e)(1) applies to products that are the subject of FDA review and approval. Conversely, the safe harbor provision does not apply to products not the subject of FDA regulatory review and approval (such as research tools). 1. U.S. Supreme Court and Federal Circuit Cases Holding That Section 271(e)(1) Applies to Products Subject to FDA Regulatory Approval In Eli Lilly, the U.S. Supreme Court relied on the above-discussed “perfect fit” between Sections 156 and 271(e)(1) of the Hatch-Waxman act in holding that use of a cardiac defibrillator for FDA-related purposes fell within the safe harbor of Section 271(e)(1) because the device was subject to premarket approval by the FDA.115 More specifically, the Court addressed the issue of whether a patented cardiac defibrillator fell within the Section 271(e)(1) safe harbor.116 In the matter, Lilly filed an infringement action against Medtronic seeking to enjoin Medtronic from testing and marketing an implantable cardiac defibrillator. Lilly claimed that Medtronic’s actions infringed two of its patents, but Medtronic argued that its activities were reasonably related to the development and submission of information to the FDA, and thus exempt from a finding of infringement under section 271(e)(1).117 The district court rejected Medtronic’s argument, concluding that the exemption did not apply to the development and submission of information relating to medical devices. The jury returned a verdict for Lilly on infringement of the first patent. After the district court directed a verdict for Lilly on infringement of the second patent, it entered judgment for Lilly and issued a permanent injunction against infringement of both patents.118 On appeal, the Federal Circuit reversed, holding that by virtue of Section 271(e)(1), Medtronic’s activities could not constitute infringement if they were undertaken to obtain information reasonably related to the development and submission of information necessary to obtain regulatory approval from the FDA to market the defibrillator in the United States.119 The court remanded to the district court for a determination whether that condition had been met.120

115. 116. 117. 118. 119. 120.

Id. at 699. Id. at 664. Id. Id. Id. Id.


The Supreme Court granted certiorari to consider whether the scope of the Section 271(e)(1) safe harbor was limited to drugs or also extended to medical devices such as Medtronic’s defibrillator. The Court held that, based upon “the structure of the [Hatch-Waxman] Act taken as a whole,” medical devices were covered.121 As discussed above, the Court premised its holding on its interpretation of the phrase “patented invention” in Section 271(e)(1) as including all products listed in Section 156(f).122 The Court noted that this produced a “perfect ‘product’ fit” between the two provisions.123 The Court then pointed out that all of the products eligible for patent term extension under Section 156—including drugs, medical devices, food additives, and color additives—were subject to FDA premarket approval.124 Conversely, all products subject to premarket approval that were not eligible for patent term extension under Section 156(f) (such as new animal drugs and veterinary biological products) were excluded from the Section 271(e)(1) safe harbor provision.125 Because of this nearly perfect product correlation between Sections 156 and 271(e)(1) and the roughly offsetting patent term distortions those two provisions were designed to address, the Court essentially interpreted Section 271(e)(1) to include at least “all inventions” within the ambit of Section 156.126 The Supreme Court also addressed the Section 271(e)(1) safe harbor infringement exemption in Merck v. Integra,127 in which it interpreted the phrase “reasonably related” in determining whether Section 271(e)(1) immunizes the use of patented inventions in preclinical research if the experimental results are never submitted to the FDA.128 The patented compounds in Merck were used in preclinical studies to identify and evaluate drugs useful for inhibiting angiogenesis.129 The Court held that “reasonably related” activity does not require actual submission of information to the FDA.130 The court further held that Section 271(e)(1) also includes those situations in which a party has “a reasonable basis for believing that a patented compound may work, through a particular biological process, to produce a particular physiological effect, and uses the compound in research that, if successful, would be appropriate to include in a submission to the FDA. . . .”131 On remand, the Federal Circuit

121. 122. 123. 124. 125. 126. 127. 128. 129. 130. 131.

Id. at 699. Id. Id. 672. Id. Id. at 674. See id. at 673–74. Merck KGaA v. Integra Lifesciences I, Ltd., 545 U.S. 193, 125 S. Ct. 2372, 162 L. Ed. 2d 160 (2005). Id. at 545 U.S. 195. Id. at 198–99. Id. Id. at 206–7.

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held that the preclinical research in question was “reasonably related” to FDA approval, and thus was immune from infringement.132 The Federal Circuit addressed a somewhat similar issue in AbTox.133 AbTox sued a company for infringement of an AbTox patent that claimed a medical device used in sterilizing medical instruments.134 Due to the varying levels of FDA regulation for different medical devices, the patented medical device in AbTox presented an issue not confronted in Eli Lilly. Although all three FDA categories of medical devices (Classes I, II, and III) are subject to varying levels of FDA premarket approval, only Class III medical devices are eligible for patent term extension under Section 156.135 Both AbTox’s invention and defendants’ products were Class II medical devices and thus ineligible for patent term extension, unlike the eligible Class III medical device in Eli Lilly. Faced with tension between the Supreme Court’s broader holding in Eli Lilly that “patented invention” means “all inventions” within Section 156 and the Supreme Court’s narrower focus on statutory symmetry between the two provisions, the Federal Circuit adopted the broader holding that the phrase “patented invention” of Section 271(e)(1) includes any medical device regardless of its eligibility for patent term extension under Section 156.136 2. Section 271(e)(1) Does Not Apply to Products That Are Not Subject to FDA Regulatory Approval (For Example, “Research Tools” That Are Not Themselves Subject to FDA Regulatory Approval) In Proveris v. Innovasystems, the Federal Circuit held based on the above-discussed relationship between Sections 156 and 271(e)(1) of the Hatch-Waxman Act that the safe harbor infringement exemption of Section 271(e)(1) does not apply to products that are not the subject of FDA regulatory review and approval, but that are used in research reasonably related to the development and submission of information to the FDA.137 In Innovasystems, the patent was directed to a system and apparatus for characterizing aerosol sprays commonly used in various drug delivery devices, such as nasal spray pumps and inhalers.138 As explained by the court: During drug research and development, spray characterization measurements are frequently used to calibrate drug delivery devices in accordance with the exact physical properties of a particular drug, in order to maximize the efficiency and

132. 133. 134. 135. 136. 137. 138.

Integra Lifesciences I, Ltd. v. Merck KGaA, 496 F.3d 1334, 1348 (Fed. Cir. 2007). AbTox, Inc. v. Exitron Corp., 122 F.3d 1019 (Fed. Cir. 1997). Id. at 1020–21. Id. at 1028–29. Id. Proveris Sci. Corp. v. Innovasystems, Inc., 536 F.3d 1256 (Fed. Cir. 2008). Id. at 1258.

Section 271(e)(1) “Safe Harbor” 221 effectiveness of drug delivery. According to the ’400 patent, spray characterization also plays an important role in the regulatory approval process of the Food and Drug Administration (“FDA”) under the Federal Food, Drug, and Cosmetic Act (“FDCA”), Pub. L. No. 75-717, ch. 675, 52 Stat. 1040 (1938) (codified at scattered sections of title 21 of the United States Code). The ’400 patent states that under the FDCA, FDA approval is required for inhaler-based drug delivery devices. The system and apparatus claimed in the ’400 patent are not themselves subject to FDA approval, however.139

The court further explained: Innova makes and sells a device known as the Optical Spray Analyzer (“OSA”). The OSA itself is not subject to FDA approval. It is, however, used in connection with FDA regulatory submissions. In that setting, the device measures the physical parameters of aerosol sprays used in nasal spray drug delivery devices. In December of 2005, Proveris filed suit against Innova in the District of Massachusetts, alleging infringement of claims 1–10 and 13 of the ’400 patent. As part of its defense, Innova invoked the safe harbor provision of the Hatch-Waxman Act. . . . [As] codified at 35 U.S.C. § 271(e)(1). . . . Innova argued that its allegedly infringing activities are immunized by this provision because its OSA devices are used by third parties solely for the development and submission of information to the FDA.140

In making its decision, the Federal Circuit first addressed at length the U.S. Supreme Court and Federal Circuit precedent discussed above, noting the “perfect fit” relationship between Hatch-Waxman Act Sections 156 and 271(e)(1) of the U.S. Patent Statute.141 The court concluded that under this statutory scheme, the safe harbor research exemption of Section 271(e)(1) only extends to products that are subject to FDA regulatory approval.142 As to the facts of the case, the court stated: We turn now to the parties’ contentions on appeal. Innova argues that it is entitled to the benefit of the section 271(e)(1) safe harbor because it is undisputed that it has only offered to sell the OSA to pharmaceutical companies and the FDA. Innova also states that it is undisputed that the OSA is and was used exclusively in applications for regulatory approval in accordance with the requirements of the FDCA. Innova urges that “Congress wrote § 271(e)(1) extremely broadly” when it said that it was not an act of infringement to sell a

139. 140. 141. 142.

Id. Id. at 1259–60. Id. at 1260–64. Id.

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Chapter 5 Patent Law Principle II: Infringement “patented invention . . . solely for uses reasonably related to the development and submission of information under a Federal law which regulates the manufacture, use, or sale of drugs or veterinary biological products.” According to Innova, Congress intended to include within the safe harbor all “patented inventions” unless specifically excluded. Innova contends that both Lilly and Merck support its position and that the safe harbor provision should not be limited so as to exclude research tools—assuming its OSA device is viewed as such. Proveris responds that “[t]he patented inventions that fall within the scope of § 271(e)(1) do not include patents on equipment that may be used in a pharmaceutical laboratory, such as microscopes, analytical balances, computers, and Proveris’s Spray VIEW equipment.” Proveris states that Congress created the patent term extension for “products” in 35 U.S.C. § 156(a) when it created the safe harbor in section 271(e)(1), doing so within the context of providing generic drug developers with the means to compete commercially immediately upon the expiration of a drug’s patent. Under these circumstances, Proveris reasons, section 271(e)(1) extends only to the infringement of patents that claim “products” as that term is defined in section 156(f) and to other patented inventions that are inherent to the development of “products.” Thus, in Proveris’s view, the patents which may be infringed with immunity, if the infringement is solely for uses reasonably related to the development and submission of information to the FDA, include patents on drug products, medical devices, food additives, and color additives. According to Proveris, section 271(e)(1) does not immunize infringement of patents on laboratory or manufacturing equipment. Proveris also argues that Innova’s OSA device is not “reasonably related” to FDA submissions because Innova’s infringement is not for purposes of its own FDArelated research, but rather for commercial sale to third parties engaged in such research.143

The court went on: The district court’s ruling and the parties’ contentions clearly frame the question before us: whether section 271(e)(1) immunizes the manufacture, marketing, or sale of Innova’s OSA, which is used in the development of FDA regulatory submissions, but is not itself subject to the FDA premarket approval process. For the reasons set forth below, we hold that the section 271(e)(1) safe harbor does not immunize the OSA from infringement.144

The court explained: We think the Supreme Court’s approach in Eli Lilly is instructive. In Eli Lilly, the Court examined the language of section 271(e)(1) in light of the overall

143. Id. at 1264. 144. Id. at 1265 (emphasis added).

Section 271(e)(1) “Safe Harbor” 223 statutory structure and underlying policy considerations leading to the enactment of the Hatch-Waxman Act. In that regard, as seen, sections 156 and 271(e) (1) were enacted in order to eliminate two unintended distortions of the effective patent term resulting from premarket approval required of certain products pursuant to the FDCA. In Eli Lilly, the Supreme Court explained that the first distortion was the reduction of effective patent life caused by the FDA premarket approval process, while the second distortion was the de facto extension of effective patent life at the end of the patent term—also caused by the FDA premarket approval process. 496 U.S. at 669–70. The first distortion adversely affected patentees; the second distortion adversely affected those seeking FDA approval in order to enter the market to compete with patentees. It is the second distortion that is relevant to this case. As far as the second distortion is concerned, Innova’s OSA device is not subject to FDA premarket approval. Rather, FDA premarket approval is required only in the case of the aerosol drug delivery product whose spray plume characteristics the OSA measures. In short, Innova is not a party seeking FDA approval for a product in order to enter the market to compete with patentees. Because the OSA device is not subject to FDA premarket approval, and therefore faces no regulatory barriers to market entry upon patent expiration, Innova is not a party who, prior to enactment of the Hatch-Waxman Act, could be said to have been adversely affected by the second distortion. For this reason, we do not think Congress could have intended that the safe harbor of section 271(e)(1) apply to it. Put another way, insofar as its OSA device is concerned, Innova is not within the category of entities for whom the safe harbor provision was designed to provide relief. We thus agree with the district court that Innova is not entitled to the benefit of the section 271(e)(1) safe harbor.145

The court further noted: At the same time, just as Innova is not a party who, prior to enactment of the Hatch-Waxman Act, could be said to have been adversely affected by the second distortion discussed by the Supreme Court in Eli Lilly, so too Proveris is not a party who, prior to enactment of the Act, could be said to have been adversely affected by the first distortion. That is because Proveris is not a patentee who would have been faced with a reduction of effective patent life caused by the FDA approval process, the reason being that the invention claimed in the ’400 patent is not subject to the premarket approval required by the FDCA. We think this is significant because, as noted above, in Eli Lilly the Court spoke of its interpreting the phrase “patented invention” in section 271(e)(1) to include all products listed in section 156(f) as producing a “perfect ‘product’ fit” between the two provisions. 496 U.S. at 672. The result we reach today achieves the same kind of fit, or symmetry. Because Proveris’s patented product is not subject to a

145. Id. (emphasis added).

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Chapter 5 Patent Law Principle II: Infringement required FDCA approval process, it is not eligible for the benefit of the patent term extension afforded by 35 U.S.C. § 156(f). At the same time, because Innova’s OSA device also is not subject to a required FDCA approval process, it does not need the safe harbor protection afforded by 35 U.S.C. § 271(e)(1). As seen, Innova argues that it is entitled to the protection of section 271(e)(1)’s safe harbor because it is offering for sale and selling a “patented invention” (the invention claimed in the ’400 patent) “solely for uses reasonably related to the development and submission of information under a Federal law which regulates the manufacture, use, or sale of drugs or veterinary biological products.” Innova’s position is that its offering for sale and its sale of the OSA device fit squarely within the statutory language because, like the product claimed in the ’400 patent, the OSA is used in a way which is “reasonably related” to the “development and submission of information” pertinent to the FDA premarket approval required for inhaler-based drug delivery devices. The problem with that argument is that it is premised on the proposition that the device claimed in the ’400 patent is, for purposes of section 271(e)(1), a “patented invention.” As we have just seen, it is not. We therefore reject the argument. For the foregoing reasons, we see no error in the ruling of the district court that Innova’s marketing and sale of its OSA device are not exempted from infringement by the safe harbor provision of 35 U.S.C. § 271(e)(1).146

One of the important outcomes of Innovasystems is that “research tools,” such as machines used in measuring data from experiments being conducted for products for FDA approval, are not covered by the Section 271(e)(1) safe harbor infringement exemption as long as the tools are not subject to FDA regulatory review and approval.

IV. Practice Points A. Be Aware of Indirect Infringement When evaluating and opining on potential infringement of U.S. patents, always be aware of and consider the possibility of indirect infringement. Most infringement is direct infringement in which a party makes, uses, sells, or offers to sell in the United States (or imports into the United States) a patented invention without permission from the patentee. However, U.S. law also provides for indirect infringement, which includes: (a) inducing another to directly infringe; (b) contributing to the direct infringement of another; (c) supplying or causing to be supplied from the United States components for

146. Id. at 1265–66 (emphasis added).

Practice Points

assembly abroad where the assembly would infringe a U.S. patent if done in the United States; and (d) importing into the United States, or using, selling, or offering to sell in the United States, a product made abroad by a process that would infringe a U.S. process patent if the imported product was made in the United States. Additionally, U.S. courts recognize a form of vicarious liability (called joint or divided infringement) for infringement in which a single party does not perform every act necessary to infringe a patent claim, but exercises control or direction over another who performs the additional acts necessary for infringement.

B. Direct Infringement Is Always Required For Indirect Infringement All forms of indirect infringement require direct infringement or at least the possibility of it. Both inducement of another to infringe (Section 271(b)) and contributory infringement (Section 271(c)) require direct infringement. Infringement under Section 271(f) requires proof that the assembly of the components supplied from the United States would infringe a U.S. patent if assembled in the United States. In addition, infringement under Section 271(g) requires proof that the product imported into the United States was made by a process that would infringe a U.S. process patent if the imported product was made in the United States. Therefore, a necessary element in proving any form of indirect infringement is proving direct infringement or the possibility of direct infringement.

C. Evaluating and Opining on Indirect Infringement Requires Claim Construction and a Direct Infringement Analysis Because proof of indirect infringement requires proving direct infringement (or at least the possibility of direct infringement), evaluations and opinions of indirect infringement must contain a direct infringement analysis. This includes construing the claims and comparing them with the potentially infringing product or activities.

D. Inducement to Infringe Under Section 271(b) Requires Proof of Specific Intent Evaluating and opining on inducement to infringe under Section 271(b) requires proof that the inducer had the specific intent to induce infringement

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by another. This includes proving that the inducer intended to cause another to act so as to directly infringe and that the inducer knew or should have known that these actions caused direct infringement. Mere failure to prevent another from directly infringing is not sufficient to show intent for inducement under Section 271(b). However, circumstantial evidence may be relied upon to prove specific intent for inducement under Section 271(b).

E. Active Inducement May Expose the Inducer to Personal Liability That Is Not Covered by Corporate Indemnities or Insurance Because inducement to infringe is a specific intent tort, a corporate officer found to have actively induced infringement under Section 271(b) may have personal liability that cannot be covered by the corporation’s indemnities or directors and officers liability insurance as these generally do not apply to intentional acts by a corporate officer.

F. Contributory Infringement Requires Knowledge of the Patent and the Resulting Infringement, but Intent Need Not Be Shown One may prove liability for contributory infringement by showing that the indirect infringer knew of the patent and the resulting infringement. Proof of specific intent is not required. However, a non-staple article or commodity of commerce suitable for substantial noninfringing use requirement of contributory infringement (discussed below) allows an inference of intentional infringement to contributory infringement.

G. For Contributory Infringement, the Component Cannot Be a Staple Article or Commodity of Commerce Suitable for Substantial Noninfringing Use When evaluating and opining on contributory infringement, it is important to ascertain that the component contributing to the infringement is not a staple article or commodity of commerce suitable for substantial noninfringing use. Supplying such components is not an act of contributory infringement under Section 271(c).

Practice Points

H. There Is a Split in the Federal Circuit as to Whether Infringement Under Section 271(f) Applies to Method Claims Evaluations and opinions regarding infringement of method claims should not rely solely on contributory infringement. There is a split in the Federal Circuit as to whether method claims can be infringed under Section 271(f). Thus, an evaluation or opinion of infringement should not affirmatively state that method claims can be infringed under Section 271(f).

I. “Components” Under Section 271(f) Must Be Tangible Items In order to constitute an infringement under Section 271(f), components must be tangible items physically capable of being assembled into a combination that would infringe if assembled in the United States. Therefore, supplying instructions and the like for how to assemble components abroad in situations where the components are made and assembled abroad is not infringement under Section 271(f).

J. To Infringe Under Section 271(f), Components Must Be Supplied in or from the United States Infringement under Section 271(f) requires that components be supplied in or from the United States. Thus, it is not infringement under Section 271(f) to provide instructions on how to make and/or assemble components abroad. Rather, contributory infringement under Section 271(f) must involve the providing of tangible components in or from the United States for assembly abroad.

K. Products Under Section 271(g) Must Be Physical Products Made Abroad by a Method Patented in the United States; Knowledge Is Not a Product To infringe under Section 271(g), products made abroad must be tangible items that were made by a method that would infringe a U.S. method patent if made in the United States. “Products” under Section 271(g) do not include “knowledge” gained by practicing a U.S.-patented method abroad. Products

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under Section 271(g) also do not include those made using patented methods abroad that only lead to the ability to make products abroad for export to the United States.

L. “Products” Under Section 271(g) Cannot Be “Materially Changed by Subsequent Processes or Become Trivial and Nonessential Components of Another Product” “Products” under Section 271(g) must not be “materially changed by subsequent processes or become trivial and nonessential components of another product.” For example, courts have held that products are “materially changed by subsequent processes” where there are substantial changes in the structure and properties of a product made abroad by a U.S.-patented method as a result of subsequent, unpatented processes prior to importation into the United States.

M. While Infringement Requires That a Single Party Infringe All Claim Limitations, Infringement May Occur Where One Party Infringes Less than All Limitations, but Directs or Controls the Acts of Another to Complete the Infringement Infringement of a U.S. patent requires that a single party perform acts to infringe every claim limitation. However, under joint (or divided) infringement, a party may be liable for infringement where it does not infringe every claim limitation, but where it “controls or directs” the acts of another to complete the infringement. In such a case, the party directing or controlling the acts of another to complete the infringement is liable for infringement by his own infringing acts and for the acts of the other party under the theory of vicarious liability.

N. An “Arm’s Length” Relationship between Parties Is Not Sufficient for Joint Infringement An “arm’s-length” relationship between parties where the parties’ combined acts infringe does not provide sufficient “control or direction” by one party over the acts of the other sufficient to hold the first party vicariously liable for the acts of the other under direct infringement. Thus, there can be no infringement where no single party performs all acts necessary to infringe every claim limitation and another party performs the remaining acts necessary to infringe, but the relationship between the parties is “arm’s-length.”

Practice Points

O. Be Aware of the Section 271(e)(1) “Safe Harbor” Exemption to Infringement Section 271(e)(1) of the U.S. Patent Statute provides an infringement exemption “safe harbor” for the use of patented products that are subject to FDA regulatory review and approval where their use is reasonably related to the development and submission of information to the FDA for regulatory approval.

P. Section 271(e)(1) Does Not Cover “Research Tools” That Themselves Are Not the Subject of FDA Regulatory Approval The “safe harbor” infringement exemption of Section 271(e)(1) is limited to products that require FDA regulatory review and approval prior to marketing in the United States. Therefore, Section 271(e)(1) does not exempt “research tools” from infringement if the tools themselves are not subject to regulatory review and approval by the FDA.

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CHAP T ER

6 Patent Law Principle III: Validity General Principles of Anticipation and Anticipation by Printed Publication

I. General Principles of Anticipation A. Overview of Other Forms of Anticipation and Obviousness

234 235

II. An Anticipation Analysis Requires a Comparison of the Construed Claims with the Prior Art

236

III. The Invention Was Described in a Printed Publication More than One Year Before the Priority Date of a U.S. Patent (35 U.S.C. § 102(b))

237

IV. Definition of “Printed Publication”—Public Accessibility

238

V. Section 102(b) Printed Publication Prior Art Must Be Enabled

244

A. Enablement of Prior Art May Be Evaluated by the Wands Factors

244

B. Enablement for Prior Art Is a Lower Standard than Enablement for Validity Under 35 U.S.C. § 112, Second Paragraph

245

C. When an Issued U.S. Patent Is a Section 102(b) Printed Publication, Prior Art Enablement Is Presumed

248

D. Examples of Federal Circuit Enablement Analyses for Section 102(b) Printed Publication Prior Art

249

VI. In Order to Anticipate, a Single Prior Art Publication Must Disclose, Explicitly or Inherently, Every Claim Limitation

255

A. Inherent Anticipation

256

B. Must Be One Reference

259

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232

Chapter 6 Patent Law Principle III: Validity C. A Reference Only Anticipates Subject Matter as Arranged in the Reference; One Cannot Pick and Choose to Make the Claimed Combination

260

D. An Anticipatory Reference May Disparage the Invention or Teach Away from the Invention

263

VII. Special Rules for Anticipation A. Means-Plus-Function Claims

263 263


264

2. Construing Means-Plus-Function Claims for Determining Anticipation

264

a) Function

265

b) Structure

265

3. Determining Anticipation of Means-Plus-Function Claims B. Product-by-Process Claims

266 266

1. Definition of a Product-by-Process Claim

266

2. Construing Product-by-Process Claims for Determining Anticipation

267

VIII. Practice Points

268

A. Claim Construction Is Always Required

268

B. Printed Publications Are Only Prior Art Under Section 102(b) if Publically Accessible More than One Year Before a Patent’s Effective Priority Date

269

C. Printed Publications Become Prior Art Under Section 102(b) on the Date They First Become Publically Accessible

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D. A U.S. Patent or Patent Application’s Effective Priority Date is the Filing Date of Its Earliest Application to which Priority Is Claimed and That Fully Supports the Claimed Subject Matter

269

E. Public Accessibility for Printed Publications Under Section 102(b) Is Fact-Specific

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F. “Printed Publications” Under Section 102(b) Can Be More than Printed Documents

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G. Printed Publications Under Section 102(b) Must Enable the Subject Matter They Anticipate

270

H. Enablement for Section 102(b) Is Similar to Enablement for Patent Claims Under 35 U.S.C. § 112, First Paragraph, but Is Less Stringent

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Patent Law Principle III: Validity I. Printed Publications Under Section 102(b) May Include Issued U.S. Patents

271

J. Issued U.S. Patents Are Presumed Enabled

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K. A Single Prior Art Reference Must Disclose Every Claim Limitation Either Explicitly or Inherently

271

L. Inherent Anticipation Must Necessarily Occur

271

M. Inherency Does Not Need to Be Recognized in the Art

271

N. To Anticipate, One Printed Publication Must Disclose All Claim Limitations

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O. The Disclosure in the Prior Art Must Exactly Anticipate the Claimed Subject Matter

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P. A Section 102(b) Printed Publication Is Prior Art for What It Discloses, Regardless of Any Comments or Suggestions Against the Claimed Invention

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Q. Issued Patents Are Presumed to Be Valid, and the Party Challenging the Validity of a Patent Bears the Burden of Proof

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R. If a Section 102(b) Printed Publication Was Considered by the Patent Office in the Prosecution History of a Challenged Patent, the Burden of Proving Invalidity Based on That Reference Is Increased

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S. Be Aware that Printed Publications May Contain Evidence of Prior Art Under Other Sections of 35 U.S.C. § 102, Including Evidence That Might Apply Less than One Year Before a Patent or Application’s Effective Priority Date

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T. Be Aware of Special Rules for Means-Plus-Function Claims

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U. Anticipation of Product-by-Process Claims Is Based Solely on the Product, Not the Process

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Chapter 6 Patent Law Principle III: Validity

Usage Note: This chapter covers general principles of invalidity based on anticipation (35 U.S.C. § 102),1 in the context of anticipation by printed publication,2 the most common form of anticipation asserted in U.S. courts and by the U.S. Patent Office. Chapter 7 covers other forms of anticipation, such as prior sale and prior use. Additional chapters that are particularly relevant to this chapter include Chapter 2 (claim construction) and Chapter 8 (obviousness).

I. General Principles of Anticipation The most common form of anticipation asserted in U.S. courts and by the U.S. Patent Office is anticipation by printed publication.3 Accordingly, this chapter discusses general principles of anticipation in the context of anticipation by printed publication. Other forms of anticipation to which these general principles apply, such as prior sale or use, are discussed in Chapter 7. U.S. patents are intended to cover inventions. By common definition an invention is a discovery of “[s]omething devised or produced by original contrivance; a method or means of doing something, an instrument, an art, etc. originated by the ingenuity of some person, and previously unknown; an original contrivance or device.”4 In order to be covered by a U.S. patent an invention must be both novel and nonobvious. As discussed in detail below and in Chapter 7, Section 102 of the U.S. Patent Statute (35 U.S.C. § 102)5 and the jurisprudence of U.S. courts interpreting it define precisely under what conditions an invention is considered to be novel. As discussed in detail in Chapter 8, Section 103 of the U.S. Patent Statute (at 35 U.S.C. § 103)6 and the jurisprudence of U.S. courts interpreting it define precisely under what conditions an invention is considered to be nonobvious. As discussed in detail below, under U.S. patent law the word anticipation7 refers to a specific type of description or event that legally shows that an invention is not novel for purposes of U.S. patenting. Section 102 of the U.S. Patent Statute sets forth a series of specific disclosures and events that constitute anticipation if certain general principles are met. These general principles are discussed in detail in this chapter in the context of anticipation by a printed publication, and are summarized below.

1. 2. 3. 4. 5. 6. 7.

35 U.S.C.S. § 102 (2009). 35 U.S.C.S. § 102(b) (2009). Id. Oxford English Dictionary, 2nd ed., s.v. “Invention.” 35 U.S.C.S. § 102 (2009). 35 U.S.C.S. § 103 (2009). Also included in this definition are variations of the term anticipation, such as anticipate, anticipating, and anticipated.

General Principles of Anticipation

The general principles of anticipation include: (a) “[a]n issued patent enjoys a presumption of validity. Thus, a party challenging patent validity has the burden to prove its case with clear and convincing evidence”;8 (b) invalidity must be determined on a claim-by-claim basis, and a finding that one claim of a patent is invalid has no effect on the other clams;9 (c) determining anticipation requires claim construction, and a comparison of the limitations of the construed claim with the elements of the potentially anticipating disclosure or event;10 (d) to anticipate, a single prior art disclosure (e.g., a printed publication) or event (e.g., a sale) must disclose explicitly or inherently every limitation of a patent claim;11 (e) to anticipate, a single prior art disclosure or event must also disclose every claim limitation “‘arranged as in the claim’”; 12 (f) an anticipatory reference may disparage or teach away from the claimed invention;13 (g) means-plus-function claims are an exception to the general rule that equivalents are not to be considered in determining anticipation;14 and (h) for purposes of determining anticipation, product-by-process claims are construed based only on the product, and not on the process limitations.15

A. Overview of Other Forms of Anticipation and Obviousness In addition to anticipation by printed publication, Section 102 of the U.S. Patent Statute (35 U.S.C. § 102)16 and the jurisprudence of U.S. courts interpreting it

8. E.g., Impax Labs., Inc. v. Aventis Pharms. Inc., 545 F.3d 1312, 1314 (Fed. Cir. 2008); 35 U.S.C.S. § 282 (2009). 9. E.g., Sandt Tech., Ltd. v. Resco Metal & Plastics Corp., 264 F.3d 1344, 1356 (Fed. Cir. 2001) (quoting 35 U.S.C. § 282) (“All claims are ‘presumed valid independently of the validity of the other claims.’”); 35 U.S.C.S. § 282 (2009). 10. E.g., Astra Aktiebolag v. Andrx Pharms., Inc. (In re Omeprazole Patent Litig.), 483 F.3d 1364, 1371 (Fed. Cir. 2007) (“An anticipation analysis requires a comparison of the construed claim to the prior art.”). 11. E.g., Schering Corp. v. Geneva Pharms., Inc., 339 F.3d 1373, 1377 (Fed. Cir. 2003). (“A patent is invalid for anticipation if a single prior art reference discloses each and every limitation of the claimed invention. Moreover, a prior art reference may anticipate without disclosing a feature of the claimed invention if that missing characteristic is necessarily present, or inherent, in the single anticipating reference.”) (citation omitted). 12. E.g., Net Moneyin, Inc. v. Verisign, Inc., 545 F.3d 1359, 1369 (Fed. Cir. 2008) (quoting Connell v. Sears, Roebuck & Co., 722 F.2d 1542, 1548 (Fed. Cir. 1983)). 13. E.g., Bristol-Myers Squibb Co. v. Ben Venue Labs., 246 F.3d 1368, 1378 (Fed. Cir. 2001) (quoting Celeritas Techs. Ltd. v. Rockwell Int’l Corp., 150 F.3d 1354, 1366 (Fed. Cir. 1998)) (“A reference is no less anticipatory if, after disclosing the invention, the reference then disparages it. Thus, the question whether a reference ‘teaches away’ from the invention is inapplicable to an anticipation analysis.”). 14. E.g., Omega Eng’g, Inc. v. Raytek Corp., 334 F.3d 1314, 1322 (Fed. Cir. 2003). 15. E.g., SmithKline Beecham Corp. v. Apotex Corp., 439 F.3d 1312, 1317 (Fed. Cir. 2006). 16. 35 U.S.C.S. § 102 (2009).

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define a number of additional situations in which an invention is deemed to be unpatentable due to anticipation. For example, some provisions of Section 102 (Sections 102(a), 102(e), and 102(g)) bar patentability when an invention was made by another before the invention by the patent applicant.17 Other provisions of Section 102, including the sale and public use bars of Section 102(b), exclude patentability based on certain acts of disclosure occurring at specific times, even if those acts were by the patent applicant. These forms of anticipation are also discussed in detail in Chapter 7. Even when an invention appears to be free from anticipation under Section 102, it may be deemed to be legally unpatentable in the United States under Section 103 of the Patent Statute (35 U.S.C. § 103).18 Under Section 103, an invention is legally unpatentable in the United States if it would have been obvious to one of ordinary skill in the relevant art at the time of the invention, based on prior art defined in Section 102. Chapter 8 discusses unpatentability due to obviousness.

II. An Anticipation Analysis Requires a Comparison of the Construed Claims with the Prior Art In keeping with the primacy of claims and claim construction as emphasized throughout this treatise (and as covered specifically in Chapter 2), claim construction is required for every evaluation or opinion of a U.S. patent or patent application that in any manner involves the patent’s claims. Because anticipation involves a determination of whether a patent’s claims are invalid over the prior art, anticipation analyses necessarily require claim construction. This has clearly been held by the Federal Circuit, that has plainly stated “[a]n anticipation analysis requires a comparison of the construed claim to the prior art.”19 Further, in Helifix, the Federal Circuit explained: An invention is anticipated under 35 U.S.C. § 102(b) if it “was . . . described in a printed publication in this . . . country . . . more than one year prior to the date of application for patent in the United States.” 35 U.S.C. § 102(b). The first step of an anticipation analysis is claim construction. See Key Pharms. v. Hercon Labs. Corp., 161 F.3d 709, 714 (Fed. Cir. 1998). Claim construction is a question of law. . . . See Cybor Corp. v. FAS Techs., Inc., 138 F.3d 1448, 1456 (Fed. Cir. 1998)

17. See Chapter 7 for further information. 18. 35 U.S.C.S. § 103 (2009). 19. Astra Aktiebolag v. Andrx Pharms., Inc. (In re Omeprazole Patent Litig.), 483 F.3d 1364, 1371 (Fed. Cir. 2007); N. Am. Container, Inc. v. Plastipak Packaging, Inc., 415 F.3d 1335, 1344 (Fed. Cir. 2005).

The Invention Was Described in a Printed Publication 237 (en banc). In construing patent claims, we look to the intrinsic evidence of record—the claims, the specification, and, if in evidence, the prosecution history. See Vitronics Corp. v. Conceptronic, Inc., 90 F.3d 1576, 1582–83 (Fed. Cir. 1996). If intrinsic evidence resolves all ambiguities, extrinsic evidence is not considered. See id.20

Thus, the first step in any anticipation analysis is always to construe the patent’s claims.

III. The Invention Was Described in a Printed Publication More than One Year Before the Priority Date of a U.S. Patent (35 U.S.C. § 102(b)) Anticipation by printed publication is based on Section 102(b) of the U.S. Patent Statute (35 U.S.C. § 102(b)), which provides in relevant part: [T]he invention was . . . described in a printed publication in this or a foreign country . . . more than one year prior to the date of the application for patent in the United States.21

The Federal Circuit has reiterated Section 102(b)’s definition of anticipation by printed publication. For example, in Finisar the court stated: “If the claimed invention was ‘described in a printed publication’ . . . more than one year before the U.S. patent application was filed, 35 U.S.C. § 102(b), then that prior art anticipates the patent.”22 The effective filing date of a U.S. patent application for purposes of determining the applicability of a reference under Section 102(b) is the earliest filing date to which the claimed subject matter is entitled.23 This filing date is the one on which the application issued as the patent if the application claims no priority, or, if the application claims priority to earlier-filed applications, it is the filing date of the earliest priority application that fully supports the subject claim.24 Therefore, if priority applications are related to the application that issued as continuation or divisional applications, the priority date for determining Section 102(b) is the earliest filing date of the priority applications.

20. 21. 22. 23.

Helifix, Ltd. v. Blok-Lok, Ltd., 208 F.3d 1339, 1346 (Fed. Cir. 2000). 35 U.S.C. § 102(b) (2009). Finisar Corp. v. DirecTV Group, Inc., 523 F.3d 1323, 1334 (Fed. Cir. 2008). PowerOasis, Inc. v. T-Mobile USA, Inc., 522 F.3d 1299, 1306 (Fed. Cir. 2008); Paperless Accounting, Inc. v. Bay Area Rapid Transit System, 804 F.2d 659, 665 (Fed. Cir. 1986). 24. PowerOasis, 522 F.3d at 1306; Paperless Accounting, 804 F.2d at 665.

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This is necessarily the case because continuation and divisional applications have at least the same subject matter as an application that claims them as priority applications. On the other hand, if the application that issued as the patent is related to one or more priority applications as—or through—one or more continuationin-part applications, the effective filing date is the filing date of the earliest priority application that fully supports the subject matter of the claim, which may or may not be the filing date of a priority application.25 As explained by the Federal Circuit: “It is elementary patent law that a patent application is entitled to the benefit of the filing date of an earlier filed application only if the disclosure of the earlier application provides support for the claims of the later application, as required by 35 U.S.C. § 112.” In re Chu, 66 F.3d 292, 297 (Fed. Cir. 1995); see also Augustine Med., Inc. v. Gaymar Indus., Inc., 181 F.3d 1291, 1302–03 (Fed. Cir. 1999) (“Different claims of [a CIP] application may therefore receive different effective filing dates. . . . Subject matter that arises for the first time in [a] CIP application does not receive the benefit of the filing date of the parent application”).26

IV. Definition of “Printed Publication”— Public Accessibility As stated by the Federal Circuit: The “printed publication” requirement appears in 35 U.S.C. § 102: A person shall be entitled to a patent unless . . . (b) the invention was patented or described in a printed publication in this or a foreign country . . . more than one year prior to the date of the application for patent in the United States.” “Because there are many ways in which a reference may be disseminated to the interested public, ‘public accessibility’ has been called the touchstone in determining whether a reference constitutes a ‘printed publication’ bar under 35 U.S.C. § 102(b).” In re Hall, 781 F.2d 897, 898–99 (Fed. Cir. 1986).27

As explained by the court: A given reference is “publicly accessible” upon a satisfactory showing that such document has been disseminated or otherwise made available to the extent that

25. PowerOasis, 522 F.3d at 1306; Paperless Accounting, 804 F.2d at 665. 26. PowerOasis, 522 F.3d at 1306; Paperless Accounting, 804 F.2d at 665. 27. Kyocera Wireless Corp. v. ITC, 545 F.3d 1340, 1350 (Fed. Cir. 2008) (emphasis added).

Definition of “Printed Publication”—Public Accessibility 239 persons interested and ordinarily skilled in the subject matter or art exercising reasonable diligence, can locate it.28

Furthermore, “[t]he decision whether a particular reference is a printed publication ‘must be approached on a case-by-case basis.’ ”29 In SRI International, the Federal Circuit addressed the way “[t]his court’s case law has discussed public accessibility under § 102(b), in one line of cases illustrating a lack of public accessibility and in another line of cases pointing out public accessibility”: For instance, Application of Bayer and In re Cronyn illustrate situations that do not warrant a finding of public accessibility. In re Wyer, In re Klopfenstein and the recently decided Bruckelmyer v. Ground Heaters, on the other hand, illustrate situations that found public accessibility. From the perspective of cases lacking public accessibility, Bayer featured a graduate thesis in a university library. The library had not catalogued or placed the thesis on the shelves. Only three faculty members even knew about the thesis. Application of Bayer, 568 F.2d 1357, 1358–59 (C.C.P.A. 1978). Under these circumstances, this court’s predecessor found that the thesis did not constitute a printed publication because a customary search would not have rendered the work reasonably accessible even to a person informed of its existence. Id. at 1361–62. Similarly, in In re Cronyn, the thesis document was in a library with an alphabetical index by the author’s name. This court found no public accessibility because “the only research aid in finding the theses was the student’s name, which of course, bears no relationship to the subject of the student’s thesis.” In re Cronyn, 890 F.2d 1158, 1161 (Fed. Cir. 1989). Several cases have also illustrated situations that rendered documents available to the public. For example, in Wyer, an Australian patent application was laid open to the public and “properly classified, indexed or abstracted” to enable public access to the application. In re Wyer, 655 F.2d 221, 226–27 (C.C.P.A. 1981). Wyer explained various factors involved in the public accessibility determination, including intent to publicize and disseminating activities. Still the court emphasized: “Each [printed publication] case must be decided on the basis of its own facts.” Id. at 227. In Klopfenstein, two professional conferences displayed posters. These posters were printed publications because their entire purpose was public communication of the relevant information. In re Klopfenstein, 380 F.3d 1345, 1347–50 (Fed. Cir. 2004). And, most recently, in Bruckelmyer,

28. Bruckelmyer v. Ground Heaters, Inc., 445 F.3d 1374, 1378 (Fed. Cir. 2006). 29. In re Cronyn, 890 F.2d 1158, 1161 (Fed. Cir. 1989) (internal quote from In re Hall, 781 F.2d 897, 899 (Fed. Cir. 1986); In re Wyer, 655 F.2d 221, 227 (C.C.P.A. 1981) (“Decision in this field of statutory construction and application must proceed on a case-by-case basis.”); SRI Int’l, Inc. v. Internet Sec. Sys., 511 F.3d 1186, 1194–1195 (Fed. Cir. 2008).

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Chapter 6 Patent Law Principle III: Validity this court found that a Canadian patent application, properly abstracted, indexed and catalogued, was a printed publication under § 102(b). This court explained: “[T]he [Canadian] patent was classified and indexed, similar to the abstract in Wyer, further providing a roadmap that would have allowed one skilled in the art to locate the [patent] application.” Bruckelmyer v. Ground Heaters, Inc., 445 F.3d 1374, 1379 (Fed. Cir. 2006).30

In SRI, the Federal Circuit addressed the issue of whether a reference that was available on the Internet was a printed publication under Section 102(b) by being publically accessible.31 SRI involved the alleged infringement of several patents relating to cyber security and intrusion detection.32 The accused infringers asserted in part that the patents were invalid because of anticipation by a publication (termed “the Live Traffic paper”) written by the inventors and made available on the Internet more than one year before the effective filing date of the asserted patents.33 The district court granted summary judgment of invalidity based on anticipation by a printed publication under Section 102(b) due to the public availability of the Live Traffic paper on the Internet more than one year before the effective filing dates of the asserted patents.34 On appeal, the Federal Circuit vacated the district court’s summary judgment and remanded the case to the district court “for a more thorough determination of the public[] accessibility of the Live Traffic paper based on the additional evidence and in concert with this opinion.”35 The court described the situation of the Live Traffic paper as follows: The Live Traffic Paper The inventors drafted the Live Traffic paper based on the EMERALD project. Mr. Porras and Mr. Valdes [inventors] authored [the Live Traffic] paper in 1997. . . . SRI filed its patent application on November 9, 1998. . . . The Internet Society (“ISOC”) posted the 1998 SNDSS call for papers on its web site. The call for papers stated that all submissions were to be made via electronic mail by August 1, 1997 with a backup submission sent by postal mail. The call for papers announcement did not include any information on confidentiality of paper submissions. On August 1, 1997, Mr. Porras sent an email to Dr. Bishop, the Program Chair for SNDSS, in response to the SNDSS call for papers. Mr. Porras attached the Live Traffic paper to his email. Mr. Porras stated that SRI would make a copy of the Live Traffic paper available on the SRI FTP

30. 31. 32. 33. 34. 35.

SRI Int’l, 511 F.3d at 1194–1195. Id. at 1186. Id. at 1188. Id. Id. Id. at 1198.

Definition of “Printed Publication”—Public Accessibility 241 server as a backup. He included the specific FTP address, ftp://ftp.csl.sri.com/ pub/emerald/ndss98.ps, in the email. . . . The record reflects seven instances in which Mr. Porras previously directed people to the EMERALD subdirectory to find other papers related to the EMERALD project. In four instances, Mr. Porras provided the full path and filename of the paper. In every instance, Mr. Porras directed the people to a specific paper, which included the term “emerald” in the filename.36

The SRI court’s analysis of whether the Live Traffic paper was prior art as a publication under Section 102(b) is instructive to any determination on this issue. The court indicated: Based on this appeal record, this case falls somewhere between Bayer and Klopfenstein. Like the uncatalogued thesis placed “in” the library in the Bayer case, the Live Traffic paper was placed “on” the FTP server. Yet, the FTP server did not contain an index or catalogue or other tools for customary and meaningful research. Neither the directory structure nor the README file in the PUB subdirectory identifies the location of papers or explains the mnemonic structure for files in the EMERALD subdirectory, or any subdirectory for that matter. In fact, the EMERALD subdirectory does not contain a README file. Further, the summary judgment record shows that only one non-SRI person, Dr. Bishop, specifically knew about the availability of the Live Traffic paper, similar to the knowledge of the thesis’s availability by the three professors in Bayer. The record on summary judgment does not show that an anonymous user skilled in the art in 1997 would have gained access to the FTP server and would have freely navigated through the directory structure to find the Live Traffic paper. To the contrary, the paper’s author, Mr. Porras, thought it necessary to provide Dr. Bishop with the full FTP address for the file. Surely Dr. Bishop, the Program Chair for SNDSS, would have qualified as one of ordinary skill in the art in 1997. Yet, despite his knowledge of the field, FTP servers, and the paper, Dr. Bishop apparently would not have found the reference without Mr. Porras’s precise directions. It is doubtful that anyone outside the review committee looking for papers submitted to the Internet Society’s Symposium would search a subfolder of an SRI FTP server. These are separate entities. It is also doubtful that anyone outside the review committee would have been aware of the paper or looked for it at all in early August 1997. These facts seem to militate against a finding of public accessibility. At least they warrant examination upon remand. In one respect, the public accessibility factors are less compelling for the Live Traffic paper than they were for the thesis in Bayer, In Bayer, the thesis was complete and ready for public consumption, while the Live Traffic paper was still subject to pre-publication review. The Live Traffic paper was not a finished

36. Id. at 1190–91.

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Chapter 6 Patent Law Principle III: Validity thesis, but was posted on the FTP server solely to facilitate peer review in preparation for later publication. On the other hand, similar to the posters in Klopfenstein, the Live Traffic paper was “posted” on an open FTP server and might have been available to anyone with FTP know-how and knowledge of the EMERALD subdirectory. Unlike the posters hung at a conference in Klopfenstein, the Live Traffic paper was not publicized or placed in front of the interested public. In effect, the Live Traffic paper on the FTP server was most closely analogous to placing posters at an unpublicized conference with no attendees. The Live Traffic paper, like posters at a vacant and unpublicized conference, was available by being “posted,” but available only to a person who may have wandered into the conference by happenstance or knew about the conference via unpublicized means. Indeed the record does not show that anyone accessed the Live Traffic paper via the FTP server during the seven days in which it was posted. While actual retrieval of a publication is not a requirement for public accessibility, this record does not evince that the Live Traffic paper was accessible to anyone other than the peerreview committee, thus further suggesting an absence of actual public accessibility. See Constant v. Advanced Micro-Devices, Inc., 848 F.2d 1560, 1569 (Fed. Cir. 1988). The record reflects seven instances in which Mr. Porras previously directed people to the /pub/emerald subdirectory to find other papers related to the EMERALD project. In four instances, Mr. Porras provided the full path and filename of the paper, presumably to provide an adequate research aid for a user to locate the paper. In every instance, Mr. Porras directed the people to a specific paper, which included the term “emerald” in the filename. In this case, there was no such specific direction, and the filename did not mimic the subdirectory or publicized project name. Thus, the record offers no suggestion that because people had been told that they could find other papers in the past in the /pub/ emerald subdirectory, they would—unprompted-look there for an unpublicized paper with a relatively obscure filename. The current record leaves the Live Traffic paper on the Bayer non-accessible side of this principle, not on the Klopfenstein side of public accessibility. Therefore, on summary judgment, this court finds that the pre-publication Live Traffic paper, though on the FTP server, was not catalogued or indexed in a meaningful way and not intended for dissemination to the public. See In re Wyer, 655 F.2d 221 (C.C.P.A. 1981); Application of Bayer, 568 F.2d 1357 (C.C.P.A. 1978); In re Klopfenstein, 380 F.3d 1345, 1347–50 (Fed. Cir. 2004). The FTP server directory structure (/pub/emerald/) of a well-known institution in the intrusion detection community and the acronym of “ndss98.ps” might have hinted at the path to the Live Traffic paper; however, an unpublicized paper with an acronym file name posted on an FTP server resembles a poster at an unpublicized conference without a conference index of the location of the various poster presentations. As noted, the peer-review feature also suggests no intent to publicize. Without additional evidence as to the details of the 1997

Definition of “Printed Publication”—Public Accessibility 243 SRI FTP server accessibility, this court vacates and remands for a more thorough determination of the publicity accessibility of the Live Traffic paper based on additional evidence and in concert with this opinion.37

Another decision that is instructive on determining whether prior art is a printed publication under Section 102(b) is the Federal Circuit’s in Kyocera Wireless,38 in which the court analyzed the issue as follows: The ITC concluded the [alleged Section 102(b) printed publication] GSM standard was not publicly available because it was analogous to the publication in Northern Telecom, Inc. v. Datapoint Corp., 908 F.2d 931 (Fed. Cir. 1990). In Northern Telecom, the documents described a complex military system. The company maintaining the documents housed them in a proprietary library with access restricted to persons authorized by the company. Id. at 936. Under these circumstances, the document was not sufficiently available to the public. Id. at 936–37. In this case, however, the record shows that the GSM reference was not secluded under a similar veil of secrecy. The record shows that GSM specifications, though drafted within smaller technical subcommittees, were widely distributed before the critical date of the ’983 Patent. Versions of the standard were “publicly available and released as consistent sets.” Several U.S. companies took part in the ETSI work and had access to the GSM specifications through their European subsidiaries. The specifications themselves were visible to any member of the interested public without requesting them from an ETSI member. Further, ETSI did not impose restrictions on ETSI members to prevent them from disseminating information about the standard to non-members. The ITC places inordinate emphasis on the record evidence that archival paper copies of the standard are maintained in a limited-access facility. The record does not show, however, that the standard was closed to public access in that manner at the time critical to the invention of the ’983 Patent’s claims. To the contrary, the record details the publication in 1992 of a seven-hundred page technical book entitled “The GSM System for Mobile Communications,” referred to popularly as the “GSM bible.” This “bible” sold more than 25,000 copies with the express purpose of giving wider access to the GSM standard. Indeed, the primary purpose of the GSM standard was to develop a system interoperable across national borders. This purpose made it crucial to grant access to any interested parties. ETSI’s broad membership is a testament to the fruition of this purpose. Thus, the GSM standard documents do not fall in the same confidential category as the Northern Telecom documents, which were not authorized for public release and were maintained under a policy of restricted

37. Id. at 1190–91. 38. Kyocera Wireless Corp. v. ITC, 545 F.3d 1340 (Fed. Cir. 2008).

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Chapter 6 Patent Law Principle III: Validity access. Because the GSM standard was “sufficiently accessible, at least to the public interested in the art,” this court finds insubstantial evidence for the ITC’s conclusion that the GSM standard was not publicly available. See In re Hall, 781 F.2d at 899.39

V. Section 102(b) Printed Publication Prior Art Must Be Enabled Federal Circuit case law is legion that: In order to anticipate a claimed invention, a prior art reference must enable one of ordinary skill in the art to make the invention without undue experimentation. Finisar Corp. v. DirecTV Group, Inc., 523 F.3d 1323, 1336 (Fed. Cir. 2008) (citing In re Omeprazole Patent Litig., 483 F.3d 1364, 1379 (Fed. Cir. 2007)). In other words, the prior art must enable the claimed invention. Minn. Mining & Mfg. Co. v. Chemque, Inc. (3M), 303 F.3d 1294, 1301 (Fed. Cir. 2002).40

A. Enablement of Prior Art May Be Evaluated by the Wands Factors As discussed below, the enablement requirements for prior art are lower than those for a patent’s claims.41 Nonetheless, when determining whether a printed publication under Section 102(b) is enabled, courts have used similar analyses as in determining whether a patent’s claims are enabled.42 As discussed in Chapter 9, the enablement requirement for validity is based on Section 112, first paragraph of the Patent Statute (35 U.S.C. § 112, first paragraph). Under the enablement requirement for validity, a patent’s specification must enable those skilled in the art to make and use the full scope of the claimed invention without undue experimentation.43 In determining whether undue

39. Id. at 1350–51. 40. E.g., Impax Labs., Inc. v. Aventis Pharms. Inc., 545 F.3d 1312, 1314 (Fed. Cir. 2008); Forest Labs., Inc. v. Ivax Pharms., Inc., 501 F.3d 1263, 1268 (Fed. Cir. 2007) (internal quotation marks omitted) (“A reference that is not enabling is not anticipating.”). 41. E.g., SRI Int’l, Inc. v. Internet Sec. Sys., 511 F.3d 1186, 1193–1194 (Fed. Cir. 2008) (“The standard for enablement of a prior art reference for purposes of anticipation under section 102 differs from the enablement standard under 35 U.S.C. § 112. . . . [There is a] “lower enablement standard for prior art under 35 U.S.C. § 102(b) [than for validity under Section 112, first paragraph].”) (internal quotation marks omitted). 42. E.g., id. 43. Chapter 9; Plant Genetic Sys. v. DeKalb Genetics Corp., 315 F.3d 1335, 1339 (Fed. Cir. 2003).

Section 102(b) Printed Publication Prior Art Must Be Enabled 245

experimentation would be needed to make and use the full scope of the invention, courts often look to the so-called Wands factors.44 These factors, so named because they were first put forth in the Federal Circuit case In re Wands, are a series of factual determinations to be weighed in analyzing whether a specification enables a claim.45 The Wands factors include consideration of: (a) the quantity of experimentation necessary; (b) the amount of direction or guidance presented; (c) the presence or absence of working examples; (d) the nature of the invention; (e) the state of the prior art; (f) the relative skill of those in the art; (g) the predictability or unpredictability of the art; and (h) the breadth of the claims.46 In determining whether a prior art reference under Section 102(b) is enabled, courts have used the undue experimentation standard and the Wands factors test. For example, in Impax Laboratories, the Federal Circuit used the standard and considered the Wands factors in determining whether a Section 102(b) reference was enabled: In order to anticipate a claimed invention, a prior art reference must enable one of ordinary skill in the art to make the invention without undue experimentation. Finisar Corp. v. DirecTV Group, Inc., 523 F.3d 1323, 1336 (Fed. Cir. 2008) (citing In re Omeprazole Patent Litig., 483 F.3d 1364, 1379 (Fed. Cir. 2007)). In other words, the prior art must enable the claimed invention. Minn. Mining & Mfg. Co. v. Chemque, Inc. (3M), 303 F.3d 1294, 1301 (Fed. Cir. 2002). The “undue experimentation” component of that equation examines (1) the quantity of experimentation; (2) the amount of direction or guidance present; (3) the presence or absence of working examples; (4) the nature of the invention; (5) the state of the prior art; (6) the relative skill of those in the art; (7) the predictability or unpredictability of the art; and (8) the breadth of the claims. In re Wands, 858 F.2d 731, 737 (Fed. Cir. 1988).47

B. Enablement for Prior Art Is a Lower Standard than Enablement for Validity Under 35 U.S.C. § 112, Second Paragraph While courts may use a similar method to analyze whether a prior art reference under Section 102(b) is enabled, the Federal Circuit has been clear: “The standard for enablement of a prior art reference for purposes of anticipation under section 102 differs from the enablement standard under 35 U.S.C. § 112.”

44. 45. 46. 47.

In re Wands, 858 F.2d 731, 737 (Fed. Cir. 1988). Id. Id. Impax Labs., Inc. v. Aventis Pharms. Inc., 545 F.3d 1312, 1314–15 (Fed. Cir. 2008).

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Chapter 6 Patent Law Principle III: Validity Novo Nordisk Pharm., Inc. v. Bio-Technology Gen. Corp., 424 F.3d 1347, 1355 (Fed. Cir. 2005). “Significantly, [this court has] stated that ‘anticipation does not require actual performance of suggestions in a disclosure. Rather, anticipation only requires that those suggestions be enabled to one of skill in the art.’ ” Id. (internal quote from Bristol-Myers Squibb Co. v. Ben Venue Labs. Inc., 246 F.3d 1368, 1379 (Fed. Cir. 2001)).48

For example, in Schering the Federal Circuit relied on previous Federal Circuit law in reiterating that a prior art reference under Section 102(b) need not create or reduce its subject matter to practice in order to be enabled for anticipation: This court next examines whether Schering’s secret tests of loratadine before the critical date placed DCL in the public domain. Before the critical date, Schering only tested loratadine in secret. Thus, according to Schering, “DCL was not publicly used, or described in any printed publication, until after February 15, 1983, the critical date for the ’716 patent under 35 U.S.C. § 102(b).” Schering thus argues that DCL did not “exist” in the public domain such that DCL could be prior art against the ’716 patent. Anticipation does not require the actual creation or reduction to practice of the prior art subject matter; anticipation requires only an enabling disclosure. In re Donohue, 766 F.2d 531, 533 (Fed. Cir. 1985). Thus, actual administration of loratadine to patients before the critical date of the ’716 patent is irrelevant. The ’233 patent suffices as an anticipatory prior art reference if it discloses in an enabling manner the administration of loratadine to patients. Thus, this court examines whether the ’233 patent contains an enabling disclosure of DCL. A reference may enable one of skill in the art to make and use a compound even if the author or inventor did not actually make or reduce to practice that subject matter. Bristol-Myers, 246 F.3d at 1379; see also In re Donohue, 766 F.2d at 533 (sustaining an anticipation rejection over a reference disclosing a compound and other references disclosing sufficient information to make that compound). Indeed, information arising after the critical date may show that the claimed subject matter, as disclosed in a prior art reference, “was in the public’s possession.” Bristol-Myers, 246 F.3d at 1379 (citing In re Donohue, 766 F.2d at 534). An anticipatory reference need only enable subject matter that falls within the scope of the claims at issue, nothing more. To qualify as an enabled reference, the ’233 patent need not describe how to make DCL in its isolated form. The ’233 patent need only describe how to make DCL in any form encompassed by a compound claim covering DCL, e.g., DCL as a metabolite in a patient’s body.

48. SRI Int’l, 511 F.3d at 1193.

Section 102(b) Printed Publication Prior Art Must Be Enabled 247 The ’233 patent discloses administering loratadine to a patient. A person of ordinary skill in the art could practice the ’233 patent without undue experimentation. The inherent result of administering loratadine to a patient is the formation of DCL. The ’233 patent thus provides an enabling disclosure for making DCL.49

Further, in keeping with this law, the Federal Circuit has held that where a prior art reference under Section 102(b) describes at least as much as the patent it is asserted to anticipate, the reference must enable anticipation of the claims because the patent is presumed to enable the claims under a higher standard of enablement. For example, in SRI the Federal Circuit held: The district court “finds the similarity in disclosure between EMERALD and the specification of the ’212 patent convincing with respect to enablement.” Thus, “if the specification of the ’212 patent was sufficient to enable the claims of that patent, so, too, is the description of EMERALD 1997.” . . . Both the ’212 patent specification and the EMERALD 1997 paper contain similar sections explaining statistical detection. For example, both the specification and the publication contain similar descriptions of the use of NIDES algorithms for statistical detection. Furthermore, the identical figures are a graphical depiction of a network monitor to scrutinize an event stream and a diagram of a resource object that configures the network monitor. These figures show an architecture for network monitoring based on a profile engine and configurable event structures sufficient to enable one skilled in the art. Indeed, these disclosures helped the inventors obtain issuance of the ’212 patent. The issuance itself shows that the specification satisfied the enablement requirements of 35 U.S.C. § 112, P 1. With the 1997 paper providing similar, or even a partially identical, disclosure to the ’212 patent specification, the record meets the lower enablement standard for prior art under 35 U.S.C. § 102(b). Thus, the 1997 publication with its similarities in technical scope and description to the specification of the ’212 patent meets the enabling hurdle for a prior art reference. See Constant v. Advanced Micro-Devices, Inc., 848 F.2d 1560, 1569 (Fed. Cir. 1988) (“The disclosure in Exhibit 5 is at least at the same level of technical detail as the disclosure in the ’491 patent. If disclosure of a computer program is essential for an anticipating reference, then the disclosure in the ’491 patent would fail to satisfy the enablement requirement of 35 U.S.C. § 112, First P”).50

49. Schering Corp. v. Geneva Pharms., Inc., 339 F.3d 1373, 1380–81 (Fed. Cir. 2003) (emphasis added). 50. SRI Int’l, 511 F.3d at 1192–94 (some citations omitted, emphasis added).

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C. When an Issued U.S. Patent Is a Section 102(b) Printed Publication, Prior Art Enablement Is Presumed When a prior art reference is an issued U.S. patent, there is a rebuttable presumption that the patent is enabled prior art. As indicated by the Federal Circuit: As this court explained during the first appeal, when an accused infringer asserts that a prior art patent anticipates specific patent claims, the infringer enjoys a presumption that the anticipating disclosure also enables the claimed invention. However, the patentee may overcome that presumption with persuasive evidence showing that the prior art patent does not enable the claimed invention.51

Importantly, in the context of prior art under Section 102(a), the Federal Circuit has held that when U.S. patents are used as prior art, they are presumed to be enabled for the entire scope of the disclosure of the patent, not just for the claims.52 The Federal Circuit made this holding by explaining that the presumption of enablement of a U.S. patent as prior art is not based on the statutory presumption that U.S. patents are valid (as provided in 35 U.S.C. § 282).53 This is significant because the validity presumption of Section 282 applies only to a patent’s claims and not to any other subject matter that a patent may disclose.54 Thus, if the presumption of enablement of U.S. patents as prior art was based on Section 282, the presumption would only apply to the disclosure of a patent’s claimed subject matter.55 If this were the case, one could only presume enablement of U.S. patents as prior art in the limited circumstance of applying only their claimed subject matter as prior art.56 There would be no presumption of enablement for any other subject matter disclosed in a patent.57 However, in Amgen, the Federal Circuit dismissed this notion and held that the presumption of enablement of U.S. patents as prior art is based on “authority going beyond §282.”58 Therefore, when used as prior art, U.S. patents are presumed enabled for all subject matter they disclose.59 As explained by the Amgen court: The district court concluded that [the prior art patent] was not prior art under 35 U.S.C. § 102(a) because it was not proven to be enabled. . . . United States

51. 52. 53. 54. 55. 56. 57. 58. 59.

Id. at 1316. Amgen Inc. v. Hoechst Marion Roussel, 314 F.3d 1313, 1355 (Fed. Cir. 2003). Id. Id. Id. Id. Id. Id. Id.

Section 102(b) Printed Publication Prior Art Must Be Enabled 249 patents—even those only asserted as prior art in an invalidity defense—are presumed enabled under 35 U.S.C. § 282. We agree that prior art patents are presumed enabled, but under authority going beyond § 282. On appeal, Amgen argues that there should be no presumption of enablement in this case because under § 282 courts only presume the claimed subject matter in a patent is enabled. Thus, Amgen argues, because only the unclaimed disclosures of [the prior art patent] are at issue here, no presumption of enablement should apply. This argument is not relevant, however, because, as reasoned below, we do not only rely on § 282 as the source for a presumption. Instead, relying on our precedent, we hold a presumption arises that both the claimed and unclaimed disclosures in a prior art patent are enabled. In patent prosecution the examiner is entitled to reject application claims as anticipated by a prior art patent without conducting an inquiry into whether or not that patent is enabled or whether or not it is the claimed material (as opposed to the unclaimed disclosures) in that patent that are at issue. The applicant, however, can then overcome that rejection by proving that the relevant disclosures of the prior art patent are not enabled. We hold that an accused infringer should be similarly entitled to have the district court presume the enablement of unclaimed (and claimed) material in a prior art patent defendant asserts against a plaintiff. Thus, a court cannot ignore an asserted prior art patent in evaluating a defense of invalidity for anticipation, just because the accused infringer has not proven it enabled. Like the applicant in ex parte prosecution, however, the patentee may argue that the relevant claimed or unclaimed disclosures of a prior art patent are not enabled and therefore are not pertinent prior art. If a patentee presents evidence of nonenablement that a trial court finds persuasive, the trial court must then exclude that particular prior art patent in any anticipation inquiry, for then the presumption has been overcome.60

D. Examples of Federal Circuit Enablement Analyses for Section 102(b) Printed Publication Prior Art The following sets forth three examples illustrating how the Federal Circuit typically addresses the issue of whether printed publication prior art under Section 102(b) is sufficiently enabled to anticipate the claims of an issued U.S. patent. In Impax Laboratories, the Federal Circuit determined that a reference under Section 102(b) was not enabled, and thus could not anticipate a patent’s claims: In order to anticipate a claimed invention, a prior art reference must enable one of ordinary skill in the art to make the invention without undue experimentation.

60. Id. (footnotes omitted, citations omitted, emphasis added).

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Chapter 6 Patent Law Principle III: Validity In other words, the prior art must enable the claimed invention. The “undue experimentation” component of that equation examines (1) the quantity of experimentation; (2) the amount of direction or guidance present; (3) the presence or absence of working examples; (4) the nature of the invention; (5) the state of the prior art; (6) the relative skill of those in the art; (7) the predictability or unpredictability of the art; and (8) the breadth of the claims. In re Wands, 858 F.2d 731, 737 (Fed. Cir. 1988). Whether a prior art reference is enabling presents a question of law based upon underlying factual findings. This court reviews the ultimate question of enablement without deference while reviewing the underlying factual inquiries for clear error. Under the clear error standard, the district court’s findings will not be overturned in the absence of a definite and firm conviction that a mistake has been made. The first time this case was before the district court, the trial court found that: (1) formula I encompasses a particularly large number of compounds; (2) riluzole was not meaningfully discussed in the treatment of medical conditions associated with the effects of glutamate; (3) the language of the ’940 patent itself created “substantial uncertainty” regarding use of glutamate inhibiting compounds in the treatment of ALS; and (4) the language in the ’940 patent discussing conditions implicating glutamate is speculative, at best. In other words, the district court found that the disclosure of the ’940 patent did not put one of ordinary skill in the possession of the invention. This court remanded for a specific determination on whether the ’940 patent enables a person of ordinary skill in the art to treat ALS with riluzole without regard to the efficacy of such treatment. On remand, the district court made additional factual findings on that specific question. The district court found that excessive experimentation would have been necessary to practice the invention. Specifically the trial court opined that formula I of the alleged prior art discloses hundreds or thousands of compounds and several diseases. Moreover, nothing in the ’940 patent would direct one skilled in the art to recognize that riluzole could be used to treat ALS. The trial court rejected the notion that “the mere mention of riluzole is sufficient to put one skilled in the art in the possession of the claimed invention.” The district court also did not find the dosage information in the disclosure to teach a proper treatment. Instead the trial court noted that “the dosage guidelines are broad and not specific to any of the hundreds of formula I compounds of the claimed invention or to any of the listed diseases.” Moreover, the ’940 patent ties the dosing information to “the compounds of the invention” and specifically excludes riluzole from the invention. Finally, the trial court also noted the absence of working examples. In view of these findings, the district court found that one of ordinary skill in the pharmaceutical arts would have needed extensive experimentation

Section 102(b) Printed Publication Prior Art Must Be Enabled 251 to link riluzole with the treatment of ALS. The district court then reached the ultimate conclusion that the ’940 patent does not enable claims 1–5 of the ’814 patent and thus, it is not anticipatory. This court does not find error, let alone clear error, in the district court’s factual findings. Weighing the Wands factors, the trial court’s findings properly support its conclusion that an ordinarily skilled artisan would have needed to experiment unduly to gain possession of the invention. As shown by the trial court, the ’940 patent’s dosage guidelines are broad and general without sufficient direction or guidance to prescribe a treatment regimen. The alleged prior art also contains no working examples. Finally, nothing in the ’940 patent would have led one of skill in the art to identify riluzole as a treatment for ALS. In sum, each component of the claimed invention—identifying riluzole as a treatment for ALS and devising dosage parameters—would require undue experimentation based on the teachings of the ’940 patent. Because the ’940 patent does not enable a person of ordinary skill in the art to treat ALS with riluzole, it does not anticipate claims 1–5 of the ’814 patent. As this court explained during the first appeal, when an accused infringer asserts that a prior art patent anticipates specific patent claims, the infringer enjoys a presumption that the anticipating disclosure also enables the claimed invention. However, the patentee may overcome that presumption with persuasive evidence showing that the prior art patent does not enable the claimed invention. On appeal, Impax argues that the district court’s silence regarding the initial presumption of enablement to both claimed and unclaimed material is reversible legal error. For this proposition, Impax cites this court’s opinion in Amgen Inc. v. Hoechst Marion Roussel, Inc., 314 F.3d 1313, 1355–56 (Fed. Cir. 2003). To the contrary, in Amgen, the district court placed an affirmative burden of proving the prior art reference’s enablement of the claimed invention on the alleged infringer. This court assigned error to that shifting of the burden. In this case, the district court correctly placed the burden of proving non-enablement on the patentee. The patentee then met that burden with persuasive evidence that the ’940 patent does not enable claims 1–5 of the ’814 patent. The district court did not need to specifically articulate its correct burden-shifting framework. In this case, as the district court found, the record shows sufficient evidence to overcome the presumption of enablement. Because the district court applied the proper enablement standard and correctly determined that the ’940 patent is not an enabling prior art reference and that it does not anticipate claims 1–5 of the ’814 patent, this court affirms.61

61. Impax Labs., Inc. v. Aventis Pharms. Inc., 545 F.3d 1312, 1314–16 (Fed. Cir. 2008) (some citations omitted).

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Further, in Forest Laboratories the Federal Circuit found a lack of enablement of an allegedly anticipatory reference and, therefore, held that the reference did not anticipate the asserted patent’s claims: On appeal, Ivax and Cipla argue that the Smith reference clearly anticipates claim 1 of the ’712 patent because it discusses and analyzes the efficacy of various drug enantiomers and predicts that one citalopram enantiomer will be more potent as a serotonin reuptake inhibitor than the other. Ivax and Cipla further argue that one of ordinary skill in the art would have known at the time of the invention to use diasteriomeric salt formation to resolve citalopram. Specifically, a person of skill in the art would have used the method described in the Wilen reference to resolve the racemic intermediate diol into its enantiomers and the method in the Jacobus reference (Williamson ether synthesis) to convert the diol enantiomer (by cyclizing the ether ring) to (+)-citalopram. Ivax and Cipla add that Dr. Borgeso’s ability to resolve citalopram on his first try after starting with the diol intermediate is further compelling evidence that only routine experimentation was required to separate the enantiomers. In response, Forest argues that the Smith reference does not disclose “substantially pure” (+)-citalopram. Forest also argues that the testimony of the experts and the repeated failures of Dr. Borgeso and others to resolve citalopram into its enantiomers support the district court’s determination that the Smith reference was not enabled for (+)-citalopram. Forest also states that the court was correct to conclude that a person of ordinary skill would have viewed the difficulty in resolving the diol intermediate rather than citalopram itself as significant and a deterrent. In addition, Forest argues that even if a person of skill in the art were to consider using the diol, the Wilen and Jacobus references do not involve compounds with structures similar enough to the citalopram diol intermediate so that a person of ordinary skill would rely upon them to predict the results of a reaction with that compound. More specifically, Forest argues that neither reference discloses a cyclizing reaction involving a compound, like the citalopram diol, that has a resident tertiary amine or a benzylic alcohol. . . . Anticipation is a question of fact that we review for clear error following a bench trial. “Under the clear error standard, the court’s findings will not be overturned in the absence of a definite and firm conviction that a mistake has been made.” “Whether a prior art reference is enabling is a question of law based upon underlying factual findings.” Impax Labs., Inc. v. Aventis Pharm. Inc., 468 F.3d 1366, 1382 (Fed. Cir. 2006) at 1382 (quoting Minn. Mining & Mfg. Co. v. Chemque, Inc., 303 F.3d 1294, 1301 (Fed. Cir. 2002)). We agree with Forest that the district court’s factual findings relating to enablement of the Smith reference are not clearly erroneous, and, based upon those findings, we find no error in the district court’s conclusion that the Smith reference is not enabled with respect to (+)-citalopram. The Smith reference is a pharmacology paper, not a chemical paper. It describes the effects of various enantiomers of particular drugs (not including (+)-citalopram) on the uptake

Section 102(b) Printed Publication Prior Art Must Be Enabled 253 of serotonin in brain tissue and/or platelets. It mentions racemic citalopram (“also of interest”) and shows its structure, but predicts, incorrectly, that the R-enantiomer (the (-)-enantiomer for citalopram, not the one claimed in the ’712 patent) should be far more potent as a serotonin reuptake inhibitor. Because a racemate does encompass its two enantiomers, it in effect does state that there is a (+)-enantiomer of citalopram, but it does not tell how to obtain it. A reference that is not enabling is not anticipating. Elan Pharm., Inc. v. Mayo Found. For Med. Educ. & Research, 346 F.3d 1051, 1054 (Fed. Cir. 2003). The Smith reference, as a pharmacology paper, thus does not enable the preparation of the (+)-enantiomer of citalopram. Ivax and Cipla acknowledge that the Smith reference itself does not teach one of ordinary skill how to make (+)-citalopram, but their arguments that it is enabled by other references are largely a recounting of the testimony favorable to their theory of the case without explanation as to why we should have a definite and firm conviction that mistakes were made by the district court in its fact-finding. In other words, they do not inform us why the district court was not entitled to rely on the evidence favorable to Forest or demonstrate that the evidence favorable to them heavily outweighed the evidence favorable to Forest. Such evidence includes the failures of various scientists to resolve citalopram as recited above. Given Ivax and Cipla’s failure to disturb the detailed and thorough factual findings underlying the district court’s decision, we see no error in the finding that the Smith reference does not enable one of ordinary skill to make (+)-citalopram and hence that the Smith reference does not anticipate claims to (+)-citalopram.62

Finally, in SRI the Federal Circuit examined the enablement of a printed publication under Section 102(b) and determined that the reference was enabling, and therefore that it anticipated the asserted claims: As a matter of law, this court must review the decision that the EMERALD 1997 publication disclosed sufficient information to enable use of this prior art to invalidate the ’212 patent. The trial court determined that the EMERALD 1997 paper anticipated the ’212 patent, rendering the patent invalid under 35 U.S.C. § 102(b). “A [patent] claim is anticipated only if each and every element as set forth in the claim is found, either expressly or inherently described, in a single prior art reference.” “[SRI] does not argue that the EMERALD 1997 paper fails to disclose each of the limitations of the asserted claims of the ’212 patent. Rather, [SRI] asserts that EMERALD 1997 cannot anticipate claim 1 of the ’212 patent because it does not provide an enabling disclosure of the claimed invention.” “The standard for enablement of a prior art reference for purposes of anticipation under section 102 differs from the enablement standard under 35 U.S.C. § 112.” “Significantly,

62. Forest Labs., Inc. v. Ivax Pharms., Inc., 501 F.3d 1263, 1267–69 (some citations omitted).

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Chapter 6 Patent Law Principle III: Validity [this court has] stated that ‘anticipation does not require actual performance of suggestions in a disclosure. Rather, anticipation only requires that those suggestions be enabled to one of skill in the art.’” On summary judgment, the district court found that no reasonable jury could conclude that the EMERALD 1997 paper was a non-enabled “proposal” or an “intent to try” statistical profiling of network traffic. The district court “finds the similarity in disclosure between EMERALD and the specification of the ’212 patent convincing with respect to enablement.” Thus, “if the specification of the ’212 patent was sufficient to enable the claims of that patent, so, too, is the description of EMERALD 1997.” Besides the similarities between the disclosures, the district court accepted SRI’s broad construction of “statistical detection method” to “encompass[] any method of detecting suspicious activity by ‘applying one or more statistical functions’ to analyze network traffic data.” Because SRI asserted that a variety of statistical functions fall within the scope of the ’212 patent, the district court found that a person of ordinary skill in the art would find the EMERALD 1997 paper enabling with respect to the invention. The district court clarified that a person of ordinary skill in this art field would have a background in computer science, electrical engineering, or computer engineering as well as knowledge of cyber and internet security. SRI asserts that the EMERALD 1997 paper is not an enabling disclosure and does not anticipate the claims of the ’212 patent because implementing the EMERALD 1997 concepts required extensive and undue experimentation. In particular, SRI points to the declaration of one of the ’212 inventors, Mr. Porras, that the 1997 paper was completed just at the outset of the EMERALD project. After the 1997 paper, SRI itself engaged in a great deal of time, effort, and research before achieving a workable system. Dr. Kesidis, SRI’s expert, also explained that the EMERALD 1997 paper was a mere statement of intent to try several prior art techniques and would not have enabled one of ordinary skill in the art to make a functional system. The Defendants respond that one of ordinary skill in the art, without undue experimentation, could have combined the teachings in EMERALD 1997 with general knowledge in the art to practice the invention using any species of the statistical detection method. Furthermore, the Defendants contend that substantial evidence from a number of different sources, including references in the ’212 patent, confirmed that statistical detection methods were known in the art and used to analyze network traffic data. In sum, the Defendants contend that a person of ordinary skill in the art was capable of applying a statistical methodology in the analysis of network traffic data before the date of the ’212 claimed invention. This court discerns that the district court correctly determined that the EMERALD 1997 paper enabled one of ordinary skill in the art to practice the claimed invention. Based on the ’212 patent specification, the EMERALD 1997 paper, and the record before the district court, no reasonable jury could conclude that the EMERALD 1997 paper did not enable statistical profiling of network traffic.

In Order to Anticipate, a Single Prior Art Publication Must Disclose 255 Both the ’212 patent specification and the EMERALD 1997 paper contain similar sections explaining statistical detection. For example, both the specification and the publication contain similar descriptions of the use of NIDES algorithms for statistical detection. Furthermore, the identical figures are a graphical depiction of a network monitor to scrutinize an event stream and a diagram of a resource object that configures the network monitor. These figures show an architecture for network monitoring based on a profile engine and configurable event structures sufficient to enable one skilled in the art. Indeed, these disclosures helped the inventors obtain issuance of the ’212 patent. The issuance itself shows that the specification satisfied the enablement requirements of 35 U.S.C. § 112, P 1. With the 1997 paper providing similar, or even a partially identical, disclosure to the ’212 patent specification, the record meets the lower enablement standard for prior art under 35 U.S.C. § 102(b). Thus, the 1997 publication with its similarities in technical scope and description to the specification of the ’212 patent meets the enabling hurdle for a prior art reference. See Constant v. Advanced Micro-Devices, Inc., 848 F.2d 1560, 1569 (Fed. Cir. 1988) (“The disclosure in Exhibit 5 is at least at the same level of technical detail as the disclosure in the ’491 patent. If disclosure of a computer program is essential for an anticipating reference, then the disclosure in the ’491 patent would fail to satisfy the enablement requirement of 35 U.S.C. § 112, First P.”). Dr. Kesidis’s testimony is not sufficient to overcome the weight of evidence that the EMERALD 1997 paper offers an enabling disclosure for § 102(b). His testimony contains only generalized conclusions without any analysis regarding the alleged differences between the ’212 patent disclosure and the EMERALD 1997 paper. In short, Dr. Kesidis just restated SRI’s position. As such, SRI’s only semblance of possible evidence to show a lack of an enabling disclosure in the EMERALD 1997 paper was not sufficient to create a genuine issue of material fact. Therefore, this court affirms the district court’s ruling, as a matter of law, of invalidity of the ’212 patent as anticipated by the EMERALD 1997 paper.63

VI. In Order to Anticipate, a Single Prior Art Publication Must Disclose, Explicitly or Inherently, Every Claim Limitation “A patent is invalid for anticipation if a single prior art reference discloses each and every limitation of the claimed invention.”64 “Moreover, a prior art reference may anticipate without disclosing a feature of the claimed invention if

63. SRI Int’l, Inc. v. Internet Sec. Sys., 511 F.3d 1186, 1192–94 (Fed. Cir. 2008) (some citations omitted, emphasis added). 64. E.g., Schering Corp. v. Geneva Pharms., Inc., 339 F.3d 1373, 1377 (Fed. Cir. 2003).

256 Chapter 6 Patent Law Principle III: Validity

that missing characteristic is necessarily present, or inherent, in the single anticipating reference.”65

A. Inherent Anticipation “Patent law . . . establishes that a prior art reference which expressly or inherently contains each and every limitation of the claimed subject matter anticipates and invalidates.”66 “ ‘A prior art reference anticipates a patent claim if the reference discloses, either expressly or inherently, all of the limitations of the claim.’ ”67 “ ‘A claim is anticipated only if each and every element as set forth in the claim is found, either expressly or inherently described, in a single prior art reference.’ ”68 “Thus, a prior art reference may anticipate when the claim limitation or limitations not expressly found in that reference are nonetheless inherent in it.”69 However, a prior art reference can only “anticipate without disclosing a feature of the claimed invention if that missing characteristic is necessarily present . . . in the single anticipating reference.”70 By “necessarily present” the Federal Circuit means that an inherent element is present each and every time the other explicit elements are found.71 For example, in Schering, the Federal Circuit found that a reference expressly teaching the administration of a drug to a human inherently anticipated a claim to a metabolite of that drug because each and every time the drug was administered to a human, it turned into the claimed metabolite: In the context of accidental anticipation, DCL is not formed accidentally or under unusual conditions when loratadine is ingested. The record shows that DCL necessarily and inevitably forms from loratadine under normal conditions. DCL is a necessary consequence of administering loratadine to patients.72

65. E.g., Schering, 339 F.3d at 1377; Continental Can Co. v. Monsanto Co., 948 F.2d 1264, 1268 (Fed. Cir. 1991). 66. E.g., Schering, 339 F.3d at 1379. 67. E.g., id. (quoting EMI Group N. Am., Inc., v. Cypress Semiconductor Corp., 268 F.3d 1342, 1350 (Fed. Cir. 2001)). 68. E.g., id. (quoting Verdegaal Bros., Inc. v. Union Oil Co. of Cal., 814 F.2d 628, 631 (Fed. Cir. 1987)). 69. E.g., Leggett & Platt, Inc. v. Vutek, Inc., 537 F.3d 1349, 1354 (Fed. Cir. 2008); Mehl/Biophile Int’l Corp. v. Milgraum, 192 F.3d 1362, 1365 (Fed. Cir. 1999). 70. E.g., Schering, 339 F.3d at 1379 (emphasis added); Continental Can, 948 F.2d at 1268. 71. E.g., Schering, 339 F.3d at 1378. 72. Id.

In Order to Anticipate, a Single Prior Art Publication Must Disclose 257

The court further explained: Indeed, Schering’s own expert testified that no human has been found that does not metabolize [the drug] to [the claimed metabolite], and “there is no scientific data in the literature that says that [the claimed metabolite] is not formed from [administering the drug] in humans.” Based on this record, no reasonable jury could find that [the claimed metabolite] is not produced when a human ingests [the claimed metaolite].73

The Federal Circuit has distinguished inherency, which requires that the inherent subject matter be necessarily present, from early Supreme Court cases concerning “accidental [and] unwitting” results that were not necessarily present and, accordingly, were not anticipating: Cases dealing with “accidental, [and] unwitting” [results which] do not show . . . inherency. . . . . See Eibel Process Co. v. Minn. & Ontario Paper Co., 261 U.S. 45, 67 L. Ed. 523, 43 S. Ct. 322, 1923 Dec. Comm’r Pat. 623 (1923); Tilghman v. Proctor, 102 U.S. 707, 26 L. Ed. 279, 1881 Dec. Comm’r Pat. 163 (1880). In contrast to the present case, the record in Eibel and Tilghman did not show that the prior art produced the claimed subject matter. The patent at issue in Tilghman claimed a method of forming free fatty acids and glycerine by heating fats with water at high pressure. In Tilghman, the record did not show conclusively that the claimed process occurred in the prior art. In reviewing the prior art, the Court referred hypothetically to possible disclosure of the claimed process. For example, the Court stated “we do not regard the accidental formation of fat acid in Perkins’s steam cylinder . . . (if the scum which rose on the water issuing from the ejection pipe was fat acid) as of any consequence in this inquiry.” Tilghman, 102 U.S. at 711. In Eibel, the Court found no evidence of the claimed subject matter in the prior art. Eibel, 261 U.S. at 66 (“We find no evidence that any pitch of the wire . . . had brought about such a result . . . and . . . if it had done so under unusual conditions, accidental results, not intended and not appreciated, do not constitute anticipation”).74

Further, inherency does not require recognition in the art at the time of the disclosure. As frequently held by the Federal Circuit: “Inherency is not necessarily coterminous with knowledge of those of ordinary skill in the art. Artisans of ordinary skill may not recognize the inherent characteristics or functioning of the prior art.” In re Cruciferous Sprout Litig., 301 F.3d 1343, 1349 (Fed. Cir. 2002); Schering Corp. v. Geneva Pharms., 339 F.3d 1373,

73. Id. at 1382. 74. Id. at 1378 (emphasis added).

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Chapter 6 Patent Law Principle III: Validity 1377 (Fed. Cir. 2003) (rejecting the contention that inherent anticipation requires recognition in the prior art). . . . The new realization alone does not render that necessary prior art patentable. [T]he discovery of a previously unappreciated property of a prior art composition, or of a scientific explanation for the prior art’s function, does not render the old composition patentably new to the discoverer. Bristol-Myers Squibb Co. v. Ben Venue Labs., Inc., 246 F.3d 1368, 1376 (Fed. Cir. 2001) (explaining that newly discovered results of known processes are not patentable because those results are inherent in the known processes); Verdegaal Bros., Inc. v. Union Oil & Co. of Cal., 814 F.2d 628, 633 (Fed. Cir. 1987) (holding that the recognition of a new aspect of a known process is not a patentable invention of a novel process).75

Further still, inherency may supply a single missing limitation that was not expressly disclosed in the prior art—or can cause anticipation when an entire structure of the claimed subject matter is inherent in the prior art: Because inherency places subject matter in the public domain as well as an express disclosure, the inherent disclosure of the entire claimed subject matter anticipates as well as inherent disclosure of a single feature of the claimed subject matter. The extent of the inherent disclosure does not limit its anticipatory effect. In general, a limitation or the entire invention is inherent and in the public domain if it is the “natural result flowing from” the explicit disclosure of the prior art. See Eli Lilly & Co. v. Barr Labs., Inc., 251 F.3d 955, 970 (Fed. Cir. 2001); see also In re Kratz, 592 F.2d 1169, 1174 (CCPA 1979) (suggesting inherent anticipation of a compound even though the compound’s existence was not known).76

Finally, the Federal Circuit has held: “Under the principles of inherency, if the prior art necessarily functions in accordance with, or includes, the claims limitations, it anticipates.” Perricone v. Medicis Pharm. Corp., 432 F.3d 1368, 1376 (Fed. Cir. 2005) (quoting In re Cruciferous Sprout Litig., 301 F.3d 1343, 1349 (Fed. Cir. 2002)).77

75. Astra Aktiebolag v. Andrx Pharms., Inc. (In re Omeprazole Patent Litig.), 483 F.3d 1364, 1373 (Fed. Cir. 2007) (some quotation marks and citations omitted, emphasis added). 76. Schering, 339 F.3d at 1379 (emphasis added). 77. Leggett & Platt, Inc. v. VUTEk, Inc., 537 F.3d 1349, 1354 (Fed. Cir. 2008).

In Order to Anticipate, a Single Prior Art Publication Must Disclose 259

B. Must Be One Reference A printed publication under Section 102(b) must be one single reference: As we have stated numerous times . . . , in order to demonstrate anticipation, the proponent must show “that the four corners of a single, prior art document describe every element of the claimed invention.” Xerox, 458 F.3d at 1322 (quoting Advanced Display Sys., Inc. v. Kent State Univ., 212 F.3d 1272, 1282 (Fed. Cir. 2000)). This statement embodies the requirement in section 102 that the anticipating invention be “described in a printed publication,” and is, of course, unimpeachable.78

In Kyocera Wireless the Federal Circuit succinctly addressed this precedent in holding that a collection of related references could not be combined to form a single prior art reference as a printed publication under Section 102(b): This court next turns to Qualcomm’s contention that the ITC incorrectly found that Qualcomm’s proffered collection of eleven separate GSM specifications does not anticipate the asserted ’983 Patent claims because the specifications do not together constitute a single reference for § 102 purposes. Qualcomm argues the different GSM specifications are like chapters of a book and function as a single, coherent reference that is simply too voluminous to bind into one volume. This court requires that in order to anticipate a claim, “a single prior art reference must expressly or inherently disclose each claim limitation.” Finisar Corp. v. DirecTV Group, Inc., 523 F.3d 1323, 1334 (Fed. Cir. 2008). The record evidence suggests that the GSM standard is not a single reference. The different specifications that comprise the GSM standard were authored by different subsets of authors at different times. Indeed, the GSM standard includes hundreds of individual specifications drafted by approximately ten different subgroups, each with its own title and separate page numbering. Each specification, though part of the greater GSM standard, stands as a separate document in its own right. Even Qualcomm’s witness—admittedly one of the most knowledgeable people in the world about the operation of GSM—testified that she had not read the entire standard and did not know of any person who had read the entire standard. Under these circumstances, the GSM standard is actually several prior art references with separate dates of creation, rather than a single prior art reference. Qualcomm asserts that each GSM specification incorporates the others by reference. Even if true, this fact does not qualify the GSM standard as a single reference. This court has been clear that in order for one document to

78. Net Moneyin, Inc. v. Verisign, Inc., 545 F.3d 1359, 1369 (Fed. Cir. 2008).

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Chapter 6 Patent Law Principle III: Validity incorporate another document by reference, the incorporating document must identify the incorporated document with detailed particularity, clearly indicating the specific material for incorporation. See Advanced Display Sys., Inc. v. Kent State Univ., 212 F.3d 1272, 1282 (Fed. Cir. 2000). At most, each relevant GSM specification identifies itself as a part of the greater GSM standard; specifications at times cross-reference other specifications. This vague referencing practice is hardly sufficient to meet this court’s legal requirements for incorporation. In sum, the GSM standard is simply not a coherent whole document that can be assigned a single prior art date of creation. For this reason . . . this court affirms the ITC’s determination that the GSM standard is not available for use as a single anticipating reference under § 102.79

C. A Reference Only Anticipates Subject Matter as Arranged in the Reference; One Cannot Pick and Choose to Make the Claimed Combination “[T]he hallmark of anticipation is prior invention, the prior art reference—in order to anticipate under 35 U.S.C. § 102—must not only disclose all elements of the claim within the four corners of the document, but must also disclose those elements ‘arranged as in the claim.”’80 As explained by the Federal Circuit: The meaning of the expression “arranged as in the claim” is readily understood in relation to claims drawn to things such as ingredients mixed in some claimed order. In such instances, a reference that discloses all of the claimed ingredients, but not in the order claimed, would not anticipate, because the reference would be missing any disclosure of the limitations of the claimed invention “arranged as in the claim.” But the “arranged as in the claim” requirement is not limited to such a narrow set of “order of limitations” claims. Rather, our precedent informs that the “arranged as in the claim” requirement applies to all claims and refers to the need for an anticipatory reference to show all of the limitations of the claims arranged or combined in the same way as recited in the claims, not merely in a particular order. The test is thus more accurately understood to mean “arranged or combined in the same way as in the claim.” For example, in Lindemann Maschinenfabrik GmbH v. American Hoist & Derrick Co., 730 F.2d 1452 (Fed. Cir. 1984), we reviewed a district court’s determination that a patent directed to a hydraulic scrap shearing machine was anticipated by a prior patent directed to a method for shearing spent nuclear

79. Kyocera Wireless Corp. v. ITC, 545 F.3d 1340, 1351–52 (Fed. Cir. 2008) (some citations omitted). 80. Net Moneyin, 545 F.3d at 1369 (quoting Connell v. Sears, Roebuck & Co., 722 F.2d 1542, 1548 (Fed. Cir. 1983)).

In Order to Anticipate, a Single Prior Art Publication Must Disclose 261 fuel bundles. Because the district court had “treated the claims as mere catalogs of separate parts, in disregard of the part-to-part relationships set forth in the claims and that give the claims their meaning,” we reversed. Id. at 1459. Although the prior art reference could be said to contain all of the elements of the claimed invention, it did not anticipate under 35 U.S.C. § 102 because it “disclose[d] an entirely different device, composed of parts distinct from those of the claimed invention, and operating in a different way to process different material differently.” Id. at 1458. The reference thus was deficient because it did not disclose the elements of the claimed invention “arranged as in the claim” as required by 35 U.S.C. §102. Id. In Ecolochem, Inc. v. Southern California Edison Co., 227 F.3d 1361 (Fed. Cir. 2000), we reviewed a district court’s decision that a prior art reference directed to “Saving Energy by Catalytic Reduction of Oxygen in Feedwater” anticipated a claim reciting the use of hydrazine with a mixed resin bed to deoxygenate water. In finding that the reference anticipated the claim, the district court considered a figure and accompanying text, which taught the use of hydrogen with a mixed bed to deoxygenate water, in conjunction with a separate passage discussing deoxygenating water with, among other things, hydrazine. Id. at 1369. We reversed. After determining that the relevant figure and accompanying text described only the use of hydrogen to deoxygenate water, we concluded that the reference could not anticipate the claimed invention because there was no link between that figure and the general discussion of hydrazine as a deoxygenating agent. Id. In other words, we concluded that although the reference taught all elements of the claim, it did not contain a discussion suggesting or linking hydrazine with the mixed bed in the figure, and thus did not show the invention arranged as in the claim. Recently, in Finisar Corp. v. DirecTV Group, Inc., 523 F.3d 1323 (Fed. Cir. 2008), we reversed a district court’s denial of a motion for judgment as a matter of law because the jury could not have reasonably concluded that the prior art reference relating to the Videotex architecture did not anticipate the claimed invention directed to systems and methods for scheduling transmission of database tiers on demand at varying repetition rates. Although the anticipation issue dealt largely with the interpretation of the prior art reference, id. at 1335–37, we reemphasized the importance of the requirement that the reference describe not only the elements of the claimed invention, but also that it describe those elements “arranged as in the claim”: To anticipate a claim, a single prior art reference must expressly or inherently disclose each claim limitation. . . . But disclosure of each element is not quite enough—this court has long held that “[a]nticipation requires the presence in a single prior art disclosure of all elements of a claimed invention arranged as in the claim.” Id. at 1334 (quoting Connell, 722 F.2d at 1548). In all of these cases, the prior art reference had to show the claimed invention arranged or combined in the

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Chapter 6 Patent Law Principle III: Validity same way as recited in the claim in order to anticipate. We thus hold that unless a reference discloses within the four corners of the document not only all of the limitations claimed but also all of the limitations arranged or combined in the same way as recited in the claim, it cannot be said to prove prior invention of the thing claimed and, thus, cannot anticipate under 35 U.S.C. § 102.81

In applying the law to the facts, the Verisign court held: Here, the iKP reference discloses two separate protocols for processing an Internet credit card transaction. Neither of these protocols contains all five links arranged or combined in the same way as claimed in the ’737 patent. Thus, although the iKP reference might anticipate a claim directed to either of the two protocols disclosed, it cannot anticipate the system of claim 23. The district court was wrong to conclude otherwise. The district court was also wrong to combine parts of the separate protocols shown in the iKP reference in concluding that claim 23 was anticipated. Granted, there may be only slight differences between the protocols disclosed in the iKP reference and the system of claim 23. But differences between the prior art reference and a claimed invention, however slight, invoke the question of obviousness, not anticipation. See 35 U.S.C. § 103(a) (“A patent may not be obtained though the invention is not identically disclosed or described as set forth in section 102 of this title, if the differences between the subject matter sought to be patented and the prior art are such that the subject matter as a whole would have been obvious at the time the invention was made to a person having ordinary skill in the art to which said subject matter pertains.” (emphasis added)); see also In re Arkley, 455 F.2d 586, 587, 59 C.C.P.A. 804 (CCPA 1972) (“[R]ejections under 35 U.S.C. § 102 are proper only when the claimed subject matter is identically disclosed or described in the prior art.” (emphasis and internal quotation marks omitted)). Thus, it is not enough that the prior art reference discloses part of the claimed invention, which an ordinary artisan might supplement to make the whole, or that it includes multiple, distinct teachings that the artisan might somehow combine to achieve the claimed invention. See Arkley, 455 F.2d at 587 (“[T]he [prior art] reference must clearly and unequivocally disclose the claimed [invention] or direct those skilled in the art to the [invention] without any need for picking, choosing, and combining various disclosures not directly related to each other by the teachings of the cited reference”).82

81. Id. at 1370–71 (emphasis in original and added). 82. Id. at 1371 (emphasis added).

Special Rules for Anticipation

D. An Anticipatory Reference May Disparage the Invention or Teach Away from the Invention As discussed in Chapter 8 (obviousness), when prior art references disparage a claimed invention or otherwise teach away from making a claimed invention, this can be evidence against a holding that the claimed invention was obvious over that prior art. However, for anticipation, all that matters is what the reference shows. It makes no difference if a prior art reference disparages the claimed invention or otherwise teaches away. As explained by the Federal Circuit: “A reference is no less anticipatory if, after disclosing the invention, the reference then disparages it. Thus, the question whether a reference ‘teaches away’ from the invention is inapplicable to an anticipation analysis.” Celeritas Techs. Ltd. v. Rockwell Int’l Corp., 150 F.3d 1354, 1366 (Fed. Cir. 1998).83

VII. Special Rules for Anticipation As explained below, similar to the situation with infringement, anticipation of means-plus-function and product-by-process claims have special rules that must be considered when evaluating potential anticipation of these claims.

A. Means-Plus-Function Claims Means-plus-function claim terms present an interesting—and unique— exception to the general rules regarding anticipation. These statutorily defined84 claims that are perhaps the only exception85 to the general rule that “equivalents” are not considered in claim construction and anticipation;

83. Bristol-Myers Squibb Co. v. Ben Venue Labs., 246 F.3d 1368, 1378 (Fed. Cir. 2001). 84. 35 U.S.C.S. § 112, P 6 (2009). 85. Although there is one rather unusual Federal Circuit case, Cohesive Techs., in which the Federal Circuit construes the literal scope of a claim to “about 30 μm” to include “functional equivalents” within the literal construction of the claim for literal infringement. The Court then held that the patentees were not entitled to the doctrine of equivalents because: “The ‘about 30 μm’ limitation already literally encompasses diameters that are equivalent to 30 μm in the context of the patent, any particle diameter that performs the same function, in the same way, with the same result as a 30 μm diameter is already within the literal scope of the claim.” Cohesive Techs v. Waters Corp., 543 F.3d 1351, 1372 (Fed. Cir. 2008). However, other than means-plus-function claims, this appears to be the only Federal Circuit case to construe the literal scope of claims to include functional equivalents.

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instead, as discussed above, anticipation compares only the construed claims with the prior art. “Equivalents” of claimed subject matter are generally only considered in any manner when determining infringement under the doctrine of equivalents. However, as discussed below, for means-plus-function claims, claim construction includes “equivalents,” and anticipation determinations compare the disclosure of the prior art against the construed claims, which include equivalents. Thus, as discussed below, prior art that does not disclose an exact structure as shown and claimed in a patent may nonetheless anticipate a means-plus-function claim if the art discloses an “equivalent” of the exact structure shown and claimed in a patent. 1. Definition of a Means-Plus-Function Claim Means-plus-function claims86 are claims that do not expressly recite a specific structure or material for accomplishing a specified function. Rather, they are typically written as claiming “a means for” accomplishing a specified function. A typical means-plus-function claim is shown below: Claim 11. A saw for cutting concrete . . . comprising: . . . means connected to the saw for supporting the surface of the concrete adjacent the leading edge of the cutting blade to inhibit chipping, spalling, or cracking of the concrete surface during cutting. . . .87

2. Construing Means-Plus-Function Claims for Determining Anticipation The construction of a means-plus-function claim limitation proceeds according to 35 U.S.C. Section 112, Paragraph 6, which has codified these claims. It states: An element in a claim for a combination may be expressed as a means or step for performing a specified function without the recitation of structure, material, or acts in support thereof, and such claim shall be construed to cover the corresponding structure, material, or acts described in the specification and equivalents thereof.88

86. There are also step-plus-function claims, which are construed in the same was as meansplus-function claims, except that instead of the specification providing “means for” accomplishing a specified function, the specification provides “acts for” accomplishing a specified function. 87. Chiuminatta Concrete Concepts, Inc. v. Cardinal Indus. Inc., 145 F.3d 1303, 1305–06 (Fed. Cir. 1998) (emphasis added). 88. 35 U.S.C.S. § 112, P 6 (2009) (emphasis added); In re Donaldson Co., 16 F.3d at 1189, 1193–94 (Fed. Cir. 1994) (en banc).



a) Function The function of a means-plus-function claim is construed in the same manner that any claim term is construed.90 b) Structure It is in the construction of the “structure” portion of a means-plus-function claim where an anticipation analysis differs significantly from that of other claims. This is because claim construction for the “structure” of a means-plusfunction claim must include “equivalents” under Section 112, Paragraph 6.91 This is virtually the only time that an anticipation evaluation is performed wherein potentially invalidating prior art or events are compared against construed claims in which the construction includes “equivalents.” As explained by the Federal Circuit: The disclosed and prior art structures are not identical, but the claim may nonetheless be anticipated. While a “means-plus-function” limitation may appear to include all means capable of achieving the desired function, the statute requires that it be “construed to cover the corresponding structure, material, or acts described in the specification and equivalents thereof.” 35 U.S.C. § 112, para. 6 (emphasis added).92

As discussed in detail in Chapter 2, in accordance with Section 112, Paragraph 6, construction of the structure aspect of a means-plus-function claim includes identifying: (a) the exact structures in the specification that are clearly linked or associated with the claimed function; and (b) “equivalents thereof ” as determined by equivalency under Section 112, Paragraph 6.93 As explained in Chapter 2 (claim construction) as well as in Chapters 3 and 4

89. 90. 91. 92. 93.

Omega Eng’g, Inc. v. Raytek Corp., 334 F.3d 1314, 1322 (Fed. Cir. 2003) (citations omitted). E.g., id. at 1322; Donaldson, 16 F.3d at 1193–94. E.g., Omega Eng’g, 334 F.3d at 1322; Donaldson, 16 F.3d at 1193–94. In re Bond, 910 F.2d 831, 833 (Fed. Cir. 1990) (emphasis in original, emphasis added). E.g., Omega Eng’g, 334 F.3d at 1322; Donaldson, 16 F.3d at 1193–94; Bond, 910 F.2d at 833.

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(literal infringement and infringement under the doctrine of equivalents of means-plus-function claims), determining equivalency under Section 112, Paragraph 6 is similar but not identical to an equivalence analysis under the doctrine of equivalents.94 An equivalence analysis under Section 112, Paragraph 6 takes into consideration whether there is an “insubstantial” difference from the structures explicitly shown in the specification and a potentially equivalent structure.95 3. Determining Anticipation of Means-Plus-Function Claims Anticipation of any claim requires that an anticipating art or event disclose, identically, every limitation of a claim. Means-plus-function claims are no different in this regard. However, they do differ in that the proper construction of a means-plus-function includes the claimed function and the associated structures, both as explicitly disclosed in the specification, and “equivalents thereof ” under Section 112, Paragraph 6.96 Therefore, a proper anticipation analysis of a means-plus-function claim compares the properly construed claim, including the structures explicitly disclosed in the specification and equivalents thereof under Section 112, Paragraph 6, with the prior art. In order to anticipate a means-plus-function claim limitation, the prior art must literally disclose the claimed function and at least one of the structures as literally disclosed in the specification or equivalents thereof under Section 112, Paragraph 6.97 Thus, anticipation of means-plus-function claims represents perhaps the only time in U.S. patent law that a claim can be anticipated by prior art that does not disclose the exact structure claimed, but instead discloses an “equivalent,” provided the structure disclosed in the prior art is identical to an equivalent structure as determined under Section 112, Paragraph 6.

B. Product-by-Process Claims 1. Definition of a Product-by-Process Claim A product-by-process claim is “one in which the product is defined at least in part in terms of the method or process by which it is made.”98 While the patent

94. Welker Bearing Co. v. PHD, Inc., 550 F.3d 1090, 1099–1100 (Fed. Cir. 2008); Chiuminatta, 145 F.3d at 1310–11. 95. E.g., Interactive Pictures Corp. v. Infinite Pictures, Inc., 274 F.3d 1371, 1383 (Fed. Cir. 2001); Ishida Co., Ltd. v. Taylor, 221 F.3d 1310, 1317 (Fed. Cir. 2000); Odetics, Inc. v. Storage Tech. Corp., 185 F.3d 1259, 1267 (Fed. Cir. 1999); Chiuminatta, 145 F.3d at 1303. 96. E.g., Donaldson, 16 F.3d at 1193–94; Bond, 910 F.2d at 831, 833. 97. E.g., Donaldson, 16 F.3d at 1193–94; Bond, 910 F.2d at 831, 833. 98. Bonito Boats, Inc. v. Thunder Craft Boats, Inc., 489 U.S. 141, 158–59 (1989); SmithKline Beecham Corp. v. Apotex Corp., 439 F.3d 1312, 1315 (Fed. Cir. 2006).


statute does not provide for product-by-process claims, the courts have long recognized the appropriateness of such claims.99 The original purpose of product-by-process claims was to allow inventors to claim “an otherwise patentable product that resists definition by other than the process by which it is made.”100 Thus, the original intention behind product-by-process claims was to prevent an inventor from being foreclosed from the benefits of the patent system simply because her or his product was difficult to describe in words, or its structure was insufficiently understood.101 “Today, however, productby-process claims are used by inventors even if the invention could have been described independent of the process.”102 2. Construing Product-by-Process Claims for Determining Anticipation For purposes of determining anticipation, product-by-process claims are construed based only on the product, and not on the process limitations. As explained by the Federal Circuit in SmithKline Beecham v. Apotex: Regardless of how broadly or narrowly one construes a product-by-process claim, it is clear that such claims are always to a product, not a process. It has long been established that one cannot avoid anticipation by an earlier product disclosure by claiming the same product more narrowly, that is, by claiming the product as produced by a particular process. This was the exact issue in In re Thorpe. There, the patent concerned a composition that was used in carbonless copy paper systems. 777 F.2d at 696. The composition was know n in the prior art, but was previously made using zinc dibenzoate. In a product-by-process claim, Thorpe claimed the same composition made by a process that used zinc oxide and benzoic acid, rather than zinc dibenzoate. The court upheld the PTO’s rejection of the claim. Id. at 698. It held that “if the product in a productby-process claim is the same as or obvious from a product of the prior art, the claim is unpatentable even though the prior product was made by a different process.”

99. 100. 101. 102.

E.g., In re Thorpe, 777 F.2d 695, 697 (Fed. Cir. 1985). Id. SmithKline, 439 F.3d at 1315. Id.; but cf. SmithKline Beecham Corp. v. Apotex Corp., 453 F.3d 1346, 1317 (Fed. Cir. 2006) (reh’g denied, reh’g en banc denied), 453 F.3d 1347 (dissenting opinions) (arguing that there should be two different types of product-by-process claims, one type for known products where the product does not need to be novel but the process limitations of the claim serve as limitations in determining infringement, and another type for products that cannot be claimed without reference to the process by which the product is made, and for which the process limitations do not serve as limitations in determining infringement); See 970 F.2d 834, rehearing en banc denied, 974 F.2d 1299 (concurring opinion), 974 F.2d 1279 (dissenting opinions) (same); Abbott Labs. v. Sandoz, Inc., 2009 U.S. App. LEXIS 10476, *106–7 (Fed. Cir. 2009) (Newman, dissenting) (same); Abbott, 2009 U.S. App. LEXIS 10476, *107–10 (Lourie, dissenting) (same).

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Chapter 6 Patent Law Principle III: Validity Id. at 697. In re Thorpe has never been overruled and has been followed for many years by the PTO. The current [Manual of Patent Examining Procedure] states: “[Even] though product-by-process claims are limited by and defined by the process, determination of patentability is based on the product itself. The patentability of a product does not depend on its method of production. If the product in the product-by-process claim is the same as or obvious from a product of the prior art, the claim is unpatentable even though the prior product was made by a different process.” MPEP § 2113 (8th ed., Rev. 2, May 2004) (quoting In re Thorpe, 777 F.2d at 698).103

As discussed in Chapter 2, Section [V][G][2],104 product-by-process claims are construed differently for infringement and for anticipation. When construing product-by-process claims for infringement (both literal and under the doctrine of equivalents),105 the process steps in the claims serve as limitations.106 Therefore, a product-by-process claim is infringed only by a product that is made by a process that is the same as, or equivalent to, the process limitations in the claim.107 This applies to all product-by-process claims, regardless of whether the product could be claimed without reference to the process by which it is made.108 Product-by-process claims may be the only U.S. patent claims that are construed differently for infringement and for validity.109

VIII. Practice Points A. Claim Construction Is Always Required As reiterated throughout this book, claim construction is required whenever evaluating or opining on any matter related to a patent’s claims. This includes when determining claim validity based on printed publications as prior art under Section 102(b). The process of determining claim validity involves first

103. Id. 104. Discussing claim construction for product-by-process claims. 105. See Chapter 3, Section V[B] (discussing literal infringement of product-by-process claims) and Chapter 4, Section III[F] (discussing infringement of product-by-process claims under the doctrine of equivalents). 106. Abbott Labs. v. Sandoz, Inc., 2009 U.S. App. LEXIS 10476, *26–27 (Fed. Cir. 2009) (en banc in relevant part). 107. Id. at *28. 108. Id. at *31–32. 109. Id. at *100 (Newman, dissenting) (“For the first time, claims [product-by-process claims] are construed differently for validity and for infringement.”).

Practice Points

objectively construing a patent’s claims independent of the prior art, then applying the teaching of the prior art to the construed claims.

B. Printed Publications Are Only Prior Art Under Section 102(b) if Publically Accessible More than One Year Before a Patent’s Effective Priority Date Section 102(b) printed publications are prior art to U.S. patents or patent applications if publically accessible more than one year before a patent or patent application’s effective priority date. Thus, printed publications made publically accessible less than one year before the effective priority date of a U.S. patent or patent application are not prior art under Section 102(b).

C. Printed Publications Become Prior Art Under Section 102(b) on the Date They First Become Publically Accessible The date that a printed publication first becomes publically accessible is its effective date for determining its applicability as prior art under Section 102(b). Thus, a printed publication is prior art to a U.S. patent or patent application if publically accessible more than one year before a patent or patent application’s effective priority date.

D. A U.S. Patent or Patent Application’s Effective Priority Date is the Filing Date of Its Earliest Application to which Priority Is Claimed and That Fully Supports the Claimed Subject Matter For determining the applicable date of a printed publication under Section 102(b), the effective priority date of a U.S. patent is the filing date of the application from which the patent issued, or the earliest filing date of any claimed priority application that fully supports the claimed subject matter. Thus, for patents that claim no priority applications, the effective date is the filing date of the application for the patent. For patents that claim priority to earlier applications, the effective priority date is the earliest filing date of an application that fully supports the claimed subject matter. Thus, for patents that claim priority to earlier continuation or divisional applications, their effective priority date is the earliest filing date of the priority continuation or divisional priority applications. For patents that claim priority to or through continuation-in-part applications, the effective priority date is the earliest filing date of a priority application that fully supports the

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claimed subject matter. Accordingly, for applications claiming priority to or through continuation-in-part applications, the subject matter of the priority applications must be examined and compared with the claims at issue in order to determine the priority date for each claim of a patent for purposes of determining the relevant date for Section 102(b) printed publications.

E. Public Accessibility for Printed Publications Under Section 102(b) Is Fact-Specific Determining whether a document is a printed publication under Section 102(b) by being publically accessible (and thus also determining its effective date as a prior art reference) involves a fact-specific inquiry. Factors to consider regarding public accessibility include whether—and how easily— a member of the public may access a reference.

F. “Printed Publications” Under Section 102(b) Can Be More than Printed Documents While most Section 102(b) printed publications are published documents, Section 102(b) printed publications are not limited to published documents. The Federal Circuit has held that disclosures such as posters, slide shows, and Internet postings may be printed publications under Section 102(b) depending on whether they are publically accessible.

G. Printed Publications Under Section 102(b) Must Enable the Subject Matter They Anticipate A printed publication under Section 102(b) must be enabled for the subject matter it anticipates. Accordingly, a printed publication cannot anticipate subject matter that it does not enable.

H. Enablement for Section 102(b) Is Similar to Enablement for Patent Claims Under 35 U.S.C. § 112, First Paragraph, but Is Less Stringent The evaluation of whether printed publications under Section 102(b) enable subject matter that they potentially anticipate may be conducted using analyses similar to those used to determine whether a patent’s specification

Practice Points

enables its claims under Section 112, second paragraph, as discussed in Chapter 9. This includes use of the so-called Wands factors. However, the standard for enablement of printed publications under Section 102(b) is less stringent than that for enablement of patent claims under Section 112, first paragraph.

I. Printed Publications Under Section 102(b) May Include Issued U.S. Patents Issued U.S. patents can be printed publications under Section 102(b).

J. Issued U.S. Patents Are Presumed Enabled There is a rebuttable presumption that when a printed publication under Section 102(b) is an issued U.S. patent, it constitutes enabled prior art for all it discloses. The presumption of enablement is not limited only to a patent’s claims.

K. A Single Prior Art Reference Must Disclose Every Claim Limitation Either Explicitly or Inherently In order to anticipate a claim, a printed publication under Section 102(b) must disclose every claim limitation either explicitly or inherently.

L. Inherent Anticipation Must Necessarily Occur In order for a printed publication under Section 102(b) to anticipate inherently, the inherent subject matter must necessarily be present from the explicitly described subject matter. For example, if a purported inherent disclosure of a Section 102(b) printed publication is the result of a process that is explicitly taught, the inherent result must necessarily occur every time the explicitly taught process is performed.

M. Inherency Does Not Need to Be Recognized in the Art It is not necessary that those skilled in the art recognize the inherent subject matter of a Section 102(b) reference at any given time. For example, the inherent

271


elements of a Section 102(b) printed publication could have been unknown at the relevant date of anticipation. All that is necessary is that the inherent subject matter was necessarily present.

N. To Anticipate, One Printed Publication Must Disclose All Claim Limitations A single printed publication must disclose every claim limitation, explicitly or inherently, in order to anticipate a claim. If even one limitation of a claim is not disclosed, there can be no anticipation. In such an event, one should evaluate whether the reference may affect the validity of the claim under obviousness (as discussed in Chapter 8). Further, a printed publication under Section 102(b) must be “one reference.” For example, a compilation of printed publications cannot be combined into one reference for purposes of Section 102(b) anticipation.

O. The Disclosure in the Prior Art Must Exactly Anticipate the Claimed Subject Matter In order to anticipate, the disclosure in a Section 102(b) printed publication must exactly describe claimed subject matter. This includes that the order or the arrangement of a claim’s limitations must be identical as between the claims and the reference. One cannot pick and choose between different examples in a single printed publication to arrive at the combination of the claimed subject matter. If this is necessary, the reference cannot anticipate under Section 102(b). However, one should consider the possibility of obviousness (as discussed in Chapter 8).

P. A Section 102(b) Printed Publication Is Prior Art for What It Discloses, Regardless of Any Comments or Suggestions Against the Claimed Invention For anticipation under Section 102(b), it does not matter if a printed publication disparages or otherwise teaches away from a claimed invention. If the limitations of the claim are in the reference and are enabled, the reference anticipates. This is unlike obviousness, where evidence such as negative comments about a claimed invention that might teach away from making the invention may be evidence against obviousness (see Chapter 8).

Practice Points

Q. Issued Patents Are Presumed to Be Valid, and the Party Challenging the Validity of a Patent Bears the Burden of Proof “An issued patent enjoys a presumption of validity. Thus, a party challenging patent validity has the burden to prove its case with clear and convincing evidence.”110

R. If a Section 102(b) Printed Publication Was Considered by the Patent Office in the Prosecution History of a Challenged Patent, the Burden of Proving Invalidity Based on That Reference Is Increased “When the examiner considered the asserted prior art and basis for the validity challenge during prosecution, [the] burden [of proving invalidity by clear and convincing evidence] becomes particularly heavy. Hewlett-Packard Co. v. Bausch & Lomb Inc., 909 F.2d 1464, 1467 (Fed. Cir. 1990).”111

S. Be Aware that Printed Publications May Contain Evidence of Prior Art Under Other Sections of 35 U.S.C. § 102, Including Evidence That Might Apply Less than One Year Before a Patent or Application’s Effective Priority Date As discussed in Chapter 7, printed publications may contain evidence of prior art under other sections of 35 U.S.C. § 102. This could include prior art that may apply to a U.S. patent less than one year before its effective priority date. Thus, one should not rule out printed publications made publically available less than one year before a patent’s effective priority date without first evaluating whether they may contain evidence of prior art under other sections of 35 U.S.C. § 102.

T. Be Aware of Special Rules for Means-Plus-Function Claims When evaluating potential anticipation, it is important to be aware of the possibility of means-plus-function claims. These are explained in this chapter and in detail in Chapter 2 (for example, Chapter 2 provides detailed guidance on determining whether a claim is written in means-plus-function format,

110. Impax Labs., Inc. v. Aventis Pharms. Inc., 545 F.3d 1312, 1314 (Fed. Cir. 2008). 111. Id.

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an issue that is often hotly contested between a patentee and a party challenging the patent). As discussed above, claim construction of means-plus-function claims includes both the structures that are explicitly set forth in a patent’s specification as corresponding to the claimed “means,” as well as “equivalents” of those structures as defined by 35 U.S.C. § 112, Paragraph 6. Thus, determining anticipation of means-plus-function claims is perhaps the only time that potentially anticipating subject matter is compared with “equivalents” of subject matter that are literally disclosed and claimed in a patent. For example, prior art may anticipate a means-plus-function claim when it discloses a structure that is not found in the patent and is not literally claimed but is “equivalent” under Section 112, Paragraph 6, to the structures that are literally disclosed.

U. Anticipation of Product-by-Process Claims Is Based Solely on the Product, Not the Process For purposes of determining anticipation, product-by-process claims are treated as if they were purely product claims. Thus, anticipation of productby-process claims is determined by comparing the properties of the product of the process of the claim with the properties of prior art products. A productby-process claim is anticipated if its product is anticipated. This is the case whether the prior art product was made via the claimed process or by a different process.

CHAP T ER

7 Patent Law Principle III: Validity Other Forms of Anticipation

I. Summary of General Principles of Anticipation II. On Sale (Section 102(b))

277 278

A. Two-Point Test

278

1. Commercial Offer for Sale

279

2. Ready for Patenting

279

B. Experimental Use Negation

279

III. Public Use (Section 102(b))

281

A. Definition of Public Use

282

IV. Abandonment (Section 102(c))

282

V. Patenting Abroad (Section 102(d))

284

VI. Derivation (Section 102(f))

287

VII. Activities Prior to the Invention of the Patent (Sections 102(a), (e), and (g))

288

A. The Advantages of Relying on Section 102(b) Prior Art for Evaluations and Opinions of Invalidity, Especially for Third-Party Patents

288

B. Evaluations and Opinions of Patent Invalidity Relying on Sections 102(a), (e), and (g)

289

VIII. Other Forms of Anticipation IX. Practice Points

290 293

A. The On-Sale Novelty Bar of Section 102(b) Must Be Established by a Two-Point Test

293

B. The Experimental Use Negation

293

C. Public Use Under Section 102(b)

293

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276

Chapter 7 Patent Law Principle III: Validity D. Patenting Abroad (Section 102(d)) Requires Issuance of a Patent, but Does Not Require That the Anticipating Subject Matter Be Claimed in a Patent, or that the Patent Be Publically Accessible

294

E. Derivation Under Section 102(f) Requires Proof of Both Prior Conception by a Person Other than the Inventor and Communication of That Conception to the Inventor

294

F. Use Caution in Evaluating and Opining on Parts of Section 102 That Require Proof of Invention (i.e., Sections 102(a), (e), and (g))

294

G. Be Aware of Other Forms of Anticipation

294

Summary of General Principles of Anticipation 277

Usage Note: This chapter covers invalidity based on anticipation other than by printed publication. Chapter 6 covers general principles that apply to all forms of anticipation. Accordingly, Chapter 6 should be consulted in conjunction with this chapter. Other chapters that are particularly relevant to this chapter include Chapter 2 (claim construction) and Chapter 8 (obviousness).

I. Summary of General Principles of Anticipation Chapter 6 discusses general principles of anticipation, which apply to all forms of anticipation, in the context of the most common form of anticipation asserted in U.S. courts and by the U.S. Patent Office, anticipation by printed publication.1 This chapter covers other forms of anticipation under the U.S. Patent Statute (35 U.S.C. § 102).2 Because the general principles of anticipation apply to all forms of anticipation, this chapter should be read in conjunction with Chapter 6. The general principles of anticipation are summarized below. The general principles of anticipation include: (a) “[a]n issued patent enjoys a presumption of validity. Thus, a party challenging patent validity has the burden to prove its case with clear and convincing evidence”;3 (b) invalidity must be determined on a claim-by-claim basis, and a finding that one claim of a patent is invalid has no effect on the other clams;4 (c) determining anticipation requires claim construction, and a comparison of the limitations of the construed claim with the elements of the potentially anticipating disclosure or event;5 (d) to anticipate, a single prior art disclosure (e.g., a printed publication) or event (e.g., a sale) must disclose explicitly or inherently every limitation of a patent claim;6 (e) to anticipate, a single prior art disclosure or event must also

1. See Chapter 6; 35 U.S.C.S. § 102(b) (2009). 2. 35 U.S.C.S. § 102 (2009). 3. E.g., Impax Labs., Inc. v. Aventis Pharms. Inc., 545 F.3d 1312, 1314 (Fed. Cir. 2008); 35 U.S.C.S. § 282 (2009). 4. E.g., Sandt Tech., Ltd. v. Resco Metal & Plastics Corp., 264 F.3d 1344, 1356 (Fed. Cir. 2001) (quoting 35 U.S.C. § 282) (“All claims are ‘presumed valid independently of the validity of the other claims.’”); 35 U.S.C.S. § 282 (2009). 5. E.g., Astra Aktiebolag v. Andrx Pharms., Inc. (In re Omeprazole Patent Litig.), 483 F.3d 1364, 1371 (Fed. Cir. 2007) (“An anticipation analysis requires a comparison of the construed claim to the prior art.”). 6. E.g., Schering Corp. v. Geneva Pharms., Inc., 339 F.3d 1373, 1377 (Fed. Cir. 2003). (“A patent is invalid for anticipation if a single prior art reference discloses each and every limitation of the claimed invention. Moreover, a prior art reference may anticipate without disclosing a feature of the claimed invention if that missing characteristic is necessarily present, or inherent, in the single anticipating reference.”) (citation omitted).


disclose every claim limitation ‘arranged as in the claim’;7 (f) an anticipatory reference may disparage or teach away from the claimed invention;8 (g) meansplus-function claims are an exception to the general rule that equivalents are not to be considered in determining anticipation;9 and (h) for purposes of determining anticipation, product-by-process claims are construed based only on the product, and not on the process limitations.10

II. On Sale (Section 102(b)) In addition to printed publications, as discussed in Chapter 6, Section 102(b) also provides that one may not obtain a patent where: the invention was . . . on sale in this country, more than one year prior to the date of the application for patent in the United States[.]11

A. Two-Point Test The U.S. Supreme Court in Pfaff set forth a two-point test for determining when the on-sale bar of Section 102(b) applies: [T]he on-sale bar applies when two conditions are satisfied before the critical date. First, the product must be the subject of a commercial offer for sale. . . . Second, the invention must be ready for patenting.12

As explained by the Supreme Court, the two-point test: [F]ulfills the two essential conditions of the on-sale bar. As succinctly stated by Learned Hand: “It is a condition upon an inventor’s right to a patent that he shall not exploit his discovery competitively after it is ready for patenting; he must content

7. E.g., Net Moneyin, Inc. v. Verisign, Inc., 545 F.3d 1359, 1369 (Fed. Cir. 2008) (quoting Connell v. Sears, Roebuck & Co., 722 F.2d 1542, 1548 (Fed. Cir. 1983)). 8. E.g., Bristol-Myers Squibb Co. v. Ben Venue Labs., 246 F.3d 1368, 1378 (Fed. Cir. 2001) (quoting Celeritas Techs. Ltd. v. Rockwell Int’l Corp., 150 F.3d 1354, 1366 (Fed. Cir. 1998)) (“A reference is no less anticipatory if, after disclosing the invention, the reference then disparages it. Thus, the question whether a reference ‘teaches away’ from the invention is inapplicable to an anticipation analysis.”). 9. E.g., Omega Eng’g, Inc. v. Raytek Corp., 334 F.3d 1314, 1322 (Fed. Cir. 2003). 10. E.g., SmithKline Beecham Corp. v. Apotex Corp., 439 F.3d 1312, 1317 (Fed. Cir. 2006). 11. 35 U.S.C.S. § 102(b) (2009). 12. Pfaff v. Wells Elecs, 525 U.S. 55, 67 (1998) (emphasis added).

On Sale (Section 102(b)) himself with either secrecy, or legal monopoly.” Metallizing Engineering Co. v. Kenyon Bearing & Auto Parts Co., 153 F.2d 516, 520 (CA2 1946).13

1. Commercial Offer for Sale The Federal Circuit has held that under the first part of the Pfaff two-point test, “[o]nly an offer which rises to the level of a commercial offer for sale, one which the other party could make into a binding contract by simple acceptance (assuming consideration), constitutes an offer for sale under § 102(b).”14 The court later held, “evidence of an offer to sell is sufficient to trigger the on-sale bar under 35 U.S.C. § 102(b). There is no requirement that the sale be completed.”15 2. Ready for Patenting As explained by the Supreme Court in Pfaff, the second part of the test, “ready for patenting:” [M]ay be satisfied in at least two ways: by proof of reduction to practice before the critical date; or by proof that prior to the critical date the inventor had prepared drawings or other descriptions of the invention that were sufficiently specific to enable a person skilled in the art to practice the invention. In this case the second condition of the on-sale bar is satisfied because the drawings Pfaff sent to the manufacturer before the critical date fully disclosed the invention.16

B. Experimental Use Negation Experimental use involves the testing of noncommercial embodiments of an invention during the course of perfecting it.17 U.S. courts have long held that experimental use operates to negate anticipation under Section 102(b). As stated by the Federal Circuit: “This court has repeatedly stressed that experimental use does not give rise to a free-standing doctrinal exception to statutory bars, but instead operates to negate application of section 102(b)[.]”18

13. 14. 15. 16. 17. 18.

Id. at 68. Group One, Ltd. v. Hallmark Cards, Inc., 254 F.3d 1041, 1048 (Fed. Cir. 2001). Cargill, Inc. v. Canbra Foods, Ltd., 476 F.3d 1359, 1370 (Fed. Cir. 2007). Pfaff, 525 U.S. at 67–68. E.g., Pfaff, 525 U.S. at 64; EZ Dock v. Schafer Sys., 276 F.3d 1347, 1351 (Fed. Cir. 2002). E.g., EZ Dock, 276 F.3d at 1352–53.

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In Pfaff, the Supreme Court expressly recognized the experimental use negation to Section 102(b) patentability bars: Nevertheless, an inventor who seeks to perfect his discovery may conduct extensive testing without losing his right to obtain a patent for his invention— even if such testing occurs in the public eye. The law has long recognized the distinction between inventions put to experimental use and products sold commercially.19

In EZ Dock, the Federal Circuit explained experimental use at length: Experimentation evidence includes “tests needed to convince [the inventor] that the invention is capable of performing its intended purpose in its intended environment.” Gould Inc. v. United States, 217 Ct. Cl. 167, 579 F.2d 571 (Ct. Cl. 1978); Kolmes v. World Fibers Corp., 107 F.3d 1534, 1540 (Fed. Cir. 1997) (“testing was . . . required in such an environment in order to ensure that the invention would work for its intended purpose”). Indeed in Pfaff, the Supreme Court reiterated its guidance in City of Elizabeth v. American Nicholson Pavement Co., 97 U.S. 126, 137, 24 L. Ed. 1000 (1877), that an inventor does not inappropriately delay filing “by a bona fide effort to bring his invention to perfection, or to ascertain whether it will answer the purpose intended.” Pfaff, 525 U.S. at 64–65. Thus, the Supreme Court and this court apply the experimental use negation without conflict with the “ready for patenting” prong of the new on-sale bar test. Indeed as noted earlier, the Supreme Court acknowledged that a litigant may show readiness for patenting with evidence of reduction to practice. Like evidence of experimentation sufficient to negate a bar, reduction to practice involves proof that an invention will work for its intended purpose. Scott v. Finney, 34 F.3d 1058, 1061 (Fed. Cir. 1994). Even beyond this overlap of the experimental use negation and the ready for patenting standard, however, the Supreme Court explicitly preserved proof of experimentation as a negation of statutory bars. After Schafer established its prima facie case that the 055 patent was invalid due to an on-sale bar, EZ Dock put forth evidence to negate that evidence by showing that its sale to Mr. Greden was experimental. When Mr. Greden purchased his dock, EZ Dock was not yet selling any docks. Mr. Neitzke did not have a “for sale” sign, brochure, or any other markings to indicate that the docks he had in his office supply store were for sale. Rather, Mr. Greden initiated the purchase of the dock. Mr. Greden did not pay full market price for the dock. Moreover Mr. Neitzke added free equipment and free installation to the price he did charge Mr. Greden. This evidence creates a genuine issue regarding the factual support for whether the inventors offered their invention for a commercial sale under market conditions in accordance with the first part of the Pfaff test.

19. Pfaff, 525 U.S. at 64.

Public Use (Section 102(b)) 281 By other actions, the inventors showed that their sale was experimental rather than premature commercial exploitation of their invention. Cont’l Plastic Containers v. Owens Brockway Plastic Prods., 141 F.3d 1073, 1080 (Fed. Cir. 1998) (the on sale bar prevents commercial exploitation of the invention beyond the statutory term). For instance, this court has often consulted evidence of monitoring to discern the distinction between experimental and commercial sales. TP Lab., 724 F.2d at 972; Grain Processing Corp. v. Am. Maize-Prods. Co., 840 F.2d 902, 906 (Fed. Cir. 1988). In this case, Mr. Neitzke and Mr. Vierus both visited the dock that Mr. Greden purchased on several occasions. Moreover they made repairs for free. These facts show that the inventors were still working to detect and correct flaws in their invention. This court and its predecessor have noted that experimentation negates a bar when the inventor tests claimed features of the invention. In re Theis, 610 F.2d 786, 793 (CCPA 1979) (“It is settled law that . . . experimental use . . . does not apply to experiments performed with respect to non-claimed features of an invention.”); In re Brigance, 792 F.2d 1103, 1109 (Fed. Cir. 1986). In Manville Sales Corp. v. Paramount Sys. Inc., 917 F.2d 544, 550 (Fed. Cir. 1990), this court permitted the inventor to test the invention for durability during winter although claims did not expressly mention durability or severe weather conditions. Instead this court reasoned that the nature of the invention (luminaires) required durability so that the claims’ reference to the subject matter placed that topic within the proper frame of experimentation. In this case, the 055 patent claims a floating dock. These floating docks, by their nature, must endure all kinds of water conditions, including choppy water created by weather and boating. The waters at Bass Camp, the location of Mr. Greden’s dock, were much rougher than the waters in Mr. Neitzke’s marina where he was testing other dock sections. Mr. Neitzke testified that he sold the dock to Mr. Greden to test how it would hold up under these more turbulent water conditions. In other words, Mr. Neitzke testified that he sold the dock to Mr. Greden to determine whether it was “capable of performing its intended purpose in its intended environment.” Gould, 579 F.2d at 583.20

III. Public Use (Section 102(b)) Section 102(b) also provides that one may not obtain a patent where: the invention was . . . in public use . . . in this country, more than one year prior to the date of the application for patent in the United States[.]21

20. EZ Dock, 276 F.3d at 1351. 21. 35 U.S.C.S. § 102(b) (2009).

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A. Definition of Public Use As explained by the Federal Circuit: “We have defined ‘public use’ as including ‘any use of [the claimed] invention by a person other than the inventor who is under no limitation, restriction or obligation of secrecy to the inventor.’“ Lough v. Brunswick Corp., 86 F.3d 1113, 1119 (Fed. Cir. 1996) (citations omitted).22

Indeed, public use anticipation has a storied history, including a U.S. Supreme Court case from 1882 involving the public use of a corset spring. As explained by the Federal Circuit: The classical standard for assessing the public nature of a use was established in Egbert v. Lippmann, 104 U.S. 333, 336, 26 L. Ed. 755 (1881). In Egbert, the inventor of a corset spring gave two samples of the invention to a lady friend, who used them for more than two years before the inventor applied for a patent. Egbert, 104 U.S. at 335. The invention was sewn into a corset and therefore, by its nature, not visible to the public. Thus, the Court had to decide whether such an invention could nevertheless be “public.” Although he later married the lady friend, the inventor in Egbert received no commercial advantage. Nonetheless, on these facts the Court established the principle that it was indeed “public” use to give or sell the invention “to another, to be used by the donee or vendee, without limitation or restriction, or injunction of secrecy.” Id. at 336.23

IV. Abandonment (Section 102(c)) Section 102(c) provides that one shall be entitled to a patent unless “he has abandoned the invention[.]”24 This part of Section 102 is so rarely invoked that there is virtually no case law on this issue; however, the plain meaning of the statute is clear. Additionally, the concept of abandonment has been addressed (although also rarely) in the context of abandonment under Section 102(g). For example: Turning to the question of what constitutes abandonment [under Section 102(g)], we must first recognize a distinction between abandonment of a patent application and abandonment of an invention. It is uncontested in this suit that

22. E.g., Jumpsport, Inc. v. Jumpking, Inc., 191 Fed. Appx. 926, 935 (Fed. Cir. 2006); Baxter Intern., Inc. v. COBE Labs., Inc., 88 F.3d 1054, 1058 (Fed. Cir. 1996). 23. Invitrogen Corp. v. Biocrest Mfg., L.P., 424 F.3d 1374, 1382 (Fed. Cir. 2005). 24. 35 U.S.C.S. § 102(c) (2009).

Abandonment (Section 102(c)) 283 Webber abandoned whatever entitlement he might have had to a patent on his invention. He concededly did so by his failure to pursue the application to fruition in the face of adverse rulings by the Patent Office. The patent application was formally abandoned on January 21, 1961. But it does not necessarily follow that he also abandoned his invention. Allen v. Brady, supra, at 67, 184 USPQ at 386. The rationale undergirding this distinction is well founded. Certainly an inventor who does not desire the temporary monopoly accorded by the patent laws is under no duty to even seek a patent. He is entirely free to donate to the public the product of his ingenuity by forsaking the protection of a patent. If he does so his entitlement to a temporary monopoly ends. Likewise, a subsequent invention would not be patentable because of prior public use, 35 U.S.C. § 102(a), or prior invention, 35 U.S.C. § 102(g). It has been said that it would be unjust to hold that an inventor’s decision to contribute his invention to the public without patent protection should impair his right to market his own invention. Dunlop Holdings Limited v. Ram Golf Corp., 524 F.2d 33, 37, 188 USPQ 481, 484 (7th Cir. 1975). See also, Corona Cord Tire Co. v. Dovan Chemical Corp., 276 U.S. 358, 72 L Ed 610 (1927). If, however, an inventor abandons both his patent application and his invention without making it available to the public, then he not only loses his entitlement to a patent but should not, at a later date, be heard to complain that someone else, by virtue of rediscovery, has the patent. So, it seems clear that abandonment of a patent application is not controlling in an analysis under § 102(g), which by its own terms refers to abandonment of an invention. See, Walker, Patents § 129, at 640 (Deller’s 2d ed., 1964). The fact that an application has been abandoned is merely one circumstance to be considered in determining whether the invention itself was abandoned. Allen v. Brady Co., supra; Int’l Glass Co., Inc. v. United States, 408 F.2d 395, 403, 161 USPQ 116 (Ct. Cf. 1969). We cannot attempt to circumscribe with precision the actions or inactions which constitute abandonment of an invention. This decision depends on considerations of all the circumstances. At one extreme is aggressive public promotion of one’s invention. At the other is the inventor who discards his invention without attempting to bring it to the attention of those who may benefit therefrom. There are two elements which we feel are integral parts of the concept of abandonment. One is that the abandonment of an invention must be voluntary. (Webber testified that he never intended to abandon it.) The second is that the decision to abandon must be complete; that is, the inventor must cease all efforts to exploit his invention. These two elements are aptly set forth in Allen, where the court states that “abandonment contemplates a voluntary decision by the original inventor to terminate any effort to practice his conception.” 508 F.2d, at 67, 184 USPQ 386.25

25. See Continental Copper & Steel Indus., Inc. v. New York Wire Co., 1976 U.S. Dist. LEXIS 11859, 21–22 (M.D. Pa. 1976) (footnotes omitted) (discussing abandonment in the context of Section 102(g)).


V. Patenting Abroad (Section 102(d)) Section 102(d) provides that a person may not obtain a U.S. patent where [T]he invention was first patented or caused to be patented, or was the subject of an inventor’s certificate, by the applicant or his legal representatives or assigns in a foreign country prior to the date of the application for patent in this country on an application for patent or inventor’s certificate filed more than twelve months before the filing of the application in the United States[.]26

The Federal Circuit has held: Three things must occur for a patent to be invalid under section 102(d). First, the applicant must file an application on the invention in another country. Then, more than twelve months later, the applicant must file for a patent on the same invention in this country. Third, the foreign patent must issue before the applicant filed the U.S. patent application. If all three occur, then the U.S. patent is invalid under section 102(d).27

Furthermore, it does not matter whether the non-U.S. patent claimed the subject matter of a U.S. patent or merely disclosed it in the patent’s specification.28 Further still, a non-U.S. patent need not be publically available to be “patented” under Section 102(d).29 The Federal Circuit explained this as follows: Kathawala concedes that the Spanish patent issued and was enforceable on January 21, 1985, a date prior to the U.S. filing date. Kathawala nevertheless asserts that the effective date of a foreign patent for purposes of § 102(d), the date on which an invention is “patented,” is not the date the foreign patent issues and becomes enforceable, but the date on which it becomes publicly available. The law on this issue was well established by our predecessor court in In re Monks, 588 F.2d 308 (CCPA 1978), and In re Talbott, 443 F.2d 1397 (CCPA 1971). In Monks, the court considered the date on which an invention was “patented” in Great Britain under § 102(d), and inquired whether the effective date for purposes of that section was the date on which the complete specification was published, a date prior to the U.S. filing date, or the date on which the patent was “sealed” under British law, which occurred after the U.S. filing date. After reviewing the legislative history of section 102(d), the court concluded

26. 27. 28. 29.

35 U.S.C.S. § 102(d) (2009). Bayer AG & Bayer Corp. v. Schein Pharms., Inc., 301 F.3d 1306, 1312 (Fed. Cir. 2002). In re Kathawala, 9 F.3d 942, 946–947 (Fed. Cir. 1993). Id.

Patenting Abroad (Section 102(d)) 285 that “patented” means “a formal bestowal of patent rights from the sovereign to the applicant such as that which occurs when a British patent is sealed.” 588 F.2d at 310. It was on the “sealed” date that the patentee’s rights became fixed and settled and the rights of the patent accrued, not the later publication date. The court thus reversed the examiner’s rejection, since the applicant’s British patent was not sealed and hence “patented” until after his U.S. filing date. In Talbott the court held that a foreign patent need not be publicly available to be “patented” under section 102(d). The court rejected the applicant’s argument that the statutory bar did not apply because he had kept his German patent secret until after his U.S. filing date. 58 C.C.P.A. 1374, 443 F.2d 1397. See also Duplan Corp. v. Deering Milliken Research Corp., 487 F.2d 459 (4th Cir. 1973), cert. denied, 415 U.S. 978, 39 L. Ed. 2d 874, 94 S. Ct. 1565 (1974) (An invention is “patented” in France under section 102(d) on its “delivre” date, the date on which the inventor’s exclusive rights formally accrue, not on the later publication date when the patent is made publicly available.). The import of the decisions in Monks and Talbott is that, contrary to Kathawala’s argument, it is irrelevant under section 102(d) whether the Spanish patent was publicly available prior to the U.S. filing date. Rather, the Board correctly concluded that an invention is “patented” in a foreign country under section 102(d) when the patentee’s rights under the patent become fixed. See Marina V. Schneller, Patenting and Filing Abroad as a Bar to U.S. Patent Grant— History, Purpose and Sanctions of 35 U.S.C. § 102(d), 11 Int’l Rev. Indus. Prop. & Copyright L. 324, 345 (1980) (“The date upon which the foreign patent is ‘patented,’ within the meaning of 35 U.S.C. § 102(d), is the date upon which the rights to enforce the foreign patent first accrue to the U.S. applicant . . . [and] the publication date of the foreign patent is irrelevant. . . .”). In the instant case, Kathawala stipulated that the Spanish patent was enforceable on January 21, 1985, the date the patent was granted and a date prior to the U.S. filing date. Hence, the Board correctly concluded that Kathawala’s invention was “patented” in Spain prior to his U.S. filing date. Kathawala’s second argument is that the “invention” patented in Spain is not the same “invention” claimed in claims 1 and 2. Kathawala argues that each claim defines a separate invention, and since the Spanish claims are directed to processes for making the subject compounds, and claims 1 and 2 of the instant application are directed to the compounds themselves, the “invention” patented in Spain is not the same “invention” as that of claims 1 and 2. Hence Kathawala urges that the rejection of claims 1 and 2 under section 102(d) based on the Spanish patent was erroneous. We do not agree. It is a truism that a claim defines an invention, and a claim to a composition is indeed different from a claim to a process. However, we cannot let rigid definitions be used in situations to which they don’t apply to produce absurd results. The word “invention” in the Patent Act has many meanings depending on the context. See Paul M. Janicke, The Varied Meanings of “Invention” in Patent Practice: Different Meanings in Different Situations, in

286 Chapter 7 Patent Law Principle III: Validity Patent Law Perspectives App.-1 (Donald R. Dunner et al. eds., 1970). In the present context, it must have a meaning consistent with the policy and purpose behind section 102(d), which is to require applicants for patent in the United States to exercise reasonable promptness in filing their applications after they have filed and obtained foreign patents. See Donald S. Chisum, Patents § 6.04(1) (1993). Kathawala made an “invention” relating to a group of new compounds. He filed applications in Greece and Spain disclosing his invention as consisting of four different aspects: compounds, compositions, methods of use, and processes of making the compounds. While Kathawala had the potential to claim each of those aspects, and did so in his Greek application, he chose to claim only the processes in Spain because, he asserts, pharmaceutical compositions and methods of use were not patentable under Spanish patent law during the relevant time period. It would be contrary to the policy of the statute to permit an applicant to file a foreign application on an invention that may be claimed by four related types of claims, obtain a grant of whatever patent rights were available in the foreign country, and then file an application in the United States, after the foreign patent has issued and more than one year after the foreign filing date on the same invention, with claims directed to those aspects of the invention which were unpatentable in the foreign country. That would permit grant of a U.S. patent on what is essentially the same “invention” as that patented in the foreign country and would frustrate the policy underlying section 102(d), which is to encourage the filing of applications in the United States within a year of the foreign filing of a counterpart patent application. An applicant cannot evade the statutory bar by citing alleged defects of foreign law concerning scope of patentable subject matter. We thus hold that when an applicant files a foreign application fully disclosing his invention and having the potential to claim his invention in a number of different ways, the reference in section 102(d) to “invention . . . patented” necessarily includes all disclosed aspects of the invention. n4 Thus, the section 102(d) bar applies regardless whether the foreign patent contains claims to less than all aspects of the invention. While we appreciate Kathawala’s assertion that he didn’t realize that the foreign patents had issued claiming the esters until the critical date had passed, and that he unintentionally failed to file in this country within the statutory time period, we must conclude that Kathawala had his chance to file his application in this country and failed to do so in time to avoid the statutory bar. The Board thus properly affirmed the examiner’s rejection of claims 1 and 2 under § 102(d) based on the Spanish patent.30

30. Id. (footnotes omitted).

Derivation (Section 102(f)) 287

VI. Derivation (Section 102(f)) Section 102(f) provides that a person may not obtain a U.S. patent where, “he did not himself invent the subject matter sought to be patented[.]”31 The Federal Circuit has instructed: To prove derivation under § 102(f), “the party asserting invalidity must prove both prior conception of the invention by another and communication of that conception to the patentee” by clear and convincing evidence. Gambro Lundia AB v. Baxter Healthcare Corp., 110 F.3d 1573, 1576 (Fed. Cir. 1997). The communication must be sufficient to enable one of ordinary skill in the art to make the patented invention. Id. at 1578.32

As further explained by the court: The Supreme Court announced the standard for finding communication of a prior conception over 125 years ago in Agawam Woolen v. Jordan, 74 U.S. (7 Wall.) 583, 19 L. Ed. 177 (1868). The Court required a showing that the communication “enabled an ordinary mechanic, without the exercise of any ingenuity and special skill on his part, to construct and put the improvement in successful operation.” Id. at 602–03 (emphasis added). This court’s predecessor consistently applied this Supreme Court standard. See, e.g., Hedgewick v. Akers, 497 F.2d 905, 908 (CCPA 1974) (“Communication of a complete conception must be sufficient to enable one of ordinary skill in the art to construct and successfully operate the invention.”)(emphasis added); DeGroff v. Roth, 56 C.C.P.A. 1331, 412 F.2d 1401, 1405 (CCPA 1969).33

In Price, the Federal Circuit explained derivation under Section 102(f) as follows: Although derivation and priority of invention [under Section 102(g)] are akin in that both focus on inventorship and both may be resolved by the board in an interference action, they are distinct concepts. Applegate v. Scherer, 51 C.C.P.A. 1416, 332 F.2d 571, 573 & n.1 (CCPA 1964). A claim that a patentee derived an invention addresses originality—who invented the subject matter . . . ? Hedgewick v. Akers, 497 F.2d 905, 907 (CCPA 1974). Under this attack on a patent or patent application, the proponent asserts that the patentee did not “invent” the subject matter of the count because the patentee derived the invention from another. Davis v. Reddy, 620 F.2d 885, 888 n.2 (CCPA 1980). To prove derivation in an

31. 35 U.S.C.S. § 102(f) (2009). 32. Eaton Corp. v. Rockwell Int’l Corp., 323 F.3d 1332, 1344 (Fed. Cir. 2003). 33. Gambro Lundia AB v. Baxter Healthcare Corp., 110 F.3d 1573, 1577 (Fed. Cir. 1997).

288 Chapter 7 Patent Law Principle III: Validity interference proceeding, the person attacking the patent must establish prior conception of the claimed subject matter and communication of the conception to the adverse claimant. Hedgewick, 497 F.2d at 908; Mead v. McKirnan, 585 F.2d 504, 507 (CCPA 1978). While the ultimate question of whether a patentee derived an invention from another is one of fact, Hedgewick, 497 F.2d at 908; Beall v. Ormsby, 154 F.2d 663, 667 (CCPA 1946), the determination of whether there was a prior conception is a question of law, Fiers v. Sugano, 984 F.2d 1164 (Fed. Cir. 1993), which is based upon subsidiary factual findings.34

VII. Activities Prior to the Invention of the Patent (Sections 102(a), (e), and (g)) A. The Advantages of Relying on Section 102(b) Prior Art for Evaluations and Opinions of Invalidity, Especially for Third-Party Patents First, as discussed above and in Chapter 6, the applicability of prior art to a U.S. patent under 35 U.S.C. § 102(b) is based on a determination of the effective filing date of the patent and the date of the prior art reference or event. The effective filing date of a U.S. patent is usually easily ascertained from publicly available information.35 Additionally, determining the date of potentially anticipatory events, especially the date of publication of many Section 102(b) printed publications, is usually a straightforward process from publicly available information. Thus, an attorney evaluating or opining on the invalidity of a patent based on Section 102(b) (especially based on published references as Section 102(b) printed publications) can usually rely on the applicability of the prior art with a high degree of certainty. It is for this reason that most evaluations and opinions of invalidity of U.S. patents, especially of third party patents, are based on Section 102(b) prior art, with Section 102(b) printed publications being the most common form of prior art used. This is especially true for opinions of invalidity as to third party patents for purposes of avoiding willful infringement and for clearance (“freedom to operate”).

34. Price v. Symsek, 988 F.2d 1187, 1190 (Fed. Cir. 1993). 35. As discussed in Chapter 6, if the application that issued as the patent is related to a priority application as, or via a continuation-in-part application, there may be some issues in determining whether the patent’s claims are supported by the earlier patent. However (and as also discussed in Chapter 6), if the patent issued from a single patent application, or claimed priority to earlier U.S. patent applications as continuation or divisional applications, the determination of the effective priority filing date of a U.S. patent is straightforward.

Activities Prior to the Invention of the Patent (Sections 102(a), (e), and (g)) 289

B. Evaluations and Opinions of Patent Invalidity Relying on Sections 102(a), (e), and (g) Other provisions of Section 102 (Sections 102(a), (e), or (g)) can present much greater challenges to evaluating and opining attorneys in determining the applicability of potentially invalidating events, especially as to third party patents. This is because the applicability of prior art under these sections is determined at least by the date of the invention of the patent, and in some cases, also of the invention date of the Section 102 event. Specifically, Sections 102(a), (e), and (g) provide that one may not obtain a U.S. patent on an invention: (a) when the invention was known or used by others in this country, or patented or described in a printed publication in this or a foreign country, before the invention thereof by the applicant for a U.S. patent (codified in Section 102(a)); (b) when the invention was described, but not claimed, in a published U.S. patent application by another filed in the U.S. before the invention by the applicant for a patent, or the invention was described, but not claimed, in an issued U.S. patent granted on an application by another filed in the U.S. before the invention by the applicant for a patent (codified in Section 102(e)); or (c) when the invention was described claimed in a U.S. patent application or an issued U.S. patent by another and where that party can prove invention prior to the date of invention of the patent applicant, or when the invention made by another and that party can prove invention prior to the date of invention by the patent applicant (codified in Section 102(g)). It is difficult, if not impossible, to rely on these provisions in evaluations and opinions of invalidity of third party patents because the evidence necessary to determine the invention date of the patent is typically not publicly available. For this reason, it is rare for opinions of invalidity to be based on Sections 102(a), (e), and (g). As an example of the type of information necessary to properly evaluate invalidity based on these provisions, the case of z4 Technologies is illuminating.36 In that matter, the Federal Circuit discussed what is required to invalidate a patent under Section 102(g), including what is necessary to prove an invention date: Microsoft argues that the LVP feature of its BP 98 software product anticipates the asserted claims under section 102(g)(2). That section provides that a patent is invalid if “before such person’s invention thereof, the invention was made in this country by another inventor. . . .” 35 U.S.C. § 102(g)(2). “This court has interpreted § 102(g) to provide that ‘priority of invention goes to the first party to reduce an invention to practice unless the other party can show that it was the first to conceive the invention and that it exercised reasonable diligence in

36. z4 Techs., Inc. v. Microsoft Corp., 507 F.3d 1340 (Fed. Cir. 2007).

290

Chapter 7 Patent Law Principle III: Validity later reducing that invention to practice.’“ Monsanto Co. v. Mycogen Plant Sci., Inc., 261 F.3d 1356, 1362 (Fed. Cir. 2001) (quoting Mahurkar v. C.R. Bard, Inc., 79 F.3d 1572, 1577 (Fed. Cir. 1996)). Microsoft bore the burden of demonstrating by clear and convincing evidence that BP 98 constituted an actual reduction to practice of the invention claimed in z4’s patents. See, e.g., SRAM Corp. v. AD-II Eng’g, Inc., 465 F.3d 1351, 1357 (Fed. Cir. 2006) (“Under the patent statutes, a patent enjoys a presumption of validity, see 35 U.S.C. § 282, which can be overcome only through facts supported by clear and convincing evidence.”). “In order to establish an actual reduction to practice, the inventor must prove that: (1) he constructed an embodiment or performed a process that met all the limitations . . . and (2) he determined that the invention would work for its intended purpose.” Cooper v. Goldfarb, 154 F.3d 1321, 1327 (Fed. Cir. 1998). “Testing is required to demonstrate reduction to practice in some instances because without such testing there cannot be sufficient certainty that the invention will work for its intended purpose.” Slip Track Sys., Inc. v. Metal-Lite, Inc., 304 F.3d 1256, 1267 (Fed. Cir. 2002). Because the necessity and sufficiency of such testing are factual issues, see id. at 1268, substantial evidence in the record supporting a finding that Microsoft’s LVP software did not work for its intended purpose will suffice to support the jury’s verdict that z4’s patents are not invalid for anticipation, see Eli Lilly & Co. v. Aradigm Corp., 376 F.3d 1352, 1362 (Fed. Cir. 2004) (noting that when we review the denial of a post-verdict JMOL “on a mixed question of law and fact . . . we must sustain the jury’s conclusion unless the jury was not presented with substantial evidence to support any set of implicit findings sufficient under the law to arrive at its conclusion”); Taskett v. Dentlinger, 344 F.3d 1337, 1339 (Fed. Cir. 2003) (noting that reduction to practice is a question of law predicated on subsidiary factual findings).37

As can be readily seen from this discussion, proving invention dates in order to prove invalidity of patents is an exacting and intensely fact-based process in which the necessary facts are generally not available to the attorney evaluating or opining on the validity of a third party patent. For these reasons, it is generally best to avoid evaluating or opining on invalidity of third party patents based on these provisions of Section 102.

VIII. Other Forms of Anticipation Section 102 of the U.S. Patent Statute (35 U.S.C. § 102)38 provides specific forms of anticipation in addition to those discussed above and in Chapter 6.

37. Id. at 1352. 38. 35 U.S.C.S. § 102 (2009).

Other Forms of Anticipation 291

These are not discussed in detail because they are rarely used in evaluations and opinions of U.S. patents. Nonetheless, they are statutory bars to patentability. Accordingly, they should be considered when evaluating or opining on the validity of U.S. patents. Section 102 of the U.S. Patent Statute in its entirety as reads follows: A person shall be entitled to a patent unless— (a) the invention was known or used by others in this country, or patented or described in a printed publication in this or a foreign country, before the invention thereof by the applicant for patent, or (b) the invention was patented or described in a printed publication in this or a foreign country or in public use or on sale in this country, more than one year prior to the date of the application for patent in the United States, or (c) he has abandoned the invention, or (d) the invention was first patented or caused to be patented, or was the subject of an inventor’s certificate, by the applicant or his legal representatives or assigns in a foreign country prior to the date of the application for patent in this country on an application for patent or inventor’s certificate filed more than twelve months before the filing of the application in the United States, or (e) the invention was described in (1) an application for patent, published under section 122(b) [35 USCS § 122(b)], by another filed in the United States before the invention by the applicant for patent or (2) a patent granted on an application for patent by another filed in the United States before the invention by the applicant for patent, except that an international application filed under the treaty defined in section 351(a) [35 USCS § 351(a)] shall have the effects for the purposes of this subsection of an application filed in the United States only if the international application designated the United States and was published under Article 21(2) of such treaty in the English language; or (f) he did not himself invent the subject matter sought to be patented, or (g) (1) during the course of an interference conducted under section 135 [35 USCS § 135] or section 291 [35 USCS § 291], another inventor involved therein establishes, to the extent permitted in section 104 [35 USCS § 104], that before such person’s invention thereof the invention was made by such other inventor and not abandoned, suppressed, or concealed, or (2) before such person’s invention thereof, the invention was made in this country by another inventor who had not abandoned, suppressed, or concealed it. In determining priority of invention under this subsection, there shall be considered not only the respective dates of conception and reduction to practice of the invention, but also the reasonable diligence of one who was first to conceive and last to reduce to practice, from a time prior to conception by the other.39

39. Id.


Anticipating events and disclosures under Section 102 include: (a) prior knowledge by others in the United States: the invention was known . . . by others in this country . . . before the invention thereof by the applicant for patent;40 (b) prior patenting in the United States or abroad, including filing patent applications and inventor’s certificates: the invention was . . . patented . . . in this or a foreign country[] before the invention thereof by the applicant for patent;41 the invention was patented . . . in this or a foreign country . . . more than one year prior to the date of the application for patent in the United States;42 the invention was first patented or caused to be patented, or was the subject of an inventor’s certificate, by the applicant or his legal representatives or assigns in a foreign country prior to the date of the application for patent in this country on an application for patent or inventor’s certificate filed more than twelve months before the filing of the application in the United States;43 the invention was described in (1) an application for patent, published under section 122(b) [35 USCS § 122(b)], by another filed in the United States before the invention by the applicant for patent or (2) a patent granted on an application for patent by another filed in the United States before the invention by the applicant for patent, except that an international application filed under the treaty defined in section 351(a) [35 USCS § 351(a)] shall have the effects for the purposes of this subsection of an application filed in the United States only if the international application designated the United States and was published under Article 21(2) of such treaty in the English language;44 and (c) prior invention by another: (1) during the course of an interference conducted under section 135 [35 USCS § 135] or section 291 [35 USCS § 291], another inventor involved therein establishes, to the extent permitted in section 104 [35 USCS § 104], that before such person’s invention thereof the invention was made by such other inventor and not abandoned, suppressed, or concealed, or (2) before such person’s invention thereof, the invention was made in this country by another inventor who had not abandoned, suppressed,

40. 41. 42. 43. 44.

35 U.S.C.S. § 102(a) (2009). Id. 35 U.S.C.S. § 102(b) (2009). 35 U.S.C.S. § 102(d) (2009). 35 U.S.C.S. § 102(e) (2009).

Practice Points or concealed it. In determining priority of invention under this subsection, there shall be considered not only the respective dates of conception and reduction to practice of the invention, but also the reasonable diligence of one who was first to conceive and last to reduce to practice, from a time prior to conception by the other.45

IX. Practice Points A. The On-Sale Novelty Bar of Section 102(b) Must Be Established by a Two-Point Test In order to anticipate under the on sale novelty bar of Section 102(b), the following two-point test must be met: 1. the product must be the subject of a commercial offer for sale; and 2. the invention must be “ready for patenting.” A “commercial offer for sale” requires an offer that is sufficient for the other party to make into a binding contract by accepting it. An invention is “ready for patenting” under the two-point test when it has been reduced to practice or where it has been described (e.g., in drawings) sufficiently specific to enable a person skilled in the relevant art to practice the invention.

B. The Experimental Use Negation Experimental use involves testing of noncommercial embodiments of an invention during the course of perfecting an invention. Experimental use operates to negate prior art under Section 102, such as the on-sale and public-use novelty bars of Section 102(b).

C. Public Use Under Section 102(b) Public use under Section 102(b) includes any use of the claimed invention by a person other than the inventor who is under no limitation, restriction, or obligation of secrecy to the inventor.

45. 35 U.S.C.S. § 102(g) (2009).

293


D. Patenting Abroad (Section 102(d)) Requires Issuance of a Patent, but Does Not Require That the Anticipating Subject Matter Be Claimed in a Patent, or that the Patent Be Publically Accessible Under Section 102(d), the so-called “foreign patenting” novelty bar, a nonU.S. patent must issue. A non-U.S. application that does not issue as a nonU.S. patent is not a novelty bar under Section 102(d). However, the issued non-U.S. patent need not be publically accessible, and the non-U.S. patent is anticipatory for all enabled subject matter disclosed in the patent, not merely the claimed subject matter.

E. Derivation Under Section 102(f) Requires Proof of Both Prior Conception by a Person Other than the Inventor and Communication of That Conception to the Inventor Proving derivation under Section 102(f) requires proving conception by a person other than the inventor and communication of that conception to the inventor.

F. Use Caution in Evaluating and Opining on Parts of Section 102 That Require Proof of Invention (i.e., Sections 102(a), (e), and (g)) Sections 102(a), (e), and (g) are rarely used in evaluations and opinions of invalidity of U.S. patents, especially third party patents. Proving anticipation under these sections requires fact-specific proof of invention that is often not available, or is not of sufficient certainty to form the basis for an opinion.

G. Be Aware of Other Forms of Anticipation When evaluating or opining on validity of U.S. patents, be aware of all forms of anticipation under Section 102 of the U.S. Patent Statute (35 U.S.C. § 102). In addition to those discussed in detail in this chapter and in Chapter 6, Section 102 provides additional forms of anticipation. While these forms of anticipation are rarely used in evaluations and opinions, nonetheless, they should always be considered when evaluating or opining on patent validity.

CHAP T ER

8 Patent Law Principle III: Validity Obviousness

I. Overview of Obviousness and Anticipation

298

II. Section 103(a) (35 U.S.C. § 103(a))

299

A. The History of 35 U.S.C. § 103(a)

299

B. 35 U.S.C. § 103(a)

299

C. U.S. Courts’ Interpretation of 35 U.S.C. § 103(a)

300

III. An Obviousness Analysis Requires a Comparison of the Construed Claims with the Prior Art

301

IV. The Graham Factors

301

V. Prior Art Under Section 103

302

A. Section 102 Prior Art That May Be Used for Obviousness

302

B. Analogous Art Requirement

305

C. An Obviousness Reference Is Prior Art for All That It Discloses; Enablement Is Not Required

307

VI. “The Difference Between the Prior Art and the Claims”

307

A. Motivation to Combine References—The TSM Test and the Supreme Court’s KSR Decision

308

1. The Teaching, Suggestion, Motivation Test (TSM Test) and KSR

308

B. Obviousness as Explained by KSR

310

C. Obvious to Try—Reasonable Expectation of Success

311

1. KSR and the “Obvious to Try—Reasonable Expectation of Success” Test

311

2. Federal Circuit Cases Post-KSR on the “Obvious to Try—Reasonable Expectation of Success” Test

313

D. Teaching Away—Unexpected Success

317

E. Statements by the Patentee About the Prior Art

318

295

296 Chapter 8 Patent Law Principle III: Validity VII. “Level of Ordinary Skill in the Pertinent Art”

320

A. Factors to Be Considered in Determining the Level of Ordinary Skill in the Art

320

B. Application of the Factors in Determining the Level of Ordinary Skill in the Art

320

C. One of Ordinary Skill in the Art Is an Objective Fiction

322

VIII. Objective Evidence of Nonobviousness: Secondary Considerations

323

A. There Must Be a Nexus Between the Secondary Considerations and the Claimed Invention

323

B. Even the Strongest Evidence of Secondary Considerations May Not Overcome a Strong Obviousness Position

325

C. Examples of Secondary Considerations 1. Commercial Success

326 326

2. Unexpected Results

328

3. Failure of Others—Resolution of Long-Felt Need

329

4. Copying by Others

330

IX. Section 103(c): Commonly Owned Prior Art and Patent or Patent Application X. Special Rules for Obviousness A. Means-Plus-Function Claims

331 332 332

1. Determination of a Means-Plus-Function Claim

333

2. Construing Means-Plus-Function Claims for Determining Obviousness

333

a) Function

334

b) Structure

334

3. Determining Obviousness of Means-Plus-Function Claims B. Product-by-Process Claims

335 335

1. Definition of a Product-by-Process Claim

335

2. Construing Product-by-Process Claims for Determining Obviousness

336

XI. Practice Points

337


337

B. Obviousness Applies Whenever There Is No Anticipation

338

Patent Law Principle III: Validity C. The Graham Factors

338

D. Prior Art Used For Obviousness Must Qualify as Prior Art Under Section 102

338

E. Prior Art That Qualifies Only Under Sections 102(e), (g), or (f) Is Not Prior Art Under Section 103 Where the Art and the Patent Being Analyzed Were Owned by the Same Person at the Time the Invention Was Made

339

F. Prior Art Must Be Analogous Prior Art to Be Combined for Section 103

339

G. Prior Art Need Not Be Enabled for Section 103: It Is Art for All It Discloses

339

H. The Teaching, Suggestion, Motivation Test (TSM Test) for Combining Prior Art for Section 103 Is but One of Many Tests; There Is No Requirement for Prior Art to Provide an Explicit Teaching, Suggestion, or Motivation to Combine

339

I. Prior Art References May Be Combined for Section 103 on the Basis of Obvious to Try or a Reasonable Expectation of Success

340

J. Teaching Away—Unexpected Success

340

K. Statements by the Patentee About Prior Art Are Binding on the Patentee for Purposes of Obviousness

340

L. For Determining Obviousness, Courts Must Define the Level of Ordinary Skill in the Pertinent Art

340

M. One of Ordinary Skill in the Pertinent Art Is an Objective Fiction; the Actual Inventor’s Skill or Expectations Play No Part in an Obviousness Inquiry

341

N. A Court Must Consider Evidence of Nonobviousness, but a Strong Position of Obviousness May Not Be Overcome by Any Level of Such Evidence

341

O. There Must Be a Nexus between Evidence of Nonobviousness and the Claimed Invention

341

P. Be Aware of Special Rules for Means-Plus-Function Claims

341

Q. Obviousness of Product-by-Process Claims Is Based Solely on the Product, Not the Process

342

297


Usage Note: This chapter covers invalidity based on obviousness under 35 U.S.C. § 103. Prior art for determining obviousness must be prior art under Section 102. Therefore, Chapter 6 (printed publication prior art under Section 102(b)) and Chapter 7 (other forms of prior art under Section 102) are particularly relevant to this chapter. Chapter 2 (claim construction) is also especially relevant to this chapter.

I. Overview of Obviousness and Anticipation Anticipation (as discussed in Chapters 6 and 7) requires that a single prior art reference or event defined under Section 102 (35 U.S.C. § 102)1 disclose every limitation of a claim. Where there is any variance between the disclosure of a prior art reference and a claim, the claim cannot be anticipated.2 As explained by the Federal Circuit: “[D]ifferences between the prior art reference and a claimed invention, however slight, invoke the question of obviousness, not anticipation. See 35 U.S.C. § 103(a).”3 The U.S. Supreme Court described unpatentability due to obviousness under Section 103 of the U.S. Patent Statute (35 U.S.C. § 103)4 as follows: Section 103 forbids issuance of a patent when “the differences between the subject matter sought to be patented and the prior art are such that the subject matter as a whole would have been obvious at the time the invention was made to a person having ordinary skill in the art to which said subject matter pertains.”5

Because issued U.S. patents have been examined by the U.S. Patent Office for patentability and validity, there is a legal presumption that the claims of an issued U.S. patent are valid.6 As explained by the Federal Circuit: “[A]n issued patent enjoys a presumption of validity. Thus, a party challenging patent validity has the burden to prove its case with clear and convincing evidence.”7 Invalidity must be determined on a claim-by-claim basis, and finding one claim of a patent to be invalid has no effect on the other clams8 as “all claims are ‘presumed valid independently of the validity of the other claims.’”9

1. 2. 3. 4. 5. 6. 7. 8. 9.

35 U.S.C.S. § 102 (2009). E.g., Net Moneyin, Inc. v. Verisign, Inc., 545 F.3d 1359, 1371 (Fed. Cir. 2008). Id. 35 U.S.C.S. § 103 (2009). KSR Int’l Co. v. Teleflex Inc., 550 U.S. 398, 406 (2007) (quoting Graham v. John Deere Co. of Kansas City, 383 U.S. 1, 17–18 (1966)); Voda v. Cordis Corp., 536 F.3d 1311, 1323–1324 (Fed. Cir. 2008). 35 U.S.C.S. § 282 (2009). Impax Labs., Inc. v. Aventis Pharms. Inc., 545 F.3d 1312, 1314 (Fed. Cir. 2008). 35 U.S.C.S. § 282 (2009). Sandt Tech., Ltd. v. Resco Metal & Plastics Corp., 264 F.3d 1344, 1356 (Fed. Cir. 2001) (quoting 35 U.S.C. § 282).

Section 103(a) (35 U.S.C. § 103(a)) 299

II. Section 103(a) (35 U.S.C. § 103(a)) A. The History of 35 U.S.C. § 103(a) The U.S. Supreme Court has explained that the obviousness section of the U.S. Patent Code (35 U.S.C. § 103) is “based on the logic of the earlier decision in Hotchkiss v. Greenwood, 52 U.S. 248 (1851), and its progeny.”10 According to the Court in its landmark Graham v. John Deere obviousness decision: Section 103, for the first time in our statute, provides a condition which exists in the law and has existed for more than 100 years, but only by reason of decisions of the courts. An invention which has been made, and which is new in the sense that the same thing has not been made before, may still not be patentable if the difference between the new thing and what was known before is not considered sufficiently great to warrant a patent. That has been expressed in a large variety of ways in decisions of the courts and in writings. Section 103[(a)] states this requirement in the title. It refers to the difference between the subject matter sought to be patented and the prior art, meaning what was known before as described in section 102. If this difference is such that the subject matter as a whole would have been obvious at the time to a person skilled in the art, then the subject matter cannot be patented.11

B. 35 U.S.C. § 103(a) Specifically, Section 103(a)12 provides: A patent may not be obtained though the invention is not identically disclosed or described as set forth in section 102 of this title [35 USCS § 102], if the differences between the subject matter sought to be patented and the prior art are such that the subject matter as a whole would have been obvious at the time the invention was made to a person having ordinary skill in the art to which said subject matter pertains. Patentability shall not be negatived by the manner in which the invention was made.13

10. KSR, 550 U.S. at 406. 11. Graham v. John Deere Co. of Kan. City, 383 U.S. 1, 14–15 (1966) (internal quotation marks and citation omitted). 12. 35 U.S.C. § 103 has three subparts: Sections 103(a), (b), (c). 35 U.S.C.S. § 103 (2009). However, for most purposes, Section 103(a) is the relevant part for determining obviousness. Section 103(b) pertains to determining obviousness of certain biotechnological processes, and Section 103(c) pertains to inventorship and the relationship between Section 103 and Sections 102(e), (f), and (g). Section 103(c) is discussed below. 13. 35 U.S.C.S. § 103(a) (2009).

300


C. U.S. Courts’ Interpretation of 35 U.S.C. § 103(a) In its KSR decision, the U.S. Supreme Court instructed courts on how to interpret Section 103(a): In Graham v. John Deere Co. of Kansas City, 383 U.S. 1, 86 S. Ct. 684, 15 L. Ed. 2d 545 (1966), the Court set out a framework for applying the statutory language of § 103, language itself based on the logic of the earlier decision in Hotchkiss v. Greenwood, 52 U.S. 248 (1851), and its progeny. See 383 U.S., at 15–17. The analysis is objective: “Under § 103, the scope and content of the prior art are to be determined; differences between the prior art and the claims at issue are to be ascertained; and the level of ordinary skill in the pertinent art resolved. Against this background, the obviousness or nonobviousness of the subject matter is determined. Such secondary considerations as commercial success, long felt but unsolved needs, failure of others, etc., might be utilized to give light to the circumstances surrounding the origin of the subject matter sought to be patented.” Id., at 17–18. While the sequence of these questions might be reordered in any particular case, the factors continue to define the inquiry that controls. If a court, or patent examiner, conducts this analysis and concludes the claimed subject matter was obvious, the claim is invalid under § 103.14

As explained by the Federal Circuit: A claim can be obvious even where all of the claimed features are not found in specific prior art references, where “there is a showing of a suggestion or motivation to modify the teachings of [the prior art] to the claimed invention.” Neurosciences, Inc. v. Cadus Pharm. Corp., 225 F.3d 1349, 1356 (Fed. Cir. 2000) (concluding that patent would have been obvious in light of teachings in prior art which provided motivation and suggestion to modify existing techniques to arrive at method in question). n8. “A suggestion, teaching, or motivation to combine the relevant prior art teachings does not have to be found explicitly in the prior art, as ‘the teaching, motivation, or suggestion may be implicit from the prior art as a whole, rather than expressly stated in the references. . . . The test for an implicit showing is what the combined teachings, knowledge of one of ordinary skill in the art, and the nature of the problem to be solved as a whole would have suggested to those of ordinary skill in the art.’ ” In re Kahn, 441 F.3d 977, 987–88 (Fed. Cir. 2006) (quoting In re Kotzab, 217 F.3d 1365, 1370 (Fed. Cir. 2000)). n9. n8 See also Merck & Co. v. Teva Pharms. USA, Inc., 395 F.3d 1364, 1375 (Fed. Cir. 2005); Valmet Paper Mach., Inc. v. Beloit Corp., 105 F.3d 1409, 1413 (Fed.

14. KSR, 550 U.S. at 406–07.

The Graham Factors Cir.1997) (concluding, without relying on a specific reference, that it would have been obvious to a person of ordinary skill in the art to modify a prior art reference to meet a limitation of a claim); B.F. Goodrich Co. v. Aircraft Braking Sys. Corp., 72 F.3d 1577, 1582 (Fed. Cir. 1996); In re O’Farrell, 853 F.2d 894, 902 (Fed. Cir. 1988). n9 See also Brown & Williamson Tobacco Corp. v. Philip Morris Inc., 229 F.3d 1120, 1125 (Fed. Cir. 2000) (stating that evidence of a motivation to combine prior art references” may flow from the prior art references themselves, the knowledge of one of ordinary skill in the art, or, in some cases, from the nature of the problem to be solved”).15

III. An Obviousness Analysis Requires a Comparison of the Construed Claims with the Prior Art In keeping with the primacy of claims and claim construction (as emphasized throughout this treatise and as covered in detail in Chapter 2), claim construction is required for every evaluation or opinion of a U.S. patent or patent application that in any manner involves the patent’s claims. Thus, as obviousness involves a determination of whether a patent’s claims are invalid for being obvious over the prior art, analyses of obviousness necessarily require claim construction. For example, the Federal Circuit has instructed: The proper approach to the obviousness issue must start with the claimed invention as a whole. 35 USC § 103. . . . What must be found obvious to defeat the patent is the claimed combination. The court appears not to have considered that precise question. Regardless of how patent claims may be arrived at during the vicissitudes of prosecution, the invention patented is no more and no less than what the finally issued claims, as construed by the court[.]16

IV. The Graham Factors In Graham v. John Deere, the U.S. Supreme Court described four “basic factual inquires” that must be made in determining whether a claimed invention is obvious: 1. “the scope and content of the prior art”; 2. the “differences between the prior art and the claims”;

15. Ormco Corp. v. Align Tech., Inc., 463 F.3d 1299, 1307–1308 (Fed. Cir. 2006). 16. E.g., Kimberly-Clark Corp. v. Johnson & Johnson, 745 F.2d 1437, 1448–49 (Fed. Cir. 1984).

301

302


3. “the level of ordinary skill in the pertinent art”; and 4. objective evidence of nonobviousness.17 These so-called “Graham factors” have been adopted by both the U.S. Supreme Court and the Federal Circuit as the standard for determining obviousness.18

V. Prior Art Under Section 103 A. Section 102 Prior Art That May Be Used for Obviousness Section 103(a) indicates that the prior art to be used for purposes of obviousness under Section 103 is the prior art defined in Section 102 (35 U.S.C. § 102): A patent may not be obtained though the invention is not identically disclosed or described as set forth in section 102 of this title [35 USCS § 102], if the differences between the subject matter sought to be patented and the prior art are such that the subject matter as a whole would have been obvious. . . .”19

The Federal Circuit has held that for purposes of determining obviousness, prior art under Section 102 must be either publically accessible or known to the inventor. For example, the court has stated: [Prior a]rt that is not accessible to the public is generally not recognized as prior art [for purposes of Section 103]. See Minn. Mining & Mfg. Co. v. Chemque, Inc., 303 F.3d 1294, 1301 (Fed. Cir. 2002); OddzOn Prods.,Inc. v. Just Toys, Inc., 122 F.3d 1396, 1402 (Fed. Cir. 1997) Prods.,Inc. v. Just Toys, Inc., 122 F.3d 1396, 1402 (Fed. Cir. 1997).20

Therefore, “[t]he prior art being referred to in [Section 103(a)] arguably include[s] only public prior art defined in subsections 102(a), (b), (e), and (g).”21

17. Graham, 383 U.S. at 17–18. 18. E.g., KSR Int’l Co. v. Teleflex Inc., 550 U.S. 398, 406 (2007) (“In Graham v. John Deere . . . the Court set our a framework[, the Graham factors,] for applying the statutory language of § 103. . . . The [Graham factor] analysis is objective[.]”); Takeda Chem. Indus. v. Alphapharm Pty., Ltd., 492 F.3d 1350, 1355 (Fed. Cir. 2007) (“The [KSR Supreme] Court stated that the Graham v. John Deere Co. of Kansas City, 383 U.S. 1 (1966), factors still control an obviousness inquiry. Those factors are. . . .”). 19. 35 U.S.C.S. § 103(a) (2009) (emphasis added). 20. Ormco, 463 F.3d at 1305. 21. OddzOn Prods. v. Just Toys, 122 F.3d 1396, 1403 (Fed. Cir. 1997).

Prior Art Under Section 103 303

However, the Federal Circuit has also held that non-publically accessible prior art under Section 102(f) also qualifies as prior art for determining obviousness under Section 103 if the inventor knew of the art.22 Thus, in such a case, the non-publically accessible—but personally known prior art—may be combined with other applicable prior art under Section 102 for asserting obviousness under Section 103. The Federal Circuit noted: In In re Bass, 474 F.2d 1276, 1290 (CCPA 1973), the principal opinion of the Court of Customs and Patent Appeals held that a prior invention of another that was not abandoned, suppressed, or concealed (102(g) prior art) could be combined with other prior art to support rejection of a claim for obviousness under § 103. The principal opinion noted that the provisions of § 102 deal with two types of issues, those of novelty and loss-of-right. It explained: “Three of [the subsections,] (a), (e), and (g), deal with events prior to applicant’s invention date and the other, (b), with events more than one year prior to the U.S. application date. These are the ‘prior art’ subsections.” Id. (emphasis in original). The principal opinion added, in dictum (§ 102(f) not being at issue), that “of course, (c), (d), and (f) have no relation to § 103 and no relevancy to what is ‘prior art’ under § 103.” Id. There is substantial logic to that conclusion. After all, the other prior art provisions all relate to subject matter that is, or eventually becomes, public. Even the “secret prior art” of § 102(e) is ultimately public in the form of an issued patent before it attains prior art status. Thus, the patent laws have not generally recognized as prior art that which is not accessible to the public. It has been a basic principle of patent law, subject to minor exceptions, that prior art is: technology already available to the public. It is available, in legal theory at least, when it is described in the world’s accessible literature, including patents, or has been publicly known or in . . . public use or on sale “in this country.” That is the real meaning of “prior art” in legal theory—it is knowledge that is available, including what would be obvious from it, at a given time, to a person of ordinary skill in the art. Kimberly-Clark Corp. v. Johnson & Johnson, 745 F.2d 1437, 1453 (Fed. Cir. 1984) (citations omitted). Moreover, as between an earlier inventor who has not given the public the benefit of the invention, e.g., because the invention has been abandoned without public disclosure, suppressed, or concealed, and a subsequent inventor who obtains a patent, the policy of the law is for the subsequent inventor to prevail. See W.L. Gore & Assocs., Inc. v. Garlock, Inc., 721 F.2d 1540, 1550 (Fed. Cir. 1983) (“Early public disclosure is a linchpin of the patent system. As between a prior inventor [who does not disclose] and a later inventor who promptly files a

22. Id. at 1396.

304

Chapter 8 Patent Law Principle III: Validity patent application . . . , the law favors the latter.”). Likewise, when the possessor of secret art (art that has been abandoned, suppressed, or concealed) that predates the critical date is faced with a later-filed patent, the later-filed patent should not be invalidated in the face of this “prior” art, which has not been made available to the public. Thus, prior, but non-public, inventors yield to later inventors who utilize the patent system. However, a change occurred in the law after Bass was decided. At the time Bass was decided, § 103 read as follows: A patent may not be obtained though the invention is not identically disclosed or described as set forth in section 102 of this title, if the differences between the subject matter sought to be patented and the prior art are such that the subject matter as a whole would have been obvious at the time the invention was made to a person having ordinary skill in the art to which said subject matter pertains. Patentability shall not be negatived by the manner in which the invention was made. 35 U.S.C. § 103. The prior art being referred to in that provision arguably included only public prior art defined in subsections 102(a), (b), (e), and (g). In 1984, Congress amended § 103, adding the following paragraph: Subject matter developed by another person, which qualifies as prior art only under subsection (f) or (g) of section 102 of this title, shall not preclude patentability under this section where the subject matter and the claimed invention were, at the time the invention was made, owned by the same person or subject to an obligation of assignment to the same person. 35 U.S.C. § 103 (now § 103(c)) (emphasis added). It is historically very clear that this provision was intended to avoid the invalidation of patents under § 103 on the basis of the work of fellow employees engaged in team research. See Sectionby-Section Analysis: Patent Law Amendments Act of 1984, 130 Cong. Rec. 28069, 28071 (Oct. 1, 1984), reprinted in 1984 U.S.C.C.A.N. 5827, 5833 (stating that the amendment, which encourages communication among members of research teams, was a response to Bass and In re Clemens, 622 F.2d 1029 (CCPA 1980), in which “an earlier invention which is not public may be treated under Section 102(g), and possibly under 102(f), as prior art”). There was no clearly apparent purpose in Congress’s inclusion of § 102(f) in the amendment other than an attempt to ameliorate the problems of patenting the results of team research. However, the language appears in the statute; it was enacted by Congress. We must give effect to it. The statutory language provides a clear statement that subject matter that qualifies as prior art under subsection (f) or (g) cannot be combined with other prior art to render a claimed invention obvious and hence unpatentable when the relevant prior art is commonly owned with the claimed invention at the time the invention was made. While the statute does not expressly state in so many words that § 102(f) creates a type of prior art for purposes of § 103,

Prior Art Under Section 103 305 nonetheless that conclusion is inescapable; the language that states that § 102(f) subject matter is not prior art under limited circumstances clearly implies that it is prior art otherwise. That is what Congress wrote into law in 1984 and that is the way we must read the statute. This result is not illogical. It means that an invention, A,’ that is obvious in view of subject matter A, derived from another, is also unpatentable. The obvious invention, A,’ may not be unpatentable to the inventor of A, and it may not be unpatentable to a third party who did not receive the disclosure of A, but it is unpatentable to the party who did receive the disclosure. The PTO’s regulations also adopt this interpretation of the statute. 37 C.F.R. § 1.106(d) (1996) (“Subject matter which is developed by another person which qualifies as prior art only under 35 U.S.C. § 102(f) or (g) may be used as prior art under 35 U.S.C. § 103.”). Although the PTO’s interpretation of this statute is not conclusive, we agree with the district court that it is a reasonable interpretation of the statute. It is sometimes more important that a close question be settled one way or another than which way it is settled. We settle the issue here (subject of course to any later intervention by Congress or review by the Supreme Court), and do so in a manner that best comports with the voice of Congress. Thus, while there is a basis for an opposite conclusion, principally based on the fact that § 102(f) does not refer to public activity, as do the other provisions that clearly define prior art, nonetheless we cannot escape the import of the 1984 amendment. We therefore hold that subject matter derived from another not only is itself unpatentable to the party who derived it under § 102(f), but, when combined with other prior art, may make a resulting obvious invention unpatentable to that party under a combination of §§ 102(f) and 103. Accordingly, the district court did not err by considering the two design disclosures known to the inventor to be prior art under the combination of §§ 102(f) and 103.23

B. Analogous Art Requirement While not statutorily mandated in Section 103, U.S. courts have imposed a requirement that prior art references must be “analogous” in order to be combined to make an obviousness position. As described by the Federal Circuit in In re Clay: Although § 103 does not, by its terms, define the “art to which [the] subject matter [sought to be patented] pertains,” this determination is frequently couched in terms of whether the art is analogous or not, i.e., whether the art is “too remote to be treated as prior art.” In re Sovish, 769 F.2d 738, 741 (Fed. Cir. 1985). . . .

23. Id. at 1402–04 (emphasis in original and added).

306

Chapter 8 Patent Law Principle III: Validity Two criteria have evolved for determining whether prior art is analogous: (1) whether the art is from the same field of endeavor, regardless of the problem addressed, and (2) if the reference is not within the field of the inventor’s endeavor, whether the reference still is reasonably pertinent to the particular problem with which the inventor is involved. In re Deminski, 796 F.2d 436, 442 (Fed. Cir. 1986); In re Wood, 599 F.2d 1032, 1036 (CCPA 1979).24

In the Icon Health & Fitness case, the Federal Circuit explained: If reasonably pertinent to the problem addressed by [the inventor], [a prior art reference] may serve as analogous art. Paulsen, 30 F.3d at 1481. “A reference is reasonably pertinent if, even though it may be in a different field from that of the inventor’s endeavor, it is one which, because of the matter with which it deals, logically would have commended itself to an inventor’s attention in considering his problem.” In re Clay, 966 F.2d 656, 659 (Fed. Cir. 1992). In other words, “familiar items may have obvious uses beyond their primary purposes.” KSR Int’l Co. v. Teleflex, Inc., 127 S. Ct. 1727, 1742, 167 L. Ed. 2d 705 (2007). We therefore have concluded, for example, that an inventor considering a hinge and latch mechanism for portable computers would naturally look to references employing other “housings, hinges, latches, springs, etc.,” which in that case came from areas such as “a desktop telephone directory, a piano lid, a kitchen cabinet, a washing machine cabinet, a wooden furniture cabinet, or a two-part housing for storing audio cassettes.” Paulsen, 30 F.3d at 1481–82. [The] invention provides a treadmill with a folding mechanism and a means for retaining that mechanism in the folded position. The application specifically discusses the gas spring as part of a “lift assistance assembly . . . to apply a force or torque urging the tread base” towards the closed position. Nothing about [the] folding mechanism requires any particular focus on treadmills; it generally addresses problems of supporting the weight of such a mechanism and providing a stable resting position. Analogous art to [the patent] application, when considering the folding mechanism and gas spring limitation, may come from any area describing hinges, springs, latches, counterweights, or other similar mechanisms—such as the folding bed in Teague. Accordingly, we conclude that substantial evidence supports the Board’s finding that Teague provides analogous art.25

24. In re Clay, 966 F.2d 656, 658–59 (Fed. Cir. 1992) (bracketing in original, emphasis added). 25. In re Icon Health & Fitness, Inc., 496 F.3d 1374, 1379–80 (Fed. Cir. 2007).

“The Difference Between the Prior Art and the Claims” 307

C. An Obviousness Reference Is Prior Art for All That It Discloses; Enablement Is Not Required Unlike anticipation, in which prior art must enable in order to anticipate,26 there is no enablement requirement for prior art under Section 103 obviousness.27 For obviousness purposes, a prior art reference is art for everything it discloses: While a reference must enable someone to practice the invention in order to anticipate under § 102(b), a non-enabling reference may qualify as prior art for the purpose of determining obviousness under § 103. Reading & Bates Constr. Co. v. Baker Energy Resources Corp., 748 F.2d 645, 652 (Fed. Cir. 1984) (reference that lacks enabling disclosure is not anticipating, but “itself may qualify as a prior art reference under § 103, but only for what is disclosed in it” (emphasis in original)); see Beckman Instruments, Inc. v. LKB Produkter AB, 892 F.2d 1547, 1551 (Fed. Cir. 1989) (“even if a reference discloses an inoperative device, it is prior art for all that it teaches”).28

VI. “The Difference Between the Prior Art and the Claims” “[T]he difference between the prior art and the claims,” the second Graham factor, encompasses the heart of analyses and determinations of obviousness. It is this part of the Graham factors under which an evaluation occurs as to whether one of ordinary skill in the art would have found it obvious to combine various prior art references to arrive at the claimed subject matter, with or without the input of additional subject matter known to one of skill in the art. It is this issue that the U.S. Supreme Court addressed in its landmark case KSR.29

26. See Chapters 6 and 7. 27. E.g., Amgen Inc. v. Hoechst Marion Roussel, 314 F.3d 1313, 1357 (Fed. Cir. 2003); Symbol Tech., Inc. v. Opticon, Inc., 935 F.2d 1569, 1578 (Fed. Cir. 1991). 28. Symbol Tech, 935 F.2d at 1578 (emphasis in original); Amgen, 314 F.3d at 1357 (“Under § 103, however, a reference need not be enabled; it qualifies as a prior art, regardless, for whatever is disclosed therein.”). 29. KSR Int’l Co. v. Teleflex Inc., 550 U.S. 398 (2007).


A. Motivation to Combine References—The TSM Test and the Supreme Court’s KSR Decision An invention is obvious if one of skill in the art would find it obvious: (a) based on a single prior art reference or event under Section 102, combined with the common knowledge or the nature of the problem as viewed through the eyes of an ordinary artisan; or (b) based on a combination of prior art references or events under Section 102, combined with the common knowledge or the nature of the problem, as viewed through the eyes of an ordinary artisan.30 Most obviousness determinations are based on a combination of at least two prior art references or events. A claim is invalid where a combination of references, combined with the common knowledge or the nature of the problem as viewed through the eyes of an ordinary artisan, discloses every limitation of a claim.31 In determining validity under obviousness under Section 103, courts have heavily emphasized determining whether it would have been obvious to one of ordinary skill in the art to combine prior art references so as to render a claim obvious. 1. The Teaching, Suggestion, Motivation Test (TSM Test) and KSR As discussed above, one of the limitations on combining references is whether the references are analogous art.32 Federal Circuit case law holds that generally it is not obvious to combine references from non-analogous arts.33 In somewhat the same fashion as the non-analogous art rule applies to determinations of the obviousness of combining references, the Federal Circuit developed the so-called “ ‘teaching, suggestion, or motivation’ test (TSM test)” as a another rule for determining obviousness.34 Under the TSM test, “[a] patent claim is only proved obvious if ‘some motivation or suggestion to combine the prior art teachings’ can be found in the prior art, the nature of the problem, or the knowledge of a person having ordinary skill in the art.”35 However, the U.S. Supreme Court in KSR found that the TSM test as applied by the Federal Circuit was overly rigid because the court required actual documentation of a teaching, suggestion, or motivation to combine references in order to prove obviousness under Section 103.36 The Court found that rigid application of the TSM test could make it overly difficult

30. Id. at 416. 31. Id. at 406. 32. In re Icon Health & Fitness, Inc., 496 F.3d 1374, 1379–80 (Fed. Cir. 2007); In re Clay, 966 F.2d 656, 658–59 (Fed. Cir. 1992). 33. Icon, 496 F.3d at 1379–80; Clay, 966 F.2d at 658–59. 34. KSR, 550 U.S. at 407. 35. Id. 36. Id. at 418.


prove obviousness because: “In many fields it may be that there is little discussion of obvious techniques or combinations, and it often may be the case that market demand, rather than scientific literature, will drive design trends.”37 Thus, the Supreme Court rejected the Federal Circuit’s application of the TSM test for being to rigid and for not following the Court’s “expansive and flexible approach” to determining obviousness.38 The Court emphasized that the rigidity of the TSM test was inconsistent with the Court’s precedence, including Graham which “reaffirmed the ‘functional approach’” to determining obviousness.39 The Court emphasized: As our precedents make clear, however, the [obviousness] analysis need not seek out precise teachings directed to the specific subject matter of the challenged claim, for a court can take account of the inferences and creative steps that a person of ordinary skill in the art would employ. . . . Although common sense directs one to look with care at a patent application that claims as innovation the combination of two known devices according to their established functions, it can be important to identify a reason that would have prompted a person of ordinary skill in the relevant field to combine the elements in the way the claimed new invention does. This is so because inventions in most, if not all, instances rely upon building blocks long since uncovered, and claimed discoveries almost of necessity will be combinations of what, in some sense, is already known.40

Referring to the TSM test as a means of providing “helpful insight” into determining obviousness, the Court noted: Helpful insights, however, need not become rigid and mandatory formulas; and when it is so applied, the TSM test is incompatible with our precedents. The obviousness analysis cannot be confined by a formalistic conception of the words teaching, suggestion, and motivation, or by overemphasis on the importance of published articles and the explicit content of issued patents. The diversity of inventive pursuits and of modern technology counsels against limiting the analysis in this way. In many fields it may be that there is little discussion of obvious techniques or combinations, and it often may be the case that market demand, rather than scientific literature, will drive design trends. Granting patent protection to advances that would occur in the ordinary course without real innovation retards progress and may, in the case of patents combining previously known elements, deprive prior inventions of their value or utility.

37. 38. 39. 40.

Id. at 419. Id. at 415. Id. Id. at 418–19.

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Chapter 8 Patent Law Principle III: Validity In the years since the Court of Customs and Patent Appeals set forth the essence of the TSM test, the Court of Appeals no doubt has applied the test in accord with these principles in many cases. There is no necessary inconsistency between the idea underlying the TSM test and the Graham analysis. But when a court transforms the general principle into a rigid rule that limits the obviousness inquiry, as the Court of Appeals did here, it errs.41

B. Obviousness as Explained by KSR After rejecting the Federal Circuit’s strict application of the TSM test for being too rigid, the Supreme Court discussed its view of determining obviousness under the Court’s precedence of applying an “expansive and flexible approach” to determining obviousness under Section 103. The Court explained: We build and create by bringing to the tangible and palpable reality around us new works based on instinct, simple logic, ordinary inferences, extraordinary ideas, and sometimes even genius. These advances, once part of our shared knowledge, define a new threshold from which innovation starts once more. And as progress beginning from higher levels of achievement is expected in the normal course, the results of ordinary innovation are not the subject of exclusive rights under the patent laws. Were it otherwise patents might stifle, rather than promote, the progress of useful arts. See U.S. Const., Art. I, § 8, cl. 8. These premises led to the bar on patents claiming obvious subject matter established in Hotchkiss and codified in § 103. Application of the bar must not be confined within a test or formulation too constrained to serve its purpose.42

The Court further stated: Neither the enactment of § 103 nor the analysis in Graham disturbed this Court’s earlier instructions concerning the need for caution in granting a patent based on the combination of elements found in the prior art. For over a half century, the Court has held that a “patent for a combination which only unites old elements with no change in their respective functions . . . obviously withdraws what already is known into the field of its monopoly and diminishes the resources available to skillful men.” Great Atlantic & Pacific Tea Co. v. Supermarket Equipment Corp., 340 U.S. 147, 152–153, 71 S. Ct. 127, 95 L. Ed. 162 (1950). This is a principal reason for declining to allow patents for what is obvious. The combination of familiar elements according to known methods is likely to be obvious when it does no more than yield predictable results.43

41. Id. at 419. 42. Id. at 427. 43. Id. at 415–16.


The KSR Court explained that there are “[t]hree cases decided after Graham [that] illustrate the application of [the Court’s obviousness] doctrine:” In United States v. Adams . . . [t]he Court recognized that when a patent claims a structure already known in the prior art that is altered by the mere substitution of one element for another known in the field, the combination must do more than yield a predictable result. . . . In Anderson’s-Black Rock, Inc. v. Pavement Salvage Co., . . . [t]he two [preexisting] in combination did no more than they would in separate, sequential operation. . . . [I]n Sakraida v. AG Pro, Inc., . . . the Court derived . . . the conclusion that when a patent “simply arranges old elements with each performing the same function it had been known to perform” and yields no more than one would expect from such an arrangement, the combination is obvious.44,45

The Court further stated: When a work is available in one field of endeavor, design incentives and other market forces can prompt variations of it, either in the same field or a different one. If a person of ordinary skill can implement a predictable variation, § 103 likely bars its patentability. For the same reason, if a technique has been used to improve one device, and a person of ordinary skill in the art would recognize that it would improve similar devices in the same way, using the technique is obvious unless its actual application is beyond his or her skill.46

Thus, under KSR, when considering obviousness of a combination of known elements, the operative question is “whether the improvement is more than the predictable use of prior art elements according to their established functions.”47

C. Obvious to Try—Reasonable Expectation of Success 1. KSR and the “Obvious to Try—Reasonable Expectation of Success” Test In addition to addressing the TSM test, in KSR the U.S. Supreme Court also addressed the “obvious to try—reasonable expectation of success”48 test for

44. 45. 46. 47. 48.

Id. at 416. Id. at 416–17 (internal quotations omitted). Id. at 417. Id. The Federal Circuit refers to the “obvious to try—reasonable expectation of success” test both as a single test and as separate, but intimately related tests. Either way, it is clear from Federal


determining obviousness.49 The original KSR district court case held that a patent’s claims were obvious under Section 103 based on both the TSM test and the “obvious to try—reasonable expectation of success” test.50 However, the Federal Circuit reversed the district court’s holding of obviousness.51 While the Federal Circuit based its reversal “[w]ith principal reliance on the TSM test,” it also ruled on the “obvious to try—reasonable expectation of success” test,52 reversing the district court there as well by holding that “‘[o]bvious to try’ has long been held not to constitute obviousness.”53 The court stated: KSR, in the first instance, failed to make out a prima facie case of obviousness. The only declaration offered by KSR—a declaration by its Vice President of Design Engineering, Larry Willemsen—did not go to the ultimate issue of motivation to combine prior art, i.e. whether one of ordinary skill in the art would have been motivated to attach an electronic control to the support bracket of the assembly disclosed by Asano. Mr. Willemsen did state that an electronic control “could have been” mounted on the support bracket of a pedal assembly. Such testimony is not sufficient to support a finding of obviousness, however. See, e.g., In re Deuel, 51 F.3d 1552, 1559 (Fed. Cir. 1995) (“ ‘Obvious to try’ has long been held not to constitute obviousness.”).54

However, the Supreme Court flatly rejected the Federal Circuit’s contention that “‘obvious to try’ has long been held not to constitute obviousness,” and held that “obvious to try might show that [an invention] was obvious under § 103.”55 More specifically, the KSR Court stated: The same constricted analysis led the Court of Appeals to conclude, in error, that a patent claim cannot be proved obvious merely by showing that the combination of elements was “[o]bvious to try.” Id., at 289 (internal quotation marks omitted). When there is a design need or market pressure to solve a problem and there are a finite number of identified, predictable solutions, a person of ordinary skill has good reason to pursue the known options within his or her technical grasp. If this leads to the anticipated success, it is likely the product not of innovation but

49. 50. 51. 52. 53. 54. 55.

Circuit precedent that when something is “obvious to try,” there is a “reasonable expectation of success”—and vice versa. Thus, if they are not the same test, they are intimately related tests. KSR, 550 U.S. at 414. Id. Id. Id. Teleflex, Inc. v. KSR Int’l Co., 119 Fed. Appx. 282, 289 (Fed. Cir. 2005), rev’d and remanded, KSR Int’l Co. v. Teleflex Inc., 550 U.S. 398 (2007). Id. (citation omitted, emphasis added). KSR, 550 U.S. at 424.

“The Difference Between the Prior Art and the Claims” 313 of ordinary skill and common sense. In that instance the fact that a combination was obvious to try might show that it was obvious under § 103.56

2. Federal Circuit Cases Post-KSR on the “Obvious to Try— Reasonable Expectation of Success” Test Following KSR, in Pharmastem Therapeutics the Federal Circuit addressed the issue of whether a patent’s claims were invalid for being obvious under Section 103 under the “obvious to try—reasonable expectation of success” test.57 The court began: This court’s decision in In re O’Farrell, 853 F.2d 894, 903 (Fed. Cir. 1988), provides useful guidance for determining whether the expectation of success from a particular line of inquiry is great enough to render a resulting invention obvious. The court noted that obviousness “does not require absolute predictability of success. Indeed, for many inventions that seem quite obvious, there is no absolute predictability of success until the invention is reduced to practice.” On the other hand, the court explained, an invention would not be invalid for obviousness if the inventor would have been motivated “to vary all parameters or try each of numerous possible choices until one possibly arrived at a successful result, where the prior art gave either no indication of which parameters were critical or no direction as to which of many possible choices is likely to be successful.” Likewise, an invention would not be deemed obvious if all that was suggested “was to explore a new technology or general approach that seemed to be a promising field of experimentation, where the prior art gave only general guidance as to the particular form of the claimed invention or how to achieve it.”58

Turning to the facts of the case, the Pharmastem court concluded that a reasonable jury could not have concluded that the invention was nonobvious under the “obvious to try—reasonable expectation of success” test.59 The court explained: While the inventors may have proved conclusively what was strongly suspected before—that umbilical cord blood is capable of hematopoietic reconstitution— and while their work may have significantly advanced the state of the science of hematopoietic transplantations by eliminating any doubt as to the presence of stem cells in cord blood, the mouse experiments and the conclusions drawn from them were not inventive in nature. Instead, the inventors merely used

56. 57. 58. 59.

Id. at 423–24 (emphasis added). Pharmastem Therapeutics, Inc. v. Viacell, Inc., 491 F.3d 1342, 1364 (Fed. Cir. 2007). Id. (citations omitted). Id. at 1363.

314 Chapter 8 Patent Law Principle III: Validity routine research methods to prove what was already believed to be the case. Scientific confirmation of what was already believed to be true may be a valuable contribution, but it does not give rise to a patentable invention. See KSR, 127 S. Ct. at 1732 (“Granting patent protection to advances that would occur in the ordinary course without real innovation retards progress. . . .”); Pfizer, Inc. v. Apotex, Inc., 480 F.3d 1348, 1367–69 (Fed. Cir. 2007) (simply because the formation and properties of a new compound must be verified through testing does not mean that the compound satisfies the test for patentability “since the expectation of success need only be reasonable, not absolute”); In re Merck & Co., 800 F.2d 1091, 1097 (Fed. Cir. 1986) (“Obviousness does not require absolute predictability.”). Good science and useful contributions do not necessarily result in patentability.60

In applying the above-defined teaching of O’Farrell to the facts, the Pharmastem court concluded: This case is not one in which “the prior art gave either no indication of which parameters were critical or no direction as to which of many possible choices is likely to be successful,” nor is it one in which the prior art “gave only general guidance as to the particular form of the invention or how to achieve it.” O’Farrell, 853 F.2d at 903. The prior art suggested cryopreserving cord blood from a single infant and transplanting that blood into a patient to achieve hematopoietic reconstitution. PharmaStem does not suggest, and Dr. Bernstein’s testimony did not reveal, that there was an array of possible choices as to how to achieve that objective or that there were problems to be solved in implementing the prior art suggestion that were not adumbrated in the prior art. To the contrary, the joint specification indicates that each step of the cryopreservation and transplantation procedure had been spelled out in the prior art. PharmaStem does not claim that there was anything novel about the method by which it proposed to collect, cryopreserve, and transplant the cord blood. Instead, in responding to the defendants’ obviousness challenge, PharmaStem focuses entirely on the purported novelty of its proof that stem cells are present in fetal blood, a demonstration that Dr. Bernstein testified was necessary to give transplant physicians sufficient confidence in the use of cord blood for hematopoietic reconstitution to try the procedure on humans. As we have explained, however, providing proof sufficient to justify conducting in vivo procedures on humans, while useful, is not a test of patentability. The evidence at trial demonstrated that the patentees did not invent a new procedure or a new composition; instead, they simply provided experimental proof that the cord blood could be

60. Id. at 1363–64 (emphasis added).

“The Difference Between the Prior Art and the Claims” 315 used to effect hematopoietic reconstitution of mice and, by extrapolation, could be expected to work in humans as well.61

In Takeda Chemical, another post-KSR case on obviousness under the “obvious to try—reasonable expectation of success” test, the Federal Circuit affirmed a district court’s holding that a patent’s claims were not obvious.62 The Federal Circuit stated: We do not accept Alphapharm’s assertion that KSR, as well as another case recently decided by this court . . . mandates reversal. Relying on KSR, Alphapharm argues that the claimed compounds would have been obvious because the prior art compound fell within “the objective reach of the claim,” and the evidence demonstrated that using the techniques of homologation and ring-walking would have been “obvious to try.” . . . We disagree. The KSR Court recognized that “[w]hen there is a design need or market pressure to solve a problem and there are a finite number of identified, predictable solutions, a person of ordinary skill has good reason to pursue the known options within his or her technical grasp.” KSR, 127 S. Ct. at 1732. In such circumstances, “the fact that a combination was obvious to try might show that it was obvious under § 103.” Id. That is not the case here. Rather than identify predictable solutions for antidiabetic treatment, the prior art disclosed a broad selection of compounds any one of which could have been selected as a lead compound for further investigation. Significantly, the closest prior art compound (compound b, the 6-methyl) exhibited negative properties that would have directed one of ordinary skill in the art away from that compound. Thus, this case fails to present the type of situation contemplated by the Court when it stated that an invention may be deemed obvious if it was “obvious to try.” The evidence showed that it was not obvious to try.63

Finally, in Pfizer, another post-KSR Federal Circuit case, the court held that a patent’s claims were invalid for being obvious based on the “obvious to try—reasonable expectation of success” obviousness test.64 The court stated its holding as follows: Case law is clear that obviousness cannot be avoided simply by a showing of some degree of unpredictability in the art so long as there was a reasonable probability of success; . . .

61. 62. 63. 64.

Id. at 1364–65 (emphasis added). Takeda Chem. Indus. v. Alphapharm Pty., Ltd., 492 F.3d 1350 (Fed. Cir. 2007). Id. at 1359. Pfizer, Inc. v. Apotex, Inc., 480 F.3d 1348 (Fed. Cir. 2007).

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Chapter 8 Patent Law Principle III: Validity a rule of law equating unpredictability to patentability, applied in this case, would mean that any new salt—including those specifically listed in the ’909 patent itself—would be separately patentable, simply because the formation and properties of each salt must be verified through testing. This cannot be the proper standard since the expectation of success need only be reasonable, not absolute[;] [t]he evidence would convince a reasonable finder of fact that the skilled artisan would have had that reasonable expectation of success that an acid addition salt of besylate would form and would work for its intended purpose. Specifically, the evidence clearly shows that as soon as tablet processing problems arose with the amlodipine maleate tablet formulations, Dr. Wells readily compiled a list of seven alternative anions—including the besylate—each of which he expected would form an amlodipine acid addition salt . . . But, once again, only a reasonable expectation of success, not a guarantee, is needed. O’Farrell,. . . . That reasonable expectation of success is further amply reflected in Dr. Wells’ further testimony that he expected these seven amlodipine acid addition salts would show improved physicochemical characteristics over the maleate salt, including improved stability and non-stickiness . . . [;] [w]e also note that the ’909 patent placed no limitations on the acid addition salt whatsoever, except that it be non-toxic and formed from an acid containing a pharmaceutically-acceptable anion. Accordingly, the ’909 patent contained a strong suggestion that any and all pharmaceutically-acceptable anions would form non-toxic acid addition salts and would work for their intended purpose— that is, to improve bioavailability of the active ingredient amlodipine and to improve handling and storage of amlodipine. Indeed, in proceedings before this court in Pfizer v. Dr. Reddy’s Laboratories involving the ’909 patent, Pfizer downplayed any difference between amlodipine maleate and any other acid addition salt form of amlodipine, including the besylate, prompting this court to observe that the sole active ingredient is amlodipine, and that it acts the same in the human body whether administered as a besylate salt or as a maleate salt[;] [f]inally, there is a suggestion in Pfizer’s supplemental filing with the FDA that it was known that the besylate salt of amlodipine would work for its intended purpose[;] [t]o be sure, “to have a reasonable expectation of success, one must be motivated to do more than merely to vary all parameters or try each of numerous possible choices until one possibly arrived at a successful result, where the prior art gave either no indication of which parameters were critical or no direction as to which of many possible choices is likely to be successful.”[;] Pfizer argues that, if anything, amlodipine in its besylate salt form would at most be “obvious to try,” i.e., to vary all parameters or try each of numerous possible choices to see if a successful result was obtained. O’Farrell; . . . [p]arties before this court often complain that holdings of obviousness were based on the impermissible “obvious to try” standard, and this court has accordingly struggled to strike a balance between the seemingly conflicting truisms

“The Difference Between the Prior Art and the Claims” 317 that, under 35 U.S.C. § 103, “obvious to try” is not the proper standard by which to evaluate obviousness, but that, under O’Farrell and other precedent, absolute predictability of success is not required. Reconciling the two is particularly germane to a situation where, as here, a formulation must be tested by routine procedures to verify its expected properties. The question becomes then, when the skilled artisan must test, how far does that need for testing go toward supporting a conclusion of non-obviousness?; . . . on the particularized facts of this case, consideration of the “routine testing” performed by Pfizer is appropriate because the prior art provided not only the means of creating acid addition salts but also predicted the results, which Pfizer merely had to verify through routine testing. . . . The evidence shows that, upon making a new acid addition salt, it was routine in the art to verify the expected physicochemical characteristics of each salt, including solubility,[;] our conclusion here relies on the fact that one skilled in the art would have had a reasonable expectation of success at the time the invention was made, and merely had to verify that expectation[;] [s]imply put, to conclude that amlodipine besylate would have been obvious, “the prior art, common knowledge, or the nature of the problem, viewed through the eyes of an ordinary artisan” merely had to suggest reacting amlodipine base with benzene sulphonic acid to form the besylate acid addition salt, and that that acid addition salt form would work for its intended purpose. Daystar, 464 F.3d at 1361. They did. See O’Farrell, 853 F.2d at 904[; and] [t]hus, while patentability of an invention is not negated by the manner in which it was made, “the converse is equally true: patentability is not imparted where ‘the prior art would have suggested to one of ordinary skill in the art that this process should be carried out and would have a reasonable likelihood of success.’”65

D. Teaching Away—Unexpected Success Teaching away and its corollary unexpected success were explained by the Supreme Court in KSR: The Court recognized that [to avoid obviousness] when a patent claims a structure already known in the prior art that is altered by the mere substitution of one element for another known in the field, the combination must do more than yield a predictable result [i.e., there must be unexpected success]. United States v. Adams, 383 U.S. 39, 50–51 (1966). It nevertheless rejected the Government’s claim that Adams’s battery was obvious. The Court relied upon the corollary principle that when the prior art teaches away from combining

65. Id. at 1364–69 (citations omitted, emphasis added).

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Chapter 8 Patent Law Principle III: Validity certain known elements, discovery of a successful means of combining them is more likely to be nonobvious. Id., at 51–52. When Adams designed his battery, the prior art warned that risks were involved in using the types of electrodes he employed. The fact that the elements worked together in an unexpected and fruitful manner supported the conclusion that Adams’s design was not obvious to those skilled in the art.66

In Icon, a post-KSR Federal Circuit decision, the court explained the “teaching away—unexpected success” rule as follows: “A reference may be said to teach away when a person of ordinary skill, upon reading the reference, would be discouraged from following the path set out in the reference, or would be led in a direction divergent from the path that was taken by the applicant.” In re Gurley, 27 F.3d 551, 553 (Fed. Cir. 1994); see KSR, 127 S. Ct. at 1739–40 (explaining that when the prior art teaches away from a combination, that combination is more likely to be nonobvious). Additionally, a reference may teach away from a use when that use would render the result inoperable. McGinley v. Franklin Sports, Inc., 262 F.3d 1339, 1354 (Fed. Cir. 2001).67

E. Statements by the Patentee About the Prior Art As explained by the Federal Circuit in Pharmastem Therapeutics: Admissions in the specification regarding the prior art are binding on the patentee for purposes of a later inquiry into obviousness. See Constant v. Advanced Micro Devices, Inc., 848 F.2d 1560, 1570 (Fed. Cir. 1988) (“A statement in the patent that something is in the prior art is binding on the applicant and patentee for determinations of anticipation and obviousness.”); Sjolund v. Musland, 847 F.2d 1573, 1577–79 (Fed. Cir. 1988) (patent specification admitted that certain matter was prior art, and thus “the jury was not free to disregard [that matter]” and “must have accepted [it] as prior art, as a matter of law”); In re Fout, 675 F.2d 297, 300 (CCPA 1982); In re Nomiya, 509 F.2d 566, 571 (CCPA 1975).68

The application of this principle by the Federal Circuit in Pharmastem Therapeutics is instructive. In that case, the court analyzed the situation and

66. KSR Int’l Co. v. Teleflex Inc., 550 U.S. 398, 416 (2007). 67. In re Icon Health & Fitness, Inc., 496 F.3d 1374, 1381 (Fed. Cir. 2007). 68. Pharmastem Therapeutics, Inc. v. Viacell, Inc., 491 F.3d 1342, 1361–63 (Fed. Cir. 2007).


ruled as follows regarding the issue of a patentee’s statements and their effect on determining obviousness: The cornerstone of [the patentee’s expert] Dr. Bernstein’s testimony at trial was that none of the prior art showed that cord blood contains stem cells. According to Dr. Bernstein, the presence of stem cells in cord blood was not conclusively established before the mouse studies described in the joint specification and the 1988 human cord blood transplant referred to in the specification of the ’553 patent. The problem with Dr. Bernstein’s testimony about the prior art references is that it cannot be reconciled with statements made by the inventors in the joint specification and with the prior art references themselves. Dr. Bernstein distinguished each of the prior art references on the ground that none of them disclosed the presence of stem cells in cord blood. Even though some of the references referred to stem cells as being present in cord blood, Dr. Bernstein took the position that those statements in the prior art references reflected flawed nomenclature. . . . According to Dr. Bernstein, it was not proved that stem cells, as opposed to the less primitive progenitor cells, are present in cord blood until the patentees performed the mouse experiments reported in the joint specification. Those experiments showed that relatively small amounts of fetal blood were sufficient to effect hematopoietic reconstitution in lethally irradiated mice. Dr. Bernstein added that in light of the poor results obtained with transplantations of adult blood “it had to take a leap of thinking that cord blood was different.” The joint specification, however, tells a different story. There, the inventors acknowledged that it was previously known that the properties of cord blood are quite different from those of adult blood and that hematopoietic stem cells had been found in cord blood in much greater concentrations than in adult blood. Citing a number of references, the inventors stated the following: “A human hematopoietic colony-forming cell with the ability to generate progenitors for secondary colonies has been identified in human umbilical cord blood. In addition, hematopoietic stem cells have been demonstrated in human umbilical cord blood, by colony formation, to occur at a much higher level than that found in the adult. The presence of circulating hematopoietic progenitor cells in human fetal blood has also been shown. Human fetal and neonatal blood has been reported to contain megakaryocyte and burst erythroblast progenitors with increased numbers of erythroid progenitors in human cord blood or fetal liver relative to adult blood.” ’681 patent, col. 4, ll. 15–34 (citations omitted);’553 patent, col. 4, ll. 21–42 (citations omitted). That excerpt from the specification cannot be squared with Dr. Bernstein’s characterization of the prior art. Contrary to Dr. Bernstein’s contention that the prior art did not disclose the presence of stem cells in cord blood, the inventors cited several prior art references and stated flatly that “hematopoietic stem cells

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Chapter 8 Patent Law Principle III: Validity have been demonstrated in human umbilical cord blood.” Moreover, the inventors noted that the prior art references showed that the concentration of stem cells in cord blood was “at a much higher level than in the adult.” Nor can those statements in the specification be dismissed as reflecting a careless use of the term “hematopoietic stem cell,.” . . . Accordingly, PharmaStem’s argument that stem cells had not been proved to exist in cord blood prior to the experiments described in the patents is contrary to the representation in the specification that the prior art disclosed stem cells in cord blood. . . . Nor is there any unfairness in holding the inventors to the consequences of their admissions, as their characterization of the prior art as showing the presence of stem cells in cord blood is hardly unreasonable.69

VII. “Level of Ordinary Skill in the Pertinent Art” A. Factors to Be Considered in Determining the Level of Ordinary Skill in the Art As explained by the Federal Circuit in its Apotex decision: “Factors that may be considered in determining level of ordinary skill in the art include: (1) the educational level of the inventor; (2) type of problems encountered in the art; (3) prior art solutions to those problems; (4) rapidity with which innovations are made; (5) sophistication of the technology; and (6) educational level of active workers in the field.” Envtl. Designs, Ltd. v. Union Oil Co., 713 F.2d 693, 696 (Fed. Cir. 1983) (citing Orthopedic Equip. Co. v. All Orthopedic Appliances, Inc., 707 F.2d 1376, 1381–82 (Fed. Cir. 1983)). These factors are not exhaustive but are merely a guide to determining the level of ordinary skill in the art.70

B. Application of the Factors in Determining the Level of Ordinary Skill in the Art The Federal Circuit in Apotex instructs as to how to apply these factors in determining the level of ordinary skill in the art: The district court concluded that the ordinary person skilled in the art pertaining to the ’741 patent “would have a medical degree, experience treating patients

69. Id. at 1361–62 (emphasis added). 70. Daiichi Sankyo Co., Ltd. v. Apotex, Inc., 501 F.3d 1254, 1256 (Fed. Cir. 2007).

“Level of Ordinary Skill in the Pertinent Art” with ear infections, and knowledge of the pharmacology and use of antibiotics. This person would be . . . a pediatrician or general practitioner—those doctors who are often the ‘first line of defense’ in treating ear infections and who, by virtue of their medical training, possess basic pharmacological knowledge.” Apotex argues that the district court clearly erred in this determination and that one having ordinary skill in the relevant art is properly defined as “a person engaged in developing new pharmaceuticals, formulations and treatment methods, or a specialist in ear treatments such as an otologist, otolaryngologist, or otorhinolaryngologist who also has training in pharmaceutical formulations.” . . . In making its determination regarding the level of skill in the art, the district court noted that the parties had provided “little more than conclusory arguments concerning this issue in their briefs.” As a result, the court looked to other decisions involving patents for a method of treating a physical condition for guidance. Only one case cited by the district court is binding on us, Merck & Co. v. Teva Pharm. USA, Inc., 347 F.3d 1367 (Fed. Cir. 2003). The district court was correct that in that case we affirmed the trial court’s conclusion that a person having ordinary skill in the relevant art was a person having a medical degree, experience treating patients with osteoporosis, and knowledge of the pharmacology and usage of biphosponates—the compounds at issue in Merck. However, in Merck the level of skill in the art was not disputed by the parties. Thus, we simply accepted the district court’s finding. That clearly is not the case before us. Therefore, the district court’s reliance on the level of skill in the art stated in Merck was improper. The art involved in the ’741 patent is the creation of a compound to treat ear infections without damaging a patient’s hearing. The inventors of the ’741 patent were specialists in drug and ear treatments—not general practitioners or pediatricians. At the time of the invention, Inventor Sato was a university professor specializing in otorhinolaryngology; Inventor Handa was a clinical development department manager at Daiichi, where he was involved with new drug development and clinical trials; and Inventor Kitahara was a research scientist at Daiichi engaged in the research and development of antibiotics. Additionally, others working in the same field as the inventors of the ’741 patent were of the same skill level. See Daiichi Material for [C]onference on Development, at 1 (Nov. 11, 1987) (stating that “there are many voices among medical persons concerned with otorhinolaryngology for demanding development of an otic solution making use of [ofloxacin]”). Further, the problem the invention of the ’741 patent was trying to solve was to create a topical antibiotic compound to treat ear infections (otopathy) that did not have damage to the ear as a side effect.’741 Patent, col.1 II.23–34. Indeed, most of the written description details the inventors’ testing ofloxacin on guinea pigs and their findings that ototoxicity did not result from the use of their compound. Such animal testing is traditionally outside the realm of a general practitioner or pediatrician. Finally, while a general practitioner or pediatrician could (and would) prescribe the invention of the ’741 patent to treat ear infections, he would not have the training or knowledge to develop the claimed

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Chapter 8 Patent Law Principle III: Validity compound absent some specialty training such as that possessed by the ’741 patent’s inventors. Accordingly, the level of ordinary skill in the art of the ’741 patent is that of a person engaged in developing pharmaceutical formulations and treatment methods for the ear or a specialist in ear treatments such as an otologist, otolaryngologist, or otorhinolaryngologist who also has training in pharmaceutical formulations. Thus, the district court clearly erred in finding otherwise.71

C. One of Ordinary Skill in the Art Is an Objective Fiction The U.S. Supreme Court stressed in KSR that one of ordinary skill in the art used in determining obviousness is an objective fiction, and is not, for example, an inventor.72 Thus, the views of an inventor may not necessarily be those of one of ordinary skill in the art. In determining whether the subject matter of a patent claim is obvious, neither the particular motivation nor the avowed purpose of the patentee controls. What matters is the objective reach of the claim. If the claim extends to what is obvious, it is invalid under § 103. One of the ways in which a patent’s subject matter can be proved obvious is by noting that there existed at the time of invention a known problem for which there was an obvious solution encompassed by the patent’s claims. The first error of the Court of Appeals in this case was to foreclose this reasoning by holding that courts and patent examiners should look only to the problem the patentee was trying to solve. The Court of Appeals failed to recognize that the problem motivating the patentee may be only one of many addressed by the patent’s subject matter. The question is not whether the combination was obvious to the patentee but whether the combination was obvious to a person with ordinary skill in the art. Under the correct analysis, any need or problem known in the field of endeavor at the time of invention and addressed by the patent can provide a reason for combining the elements in the manner claimed. The second error of the Court of Appeals lay in its assumption that a person of ordinary skill attempting to solve a problem will be led only to those elements of prior art designed to solve the same problem. The primary purpose of Asano was solving the constant ratio problem; so, the court concluded, an inventor considering how to put a sensor on an adjustable pedal would have no reason to consider putting it on the Asano pedal. Common sense teaches, however, that familiar items may have obvious uses beyond their primary purposes, and in many cases a person of ordinary skill will be able to fit the teachings of multiple

71. Id. at 1267–57 (some citations omitted, quotation modifications in original). 72. KSR, 550 U.S. at 419–20.

Objective Evidence of Nonobviousness: Secondary Considerations 323 patents together like pieces of a puzzle. Regardless of Asano’s primary purpose, the design provided an obvious example of an adjustable pedal with a fixed pivot point; and the prior art was replete with patents indicating that a fixed pivot point was an ideal mount for a sensor. The idea that a designer hoping to make an adjustable electronic pedal would ignore Asano because Asano was designed to solve the constant ratio problem makes little sense. A person of ordinary skill is also a person of ordinary creativity, not an automaton.73

VIII. Objective Evidence of Nonobviousness: Secondary Considerations In Graham, the U.S. Supreme Court held that “Secondary considerations [such] as commercial success, long felt but unsolved needs, failure of others, etc., might be utilized to give light to the circumstances surrounding the origin of the subject matter sought to be patented” and “may have relevancy” as indicia of nonobviousness.74 The Federal Circuit has held that a patentee “may rebut a prima facie showing of obviousness with objective indicia of nonobviousness” such as those set forth in Graham.75

A. There Must Be a Nexus Between the Secondary Considerations and the Claimed Invention As explained by the Federal Circuit: Evidence of commercial success, or other secondary considerations, is only significant if there is a nexus between the claimed invention and the commercial success. As we explained in J.T. Eaton & Co. v. Atlantic Paste & Glue Co., 106 F.3d 1563 (Fed. Cir. 1997), “[w]hen a patentee can demonstrate commercial success, usually shown by significant sales in a relevant market, and that the successful product is the invention disclosed and claimed in the patent, it is presumed that the commercial success is due to the patented invention.” Id. at 1571; see also Brown & Williamson, 229 F.3d at 1130 (stating the presumption that commercial success is due to the patented invention applies “if the marketed product embodies the claimed features, and is coextensive with them.”). Thus, if the

73. Id. (citations omitted, emphasis added). 74. Graham v. John Deere Co. of Kan. City, 383 U.S. 1, 17–18 (1966) (bracketing in original). 75. Ormco Corp. v. Align Tech., Inc., 463 F.3d 1299, 1311 (Fed. Cir. 2006); In re Kahn, 441 F.3d 977, 990 (Fed. Cir. 2006); WMS Gaming Inc. v. Int’l Game Tech., 184 F.3d 1339, 1359 (Fed. Cir. 1999).

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Chapter 8 Patent Law Principle III: Validity commercial success is due to an unclaimed feature of the device, the commercial success is irrelevant. So too if the feature that creates the commercial success was known in the prior art, the success is not pertinent. n14 n14 See J.T. Eaton, 106 F.3d at 1571 (“[T]he asserted commercial success of the product must be due to the merits of the claimed invention beyond what was readily available in the prior art.”); Richdel, Inc. v. Sunspool Corp., 714 F.2d 1573, 1580 (Fed. Cir.1983) (holding claims obvious despite purported showing of commercial success when patentee failed to show that “such commercial success as its marketed system enjoyed was due to anything disclosed in the patent in suit which was not readily available in the prior art”).76

The Federal Circuit’s analysis in Ormco as to whether there was a nexus between the patentee’s secondary decisions and the claims of the patent is instructive on this issue. The court stated: Here, it is undisputed that Align’s Invisalign product is commercially successful. However, the evidence clearly rebuts the presumption that Invisalign’s success was due to the claimed and novel features. Align relies on testimony and an expert report of Dr. Covell, and testimony of Align’s own CEO, Thomas Prescott. In large part these witnesses testified that commercial success was due to unclaimed or non-novel features of the device—the aesthetic appeal and improved comfort of transparent devices without brackets and wire, and the computerized design and manufacture of the appliances. Indeed, Align itself only argues that the commercial success is due “partially” to claimed features. Nonetheless, Align argues that the commercial success was due at least in part to claimed and novel features. Thus, Align’s witnesses also suggested that the commercial success was due to reduction in time spent in the dentist’s chair, a reduction resulting from the provision of multiple appliances to the patient at one time. But, as we have noted above, to the extent that such a time savings was the result of the use of multiple appliances (rather than a single device requiring individual adjustment), that feature was not new; Truax had already accomplished this. And to the extent that the time savings resulted from the patient’s substitution of a new device without visiting the dentist, that feature was not claimed. Finally, to the extent that these witnesses testified that the aesthetic appeal resulted from changing the devices every two weeks and avoiding the use of dirty and worn devices, this feature was also not new; it had been accomplished by Truax. We conclude that the evidence does not show that the commercial success was the result of claimed and novel features. Nor has Align submitted probative evidence that claimed and novel features met a long-felt but unresolved need.

76. Ormco, 463 F.3d at 1311–12 (footnote omitted, emphasis added); Ecolochem, Inc. v. S. Cal. Edison Co., 227 F.3d 1361, 1377 (Fed. Cir. 2000).

Objective Evidence of Nonobviousness: Secondary Considerations 325 With respect to “failures of others,” Align has submitted evidence that, prior to the introduction of the successful Invisalign and RW&B products, other orthodontists had tried and failed to develop a functional, invisible orthodontic system. Again, the evidence does not suggest that these prior attempts failed because the devices lacked the claimed features.77

B. Even the Strongest Evidence of Secondary Considerations May Not Overcome a Strong Obviousness Position The Federal Circuit has repeatedly held that “[a]lthough secondary considerations must be taken into account, they do not necessarily control the obviousness conclusion.”78 Where “the record establishes such a strong case of obviousness,” secondary considerations, such as “unexpectedly superior results [may] ultimately [be] insufficient” to overcome a holding of obviousness.79 As explained by the Federal Circuit in Newell: Despite a very strong prima facie case of obviousness established by the evidence, Newell argues that the district court was obligated to draw the “inference” of nonobviousness from Newell’s evidence of commercial success, copying by others, and other secondary considerations. These arguments were unpersuasive to the trial court and are unpersuasive to us. First, as indicated, obviousness is not a factual inference; second, although these factors must be considered, they do not control the obviousness conclusion. See Custom Accessories, Inc. v. Jeffrey-Allan Indus., Inc., 807 F.2d 955, 960 (Fed. Cir. 1986); EWP Corp. v. Reliance Universal Inc., 755 F.2d 898, 908 (Fed. Cir. 1985). Under similar circumstances, in EWP Corp., where the record showed that the invention had become “very successful” in the industry, this court held: In reaching our conclusion that the invention claimed would have been obvious, we have considered the evidence and arguments pertaining to the so-called “secondary considerations” such as commercial success, licensing, adoption by the industry, etc. Upon full consideration of all the evidence, we remain convinced that it presents a clear and very strong case of obviousness based on admissions and the teachings of the new references above considered. Id. at 907. In this case, as well, although the record shows a highly successful product, the record also establishes such a strong case of obviousness based on admissions and the teachings of the prior art, including the improved Corcoran tearable shade material, a reference not considered during examination, that the

77. Ormco, 463 F.3d at 1312–13 (footnote omitted, citations omitted, emphasis added). 78. Pfizer, Inc. v. Apotex, Inc., 480 F.3d 1348, 1372 (Fed. Cir. 2007). 79. Id. (emphasis added).

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Chapter 8 Patent Law Principle III: Validity objective evidence of nonobviousness does not persuade us to reach a contrary conclusion.80

C. Examples of Secondary Considerations 1. Commercial Success As explained above: (a) there must be a nexus between commercial success and the claimed invention to affect a finding of obviousness; and (b) where the finding of obviousness is strong, courts do not have to hold that commercial success of a claimed invention overcomes obviousness. In Teva Pharmaceuticals, the Federal Circuit described the commercial success secondary consideration as follows: [T]he law presumes an idea would successfully have been brought to market sooner, in response to market forces, had the idea been obvious to persons skilled in the art. Thus, the law deems evidence of (1) commercial success, and (2) some causal relation or “nexus” between an invention and commercial success of a product embodying that invention, probative of whether an invention was non-obvious. See Graham, 383 U.S. at 17–18 (“Such secondary considerations as commercial success, long felt but unsolved needs, failure of others, etc., might be utilized to give light to the circumstances surrounding the origin of the subject matter sought to be patented. As indicia of obviousness or nonobviousness, these inquiries may have relevancy.”); McNeil-PPC, Inc. v. L. Perrigo Co., 337 F.3d 1362, 1370 (Fed. Cir. 2003). . . . In Graham the Supreme Court relied on the reasoning from a law review note discussing commercial success. See Graham, 383 U.S. at 17–18, citing Note, Subtests of “Nonobviousness”: A Nontechnical Approach to Patent Validity. 112 U. Pa. L. Rev. 1169, 1175 (1964). The article suggested “the possibility of market success attendant upon the solution of an existing problem may induce innovators to attempt a solution. If in fact a product attains a high degree of commercial success, there is a basis for inferring that such attempts have been made and have failed.” As our predecessor court explained in In re Fielder, 471 F.2d 640, 644 (C.C.P.A. 1973), “these rationales, presumably approved by the [Supreme] Court, tie commercial success and the like directly to the practical, financial source of impetus for research and development.”81

The Federal Circuit’s Teva Pharmaceuticals case provides an informative discussion regarding commercial success as a secondary factor to rebut

80. Newell Cos. v. Kenney Mfg. Co., 864 F.2d 757, 768–69 (Fed. Cir. 1988) (footnotes omitted, emphasis added). 81. Merck & Co. v. Teva Pharms. USA, Inc., 395 F.3d 1364, 1376–1377 (Fed. Cir. 2005).

Objective Evidence of Nonobviousness: Secondary Considerations 327

obviousness. Teva involved a challenge to Merck’s patent on its osteoporosis drug Fosamax®.82 Specifically, the patent claimed once-weekly administration of the drug.83 The district court found that the patent was nonobvious over the prior art84 as supported by evidence of commercial success.85 In reversing the district court, the Federal Circuit determined that the inventive aspect of the claims was a once-weekly dosing of the drug and that the patent was obvious because this idea was in the prior art (in the so-called “Lunar News articles”) more than one year before the application for the patent was filed.86 In addressing commercial success, the Federal Circuit held that under the nexus requirement, evidence of commercial success must focus on the inventive aspect of the patent (i.e., the once-weekly dosing).87 The court then concluded that the evidence of commercial success provided by the patentee was limited with respect to the once-weekly dosing claimed in the patent because only the patentee could sell the drug for once-weekly dosing due to the patent itself and FDA regulations providing the patentee with market exclusivity for such dosing.88 The Federal Circuit explained that because of the exclusivity of sales of the drug, its commercial success was not the type of commercial success envisioned by the Supreme Court as providing indicia of nonobviousness.89 In particular, the Federal Circuit stated: [T]he district court erred in its weighing of secondary considerations of nonobviousness. Although the district court correctly found Merck’s once-weekly dosing of Fosamax was commercially successful, in this context that fact has minimal probative value on the issue of obviousness. Commercial success is relevant because the law presumes an idea would successfully have been brought to market sooner, in response to market forces, had the idea been obvious to persons skilled in the art. Thus, the law deems evidence of (1) commercial success, and (2) some causal relation or “nexus” between an invention and commercial success of a product embodying that invention, probative of whether an invention was non-obvious. That rationale has no force in this case. In Graham the Supreme Court relied on the reasoning [from a law review] article [that] suggested “the possibility of market success attendant upon the solution of an existing problem may induce innovators to attempt a solution. If in fact a product attains a high degree of commercial success, there is a basis for inferring that such attempts have been

82. 83. 84. 85. 86. 87. 88. 89.

Id. at 1368. Id. Id. Id. at 1376. Id. at 1376 (“The Lunar News articles had clearly suggested the once-weekly dosing”). Id. at 1377. Id. Id. at 1376–77.

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Chapter 8 Patent Law Principle III: Validity made and have failed.” “[T]these rationales, presumably approved by the [Supreme] Court, tie commercial success and the like directly to the practical, financial source of impetus for research and development.” But that chain of inferences fails on these facts. Although commercial success might generally support a conclusion that Merck’s claimed invention was non-obvious in relation to what came before in the marketplace, the question at bar is narrower. It is whether the claimed invention is non-obvious in relation to the ideas set forth in the Lunar News articles[i.e., once-weekly dosing]. Financial success is not significantly probative of that question in this case because others were legally barred from commercially testing the Lunar News ideas. [The author of the Lunar News articles], for example, could not put his ideas to practice in 1996—he could only exhort Merck to try it. They did. In this case Merck had a right to exclude others from practicing the weeklydosing of alendronate specified in claims 23 and 37, given (1) another patent covering the administration of alendronate sodium to treat osteoporosis, U.S. Pat. No. 4,621,077 (issued Nov. 4, 1986); and (2) its exclusive statutory right, in conjunction with FDA marketing approvals, to offer Fosamax at any dosage for the next five years. 21 U.S.C. § 355(c)(3)(D)(ii) (2000). Because market entry by others was precluded on those bases, the inference of non-obviousness of weeklydosing, from evidence of commercial success, is weak. Although commercial success may have probative value for finding non-obviousness of Merck’s weekly-dosing regimen in some context, it is not enough to show the claims at bar are patentably distinct from the weekly-dosing ideas in the Lunar News articles. Thus, we conclude the district court misjudged this factor as confirming its conclusion of non-obviousness.90

2. Unexpected Results In addition to the above-described required nexus between claimed subject matter and unexpected results, to serve as evidence of nonobviousness, unexpected results must, in fact, be unexpected when compared with expected results.91 As indicated by the Federal Circuit: [B]y definition, any superior property must be unexpected to be considered as evidence of non-obviousness. In re Chupp, 816 F.2d 643, 646 (Fed. Cir. 1987). Thus, in order to properly evaluate whether a superior property was unexpected, the court should have considered what properties were expected. Here, Pfizer’s

90. Id. at 1376–77 (citations omitted, emphasis added). 91. Pfizer, Inc. v. Apotex, Inc., 480 F.3d 1348, 1371 (Fed. Cir. 2007); In re Chupp, 816 F.2d 643, 646 (Fed. Cir. 1987).

Objective Evidence of Nonobviousness: Secondary Considerations 329 evidence must fail because the record is devoid of any evidence of what the skilled artisan would have expected.92

Additionally, “when unexpected results are used as evidence of nonobviousness, the results must be shown to be unexpected compared with the closest prior art.”93 Further, when determining the disclosure of the prior art for purposes of comparison with purportedly “unexpected results,” the teaching of the prior art must be considered as a whole.94 Therefore, “the teaching of a prior art patent is not limited to its preferred embodiment, see Merck, 874 F.2d at 807 (‘the fact that a specific [embodiment] is taught to be preferred is not controlling, since all disclosures of the prior art, including unpreferred embodiments, must be considered.’).”95 3. Failure of Others—Resolution of Long-Felt Need As discussed above, similar to every secondary consideration, there must be a nexus between the failures of others and resolution of long-felt need and the claimed invention. Additionally, the Federal Circuit has elaborated on the failure of others/resolution of long-felt need as follows: Our case law supports . . . that . . . evidence of failed attempts by others could be determinative on the issue of obviousness. For example, in Alco Standard Corp. v. Tennessee Valley Authority, this court held that when evidence in the record fully supports a finding that others in the industry failed to solve the problem, then objective considerations “may . . . establish that an invention appearing to have been obvious in light of the prior art was not.” 808 F.2d 1490, 1500–01 (Fed. Cir. 1986). Similarly, in Intel Corp. v. United States International Trade Commission, we reasoned that an accused infringer’s inability to develop a product made possible by the claimed invention indicated nonobviousness. 946 F.2d 821, 835 (Fed. Cir. 1991); see also Minnesota Mining & Mfg. Co. v. Johnson & Johnson Orthopaedics, Inc., 976 F.2d 1559, 1574 (Fed. Cir. 1992) (reasoning that competitors’ failure to develop the patented invention suggested nonobviousness); Panduit Corp. v. Dennison Mfg. Co., 774 F.2d 1082, 1099 (Fed. Cir. 1985) (reasoning that failure by others, including the accused infringer, to develop the claimed invention constitutes “virtually irrefutable” evidence of nonobviousness), vacated Dennison Mfg. Co. v. Panduit Corp., 475 U.S. 809, 89

92. Pfizer, 480 F.3d at 1371 (some citations omitted, emphasis added). 93. Id. at 1370; Kao Corp. v. Unilever United States, Inc., 441 F.3d 963, 970 (Fed. Cir. 2006); In re Baxter Travenol Labs., 952 F.2d 388, 392 (Fed. Cir. 1991). 94. Id. 95. Id.

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Chapter 8 Patent Law Principle III: Validity L. Ed. 2d 817, 106 S. Ct. 1578 (1986) (vacating for failure to give proper deference to district court’s fact finding rather than legal error).96

The Federal Circuit’s discussion in Advanced Display Systems of evidence sufficient to support a “failure of others—resolution of long-felt need” position as indicia of nonobviousness is illustrative of the type of evidence necessary to support this position. In the present case, Zhou’s deposition furnishes persuasive evidence that the West patent is nonobvious by describing ADS’s repeated failures to design the claimed invention. In his deposition, Zhou testified that ADS was entirely unsuccessful in developing the cholestric visible material through independent research. Zhou also explained that ADS “tried for a long time” to build an electrical driver, but its efforts “were all not successful.” Zhou further detailed how ADS’s attempts to develop a polymer-free LCD met with failure and that ADS “did not know how to design” the device until it copied the claimed invention. In addition, Zhou testified that, even after gaining access to the claimed invention, ADS was unable to design around the West patent because such a task was time consuming and “very hard.”97

4. Copying by Others Again, as discussed above, as with all indicia of nonobviousness there must be a nexus between copying by others and the claimed invention. Additionally, the Federal Circuit has elaborated on the copying by others secondary factor as follows: Zhou’s deposition also provides compelling evidence of nonobviousness by illustrating ADS’s wholesale copying of the claimed invention. See Specialty Composites v. Cabot Corp., 845 F.2d 981, 991 (Fed. Cir. 1988) (reasoning that an accused infringer’s close copying of the “claimed invention, rather than one in the public domain, is indicative of nonobviousness”). Indeed, Zhou’s deposition reveals that ADS’s device was virtually an identical replica of the claimed invention. Zhou testified that the Kent and ADS “chemistry mixtures and the ways they make the cell are the same.” Underlying that comparison was Zhou’s testimony that ADS developed its cholestric visible material by copying Kent’s formula. Zhou also explained that ADS built its electrical driver by disassembling Kent’s prototype, photographing its features, and then using the photograph essentially as an instruction manual. The import of such copying evidence merits even greater weight in view of ADS’s failure to develop independently the claimed invention. See Dow Chem. Co. v. American Cyanamid Co., 816 F.2d 617, 622

96. Advanced Display Sys. v. Kent State Univ., 212 F.3d 1272, 1285 (Fed. Cir. 2000). 97. Id.

Section 103(c): Commonly Owned Prior Art and Patent or Patent Application 331 (Fed. Cir. 1987) (reasoning that an infringer’s failed attempts to develop the claimed invention followed by subsequent copying of the invention supports a holding of nonobviousness); Vandenberg v. Dairy Equip. Co., 740 F.2d 1560, 1567 (Fed. Cir. 1984) (“The copying of an invention may constitute evidence that the invention is not an obvious one. . . . This would be particularly true where the copyist had itself attempted for a substantial length of time to design a similar device, and had failed”).98

IX. Section 103(c): Commonly Owned Prior Art and Patent or Patent Application Section 103(c) of the U.S. Patent Statute (35 U.S.C. § 103(c)) reads: (c) (1) Subject matter developed by another person, which qualifies as prior art only under one or more of subsections (e), (f), and (g) of section 102 of this title [35 USCS § 102], shall not preclude patentability under this section where the subject matter and the claimed invention were, at the time the claimed invention was made, owned by the same person or subject to an obligation of assignment to the same person. (2) For purposes of this subsection, subject matter developed by another person and a claimed invention shall be deemed to have been owned by the same person or subject to an obligation of assignment to the same person if— (A) the claimed invention was made by or on behalf of parties to a joint research agreement that was in effect on or before the date the claimed invention was made; (B) the claimed invention was made as a result of activities undertaken within the scope of the joint research agreement; and (C) the application for patent for the claimed invention discloses or is amended to disclose the names of the parties to the joint research agreement. (3) For purposes of paragraph (2), the term “joint research agreement” means a written contract, grant, or cooperative agreement entered into by two or more persons or entities for the performance of experimental, developmental, or research work in the field of the claimed invention.99

The Federal Circuit has succinctly described Section 103(c) as follows: It is historically very clear that this provision was intended to avoid the invalidation of patents under § 103 on the basis of the work of fellow employees engaged in team research. See Section-by-Section Analysis: Patent Law Amendments

98. Id. at 1285–86. 99. 35 U.S.C.S. § 103(c) (2009).

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Chapter 8 Patent Law Principle III: Validity Act of 1984, 130 Cong. Rec. 28069, 28071 (Oct. 1, 1984), reprinted in 1984 U.S.C.C.A.N. 5827, 5833 (stating that the amendment, which encourages communication among members of research teams, was a response to Bass and In re Clemens, 622 F.2d 1029 (CCPA 1980), in which “an earlier invention which is not public may be treated under Section 102(g), and possibly under 102(f), as prior art”). There was no clearly apparent purpose in Congress’s inclusion of § 102(f) in the amendment other than an attempt to ameliorate the problems of patenting the results of team research. . . . The statutory language provides a clear statement that subject matter that qualifies as prior art under subsection (f) or (g) cannot be combined with other prior art to render a claimed invention obvious and hence unpatentable when the relevant prior art is commonly owned with the claimed invention at the time the invention was made.100

X. Special Rules for Obviousness As explained below (and similar to the situation with infringement), there are special rules for determining obviousness of means-plus-function and product-by-process claims. These special rules must be considered when evaluating potential obviousness of these claims.

A. Means-Plus-Function Claims Means-plus-function claim terms present an interesting—and unique— exception to the general rules regarding obviousness. These claims are statutorily defined101 ones that are perhaps the only exception102 to the general rule that “equivalents” are not considered in claim construction and determinations of obviousness. Rather, as discussed above, a determination

100. OddzOn Prods. v. Just Toys, 122 F.3d 1396, 1403 (Fed. Cir. 1997) (emphasis added). 101. 35 U.S.C.S. § 112, P 6 (2009). 102. Although, there is one rather unusual Federal Circuit case, Cohesive Techs., in which the Federal Circuit construes the literal scope of a claim to “about 30 μm” to include “functional equivalents” within the literal construction of the claim for literal infringement. The court then held that the patentees were not entitled to the doctrine of equivalents because: “The ‘about 30 μm’ limitation already literally encompasses diameters that are equivalent to 30 μm in the context of the patent, any particle diameter that performs the same function, in the same way, with the same result as a 30 μm diameter is already within the literal scope of the claim.” Cohesive Techs., Inc. v. Waters Corp.,, 543 F.3d 1351, 1372 (Fed. Cir. 2008). However, other than means-plus-function claims, this appears to be the only Federal Circuit case to construe the literal scope of claims to include functional equivalents.

Special Rules for Obviousness

of obviousness compares only the construed claims with the prior art. “Equivalents” of claimed subject matter are generally only considered in any manner when determining infringement under the doctrine of equivalents. However, as discussed below, for means-plus-function claims, claim construction includes a special type of “equivalents” (defined under 35 U.S.C. § 112, Paragraph 6, not under the doctrine of equivalents), and obviousness determinations involve investigations whether the subject matter of the construed claim (including the “equivalents”) would have been obvious. 1. Determination of a Means-Plus-Function Claim Means-plus-function claims103 are those that do not expressly recite a specific structure or material for accomplishing a specified function. Rather, they are typically written as claiming “a means for” accomplishing a specified function. A typical means-plus-function claim is shown below: Claim 11. A saw for cutting concrete . . . comprising: . . . means connected to the saw for supporting the surface of the concrete adjacent the leading edge of the cutting blade to inhibit chipping, spalling, or cracking of the concrete surface during cutting. . . .104

2. Construing Means-Plus-Function Claims for Determining Obviousness The construction of a means-plus-function claim limitation proceeds according to 35 U.S.C. Section 112, Paragraph 6, which has codified meansplus-function claims. It states: An element in a claim for a combination may be expressed as a means or step for performing a specified function without the recitation of structure, material, or acts in support thereof, and such claim shall be construed to cover the corresponding structure, material, or acts described in the specification and equivalents thereof.105

103. There are also step-plus-function claims, which are construed in the same was as meansplus-function claims, except that instead of the specification providing “means for” accomplishing a specified function, the specification provides “acts for” accomplishing a specified function. 104. Chiuminatta Concrete Concepts, Inc. v. Cardinal Indus. Inc., 145 F.3d 1303, 1305–06 (Fed. Cir. 1998) (emphasis added). 105. 35 U.S.C.S. § 112, P 6 (2009) (emphasis added); In re Donaldson Co., 16 F.3d 1189, 1193–94 (Fed. Cir. 1994) (en banc).

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a) Function The function of a means-plus-function claim is construed in the same manner that any claim term is construed.107 b) Structure It is in the construction of the “structure” portion of a means-plus-function claim where an obviousness analysis differs significantly from that of other claims. This is because claim construction for the “structure” of a means-plusfunction claim must include “equivalents” under Section 112, Paragraph 6.108 This is virtually the only time that an obviousness evaluation is performed wherein potentially invalidating prior art or events are compared against construed claims in which the construction includes “equivalents.” As explained by the Federal Circuit in the context of anticipation of means-plus-function claims, but which is applicable to obviousness of means-plus-function claims as well: The disclosed and prior art structures are not identical, but the claim may nonetheless be anticipated. While a “means-plus-function” limitation may appear to include all means capable of achieving the desired function, the statute requires that it be “construed to cover the corresponding structure, material, or acts described in the specification and equivalents thereof.” 35 U.S.C. § 112, para. 6 (emphasis added).109

As discussed in detail in Chapter 2, in accordance with Section 112, Paragraph 6, construction of the structure aspect of a means-plus-function claim includes: (a) the exact structures in the specification that are clearly linked or associated with the claimed function; and (b) “equivalents thereof ” as determined by equivalency under Section 112, Paragraph 6.110 As explained in Chapter 2 (claim construction), as well as in Chapters 3 and 4 (literal

106. 107. 108. 109. 110.

Omega Eng’g, Inc. v. Raytek Corp., 334 F.3d 1314, 1322 (Fed. Cir. 2003) (citations omitted). E.g., Omega Eng’g, 334 F.3d at 1322; Donaldson, 16 F.3d at 1193–94. E.g., Omega Eng’g, 334 F.3d at 1322; Donaldson, 16 F.3d at 1193–94. In re Bond, 910 F.2d 831, 833 (Fed. Cir. 1990) (emphasis in original, emphasis added). E.g., Omega Eng’g, 334 F.3d at 1322; Donaldson, 16 F.3d at 1193–94; Bond, 910 F.2d at 833.

Special Rules for Obviousness

infringement and infringement under the doctrine of equivalents of meansplus-function claims), determining equivalency under Section 112, Paragraph 6 is similar but not identical to doing an equivalence analysis under the doctrine of equivalents.111 An equivalence analysis under Section 112, Paragraph 6 considers whether there is an “insubstantial” difference from the structures explicitly shown in the specification and a potentially equivalent structure.112 3. Determining Obviousness of Means-Plus-Function Claims As discussed above, in order for any claim (including a means-plus-function claim) to be obvious, the subject matter of the properly construed claim must have been obvious from the prior art (including a combination of prior art references or events) to one of ordinary skill in the relevant art at the time of the invention. Means-plus-function claims are no different in this regard. However, they differ in that the proper construction of a means-plus-function claim includes the claimed function and the associated structures (both as explicitly disclosed in the specification) and “equivalents thereof ” under Section 112, Paragraph 6.113 Therefore, a proper obviousness analysis of a means-plus-function claim determines whether one of skill in the art would have found obvious the subject matter of the properly construed claim, including the function and structures (both as explicitly disclosed in the specification and equivalents thereof under Section 112, Paragraph 6). Therefore, a means-plus-function claim limitation is obvious if one of ordinary skill in the relevant art at the time of the invention would have found the claimed function and any of the structures (including those explicitly disclosed or those that are “equivalent”) to have been obvious over the prior art.114

B. Product-by-Process Claims 1. Definition of a Product-by-Process Claim A product-by-process claim is “one in which the product is defined at least in part in terms of the method or process by which it is made.”115 While the patent statute does not provide for product-by-process claims, the courts have

111. Welker Bearing Co. v. PHD, Inc., 550 F.3d 1090, 1099–1100 (Fed. Cir. 2008); Chiuminatta Concrete Concepts, Inc. v. Cardinal Indus. Inc., 145 F.3d 1303, 1310–11 (Fed. Cir. 1998). 112. E.g., Interactive Pictures Corp. v. Infinite Pictures, Inc., 274 F.3d 1371, 1383 (Fed. Cir. 2001); Ishida Co., Ltd. v. Taylor, 221 F.3d 1310, 1317 (Fed. Cir. 2000); Odetics, Inc. v. Storage Tech. Corp., 185 F.3d 1259, 1267 (Fed. Cir. 1999); Chiuminatta, 145 F.3d at 1303. 113. E.g., Donaldson, 16 F.3d at 1193–94; In re Bond, 910 F.2d 831, 833. 114. E.g., Donaldson, 16 F.3d at 1193–94; In re Bond, 910 F.2d 831, 833. 115. Bonito Boats, Inc. v. Thunder Craft Boats, Inc., 489 U.S. 141, 158–159 (1989); SmithKline Beecham Corp. v. Apotex Corp., 439 F.3d 1312, 1315 (Fed. Cir. 2006).

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long recognized the appropriateness of such claims.116 The original purpose of product-by-process claims was to allow inventors to claim “an otherwise patentable product that resists definition by other than the process by which it is made.”117 Thus, the original intention behind product-by-process claims was to prevent an inventor from being foreclosed from the benefits of the patent system simply because her or his product was difficult to describe in words, or its structure was insufficiently understood.118 “Today, however, product-by-process claims are used by inventors even if the invention could have been described independent of the process.”119 2. Construing Product-by-Process Claims for Determining Obviousness For purposes of determining obviousness, product-by-process claims are construed based only on the product, and not on the process limitations. As explained by the Federal Circuit in SmithKline Beecham v. Apotex: Regardless of how broadly or narrowly one construes a product-by-process claim, it is clear that such claims are always to a product, not a process. It has long been established that one cannot avoid anticipation by an earlier product disclosure by claiming the same product more narrowly, that is, by claiming the product as produced by a particular process. This was the exact issue in In re Thorpe. There, the patent concerned a composition that was used in carbonless copy paper systems. 777 F.2d at 696. The composition was known in the prior art, but was previously made using zinc dibenzoate. In a product-by-process claim, Thorpe claimed the same composition made by a process that used zinc oxide and benzoic acid, rather than zinc dibenzoate. The court upheld the PTO’s rejection of the claim. Id. at 698. It held that “if the product in a product-byprocess claim is the same as or obvious from a product of the prior art, the claim is unpatentable even though the prior product was made by a different process.”

116. 117. 118. 119.

E.g., In re Thorpe, 777 F.2d 695, 697 (Fed. Cir. 1985). Id. SmithKline, 439 F.3d at 1315. Id.; but cf. SmithKline Beecham Corp. v. Apotex Corp., 453 F.3d 1346, 1317 (Fed. Cir. 2006) (reh’g denied, reh’g en banc denied), 453 F.3d 1347 (dissenting opinions) (arguing that there should be two different types of product-by-process claims, one type for known products where the product does not need to be novel but the process limitations of the claim serve as limitations in determining infringement, and another type for products that cannot be claimed without reference to the process by which the product is made, and for which the process limitations do not serve as limitations in determining infringement); See 970 F.2d 834, rehearing en banc denied, 974 F.2d 1299 (concurring opinion), 974 F.2d 1279 (dissenting opinions) (same); Abbott Labs. v. Sandoz, Inc., 2009 U.S. App. LEXIS 10476, *106–7 (Fed. Cir. 2009) (Newman, dissenting) (same); Abbott, 2009 U.S. App. LEXIS 10476, *107– 10 (Lourie, dissenting) (same).

Practice Points Id. at 697. In re Thorpe has never been overruled and has been followed for many years by the PTO. The current [Manual of Patent Examining Procedure] states: “[Even] though product-by-process claims are limited by and defined by the process, determination of patentability is based on the product itself. The patentability of a product does not depend on its method of production. If the product in the product-by-process claim is the same as or obvious from a product of the prior art, the claim is unpatentable even though the prior product was made by a different process.” MPEP § 2113 (8th ed., Rev. 2, May 2004) (quoting In re Thorpe, 777 F.2d at 698).120

As discussed in Chapter 2, Section [V][G][2],121 product-by-process claims are construed differently for infringement and for anticipation. When construing product-by-process claims for infringement (both literal and under the doctrine of equivalents),122 the process steps in the claims serve as limitations.123 Therefore, a product-by-process claim is infringed only by a product that is made by a process that is the same as, or equivalent to, the process limitations in the claim.124 This applies to all product-by-process claims, regardless of whether the product could be claimed without reference to the process by which it is made.125 Product-by-process claims may be the only U.S. patent claims that are construed differently for infringement and for validity.126

XI. Practice Points A. Claim Construction Is Always Required As reiterated throughout this book, claim construction is required whenever evaluating or opining on any matter related to a patent’s claims, including determining claim validity based on Section 103 (obviousness). The process of determining claim validity under Section 103 involves first objectively construing a patent’s claims independent of the prior art, then applying the teaching of the prior art to the construed claims.

120. Id. 121. Discussing claim construction for product-by-process claims. 122. See Chapter 3, Section V[B] (discussing literal infringement of product-by-process claims) and Chapter 4, Section III[F] (discussing infringement of product-by-process claims under the doctrine of equivalents). 123. Abbott Labs. v. Sandoz, Inc., 2009 U.S. App. LEXIS 10476, *26–27 (Fed. Cir. 2009) (en banc in relevant part). 124. Id. at *28. 125. Id. at *31–32. 126. Id. at *100 (Newman, dissenting) (“For the first time, claims [product-by-process claims] are construed differently for validity and for infringement.”).

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Claim construction is also important in determining issues such as indicia of nonobviousness (secondary considerations). In order for a secondary consideration to have an affect on an obviousness determination, there must be a nexus between the secondary factor and the claims. For example, if the secondary factor is commercial success, there must be a nexus between the subject matter sold and the claimed subject matter. It is not possible to make such a determination without first construing the claims, then comparing them with the commercially sold subject matter.

B. Obviousness Applies Whenever There Is No Anticipation As discussed in Chapters 6 and 7, anticipation only occurs when a prior art reference or event contains every limitation of a claim, either explicitly or inherently. If there is any variance between the disclosure of a prior art reference or event and a patent’s claim, the claim may be obvious, but cannot be anticipated. A claim is obvious where the teaching of the combined prior art, common knowledge, or the nature of the problem, viewed through the eyes of an ordinary artisan in the relevant art, would have made the claimed subject matter obvious at the time of the invention.

C. The Graham Factors Obviousness is determined by applying four “basic factual inquires” known as the Graham factors: (a) the scope and content of the prior art; (b) the differences between the prior art and the claimed subject matter; (c) the level of ordinary skill in the pertinent art; and (d) the objective indicia of nonobviousness.

D. Prior Art Used For Obviousness Must Qualify as Prior Art Under Section 102 Prior art for purposes of determining obviousness must be prior art to a patent under 35 U.S.C. § 102. Further, in order to be prior art to a patent under Section 103, Section 102 prior art must be publicly accessible prior art, or if not publicly accessible, must be known to the inventor. Thus, prior art for Section 103 purposes includes the publically accessible prior art of Sections 102(a), (b), (e), and (g). Further, prior art for Section 103 purposes also includes art that is not publically accessible, such as certain art under Sections 102(g) or (f), but that is known to the inventor.

Practice Points

E. Prior Art That Qualifies Only Under Sections 102(e), (g), or (f) Is Not Prior Art Under Section 103 Where the Art and the Patent Being Analyzed Were Owned by the Same Person at the Time the Invention Was Made Section 103(c) provides that prior art that qualifies only under Sections 102(e), (g), or (f) is not prior art under Section 103 where the art and the patent being analyzed were owned by the same company at the time the invention was made. The purpose of Section 103(c) is to avoid the invalidation of patents under Section 103 on the basis of work of fellow employees of the same company engaged in team research.

F. Prior Art Must Be Analogous Prior Art to Be Combined for Section 103 In order to combine two or more prior art references under Section 103, the references must be analogous prior art. Prior art is analogous if: (a) the art is from the same field of endeavor, regardless of the problem addressed; or (b) if the reference is not within the field of the inventor’s endeavor, but the reference is still reasonably pertinent to the particular problem with which the inventor is involved.

G. Prior Art Need Not Be Enabled for Section 103: It Is Art for All It Discloses Unlike prior art for Section 102 anticipation, which must enable in order to anticipate, there is no enablement requirement for prior art under Section 103. For purposes of Section 103, prior art is considered for everything it discloses, regardless of what it enables.

H. The Teaching, Suggestion, Motivation Test (TSM Test) for Combining Prior Art for Section 103 Is but One of Many Tests; There Is No Requirement for Prior Art to Provide an Explicit Teaching, Suggestion, or Motivation to Combine In combining prior art for purposes of Section 103, there is no rigid requirement of an explicit teaching, suggestion, or motivation in the art. However, to combine prior art references for Section 103, there must be some evidence as

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to why one of ordinary skill in the pertinent art would combine them. This evidence can come from the prior art references, the common knowledge in the art, or the nature of the problem as viewed through the eyes of an ordinary artisan.

I. Prior Art References May Be Combined for Section 103 on the Basis of Obvious to Try or a Reasonable Expectation of Success There is no prohibition of a court finding a claim to be obvious over a combination of prior art references that disclose the subject matter that would have been obvious to try, or where there would have been a reasonable expectation of success. In such a case, a claimed invention is not patentable under Section 103 if the result of the obvious-to-try combination is the success that one of skill in the art would reasonably have expected. However, evidence of unexpected results is an indicia of nonobviousness.

J. Teaching Away—Unexpected Success References that expressly teach away from combining under Section 103 to make a claimed invention are evidence against obviousness based on the combination of the references. Unexpected success from combinations of references that teach away from combination under Section 103 is further evidence against obviousness.

K. Statements by the Patentee About Prior Art Are Binding on the Patentee for Purposes of Obviousness When, for example, a patent specification describes prior art, that description is considered an admission of the teaching of the prior art. Therefore, a patentee cannot later claim that prior art teaches something different in order to argue against a Section 103 position based on the “admitted” teaching of the prior art.

L. For Determining Obviousness, Courts Must Define the Level of Ordinary Skill in the Pertinent Art In order to determine whether subject matter would have been obvious under the Graham factors, a court must define the level of ordinary skill in the pertinent art and base its analysis upon that level of skill.

Practice Points

M. One of Ordinary Skill in the Pertinent Art Is an Objective Fiction; the Actual Inventor’s Skill or Expectations Play No Part in an Obviousness Inquiry Determining whether an invention would have been obvious to one of ordinary skill in the pertinent art is a completely objective process. An actual inventor’s level of skill, expectations, and the like play no role in this determination.

N. A Court Must Consider Evidence of Nonobviousness, but a Strong Position of Obviousness May Not Be Overcome by Any Level of Such Evidence Under the U.S. Supreme Court’s Graham case, courts must consider evidence of nonobviousness when determining whether a claimed invention would have been obvious. Indicia of nonobviousness include evidence of commercial success, unexpected results, failure of others, long felt need in the art, copying by others, and the like. However, even the strongest evidence of nonobviousness may not overcome a strong position of obviousness.

O. There Must Be a Nexus between Evidence of Nonobviousness and the Claimed Invention Evidence of nonobviousness must have a nexus with the claimed subject matter. For example, in order to counter a position of obviousness based on commercial success, there must be a nexus between evidence of commercial success and the claimed invention.

P. Be Aware of Special Rules for Means-Plus-Function Claims When evaluating potential obviousness, it is important to be aware of the possibility of means-plus-function claims. These are explained in this chapter and in detail in Chapter 2 (e.g., Chapter 2 provides detailed guidance on determining whether a claim is written in means-plus-function format, an issue that is often hotly contested between a patentee and a party challenging the patent). As discussed above, claim construction of means-plus-function claims includes both the structures that are explicitly set forth in a patent’s specification as corresponding to the claimed “means,” as well as “equivalents” of those structures as defined by 35 U.S.C. § 112, Paragraph 6. Thus, a determination of obviousness of means-plus-function claims is perhaps the only time that potentially invalidating subject matter is compared with claim scope

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that includes “equivalents” of subject matter that is literally disclosed and claimed in a patent.

Q. Obviousness of Product-by-Process Claims Is Based Solely on the Product, Not the Process For purposes of determining obviousness, product-by-process claims are treated as if they were purely product claims. Thus, a product-by-process claim is obvious if the product of the claim, regardless of how it was made, would be obvious. The process limitations in the claim have no bearing on an obviousness inquiry.

CHAP T ER

9 Patent Law Principle III: Validity Other Forms of Invalidity

I. Overview of Patent Validity/Invalidity

347

II. Enablement, 35 U.S.C. § 112, First Paragraph

348

A. The Full Scope of the Claimed Subject Matter Must Be Enabled

349

B. The Wands Factors

349

C. The Date of Enablement Is the Filing Date of the Patent Application

350

D. The Specification Need Not Provide What Was Known in the Art

350

E. The Specification Must Enable the Novel Subject Matter

351

F. It Is Not Sufficient to Enable Only One Embodiment of a Claimed Invention When Broader Subject Matter Is Claimed

351

G. There Is No Presumption Related to Failure of the Patent Office to Issue an Enablement Rejection

353

H. Teaching Away in the Specification Is Strong Evidence Against Enablement

353

III. Written Description, 35 U.S.C. § 112, First Paragraph

354

A. The Written Description Is a Separate Requirement from Enablement

354

B. One Must Describe the Subject Matter Claimed Such That One Skilled in the Art Would Recognize That the Patentee Was in Possession of the Claimed Invention When the Patent Application Was Filed

356

C. No Particular Form of Description Is Required, But the Specification Must Describe What Was Invented

357

D. The Written Description Requirement Is Not Satisfied by What Would Have Been Obvious from the Specification

358

343

344

Chapter 9 Patent Law Principle III: Validity E. The Material Must Necessarily Be Present in the Specification, Explicitly or Inherently

358

F. Courts Have Recognized the U.S. Patent Office’s Written Description Guidelines

359

G. A Genus Must Be Described by a Representative Number of Species

359

H. There Is No “Essential Element” Requirement for Written Description

361

I. An Illustrative Example of the Written Description Requirement

362

IV. Best Mode, 35 U.S.C. § 112, First Paragraph

364

A. The Two-Prong Analysis

365

B. The Best Mode Requirement Applies to the Claimed Invention

366

C. Failure to Disclose the Preferred Embodiment

368

D. Best Mode Does Not Apply to “Production Details,” Including Commercial Considerations, or to “Routine Details” Apparent to One of Ordinary Skill in the Art

369

E. Summary

370

V. Indefiniteness, 35 U.S.C. § 112, Second Paragraph

371

A. The Definiteness Requirement Satisfies the Requirement That a Patent Give Public Notice of the Metes and Bounds of the Claimed Subject Matter

371

B. A Patent’s Claims Are Presumed Valid, and Indefiniteness Must Be Proven by Clear and Convincing Evidence

372

C. The Definiteness Requirement Does Not Compel Absolute Clarity

373

D. Claims Are Not Indefinite Merely Because They Present a Difficult Task of Claim Construction

373

E. The Standard Rules of Claim Construction Apply to Determining Claim Definiteness

374

1. The Specification Must Be Considered

374

2. The Patent’s Prosecution History Must Be Considered

374

3. Extrinsic Evidence May Be Considered in Limited Ways

375

Patent Law Principle III: Validity F. Indefiniteness in the Context of Lack of Structure for Means-Plus-Function Claims

375

1. Means-Plus-Function Claims

376

2. To Comply with Section 112, Second Paragraph (Definiteness), a Means-Plus-Function Claim Must Have a Definite Structure in the Specification Associated with the Claimed Means Term

376

G. Examples of Federal Circuit Definiteness Decisions

377

VI. Patent-Eligible Subject Matter: Statutory Subject Matter (35 U.S.C. § 101) and Supreme Court Precedent

378

A. Business Method Patents as an Example of a Section 101 Analysis (In re Bilski) VII. Practice Points

379 383


383

B. Invalidity as Opposed to Unenforceability

383

C. Section 112 of the U.S. Patent Statute (35 U.S.C. § 112) Contains at Least Four Separate Bases of Invalidity: Enablement (Section 112, First Paragraph), Written Description (Section 112, First Paragraph), Best Mode (Section 112, First Paragraph), and Definiteness (Section 112, Second Paragraph)

383

D. Enablement Must Teach One Skilled in the Art to Practice the Full Scope of the Claimed Invention Without Undue Experimentation

384

E. Use the Wands Factors for Evaluating Enablement

384

F. Enablement Is Evaluated at the Effective Filing Date of the Patent’s Application

384

G. A Specification Need Not Teach What Was Known in the Art

384

H. A Specification Must Enable the Novel Subject Matter

385

I. Generally It Is Not Sufficient to Enable Only One Embodiment Where the Claims Cover More than One Embodiment

385

J. There Is No Presumption Related to Failure of the Patent Office to Issue an Enablement Rejection

385

K. Evidence of Teaching Away from a Claimed Invention in a Patent’s Specification Is Strong Evidence of Lack of Enablement

385

345

346

Chapter 9 Patent Law Principle III: Validity L. The Enablement Requirement Focuses on Whether the Specification Teaches One of Skill in the Art to Practice the Claimed Invention; Written Description Requires That a Patent’s Specification Describe the Invention Such That It Is Clear That the Patentees Possessed the Claimed Invention at the Time the Application Was Filed

386

M. Written Description Requires No Specific Form of Description

386

N. Subject Matter That Is Only Obvious from a Specification Is Not Described Sufficiently to Satisfy the Written Description Requirement

386

O. The Specification Must Describe, Explicitly or Inherently, Every Claim Limitation

386

P. A Genus Must Be Described by a Representative Number of Species

387

Q. Compliance with the Best Mode Requirement Is Based on a Two-Prong Analysis

387

R. Best Mode Relates to the Claimed Invention

387

S. Failure to Disclose the Preferred Embodiment Is a Violation of the Best Mode Requirement

387

T. Claims Are Not Indefinite Merely Because They Are Difficult to Construe

387

U. The Rules of Claim Construction Are Applied in Determining Definiteness

388

V. Means-Plus-Function Claims Are Indefinite Under Section 112, Second Paragraph, if the Specification Does Not Describe a Structure for Performing the Claimed Function

388

W. Section 101 and U.S. Supreme Court Precedent Define Patent-Eligible Subject Matter

388

Overview of Patent Validity/Invalidity

Usage Note: This chapter covers forms of patent invalidity other than anticipation (35 U.S.C. § 102) and obviousness (35 U.S.C. § 103). Chapters 6 and 7 cover anticipation, and Chapter 8 covers obviousness. Additionally, Chapter 10 concerns patent enforceability. In keeping with the importance of claim construction to virtually every patent-related issue, claim construction is required to determine invalidity under the laws discussed in this chapter. Therefore, Chapter 2, which covers claim construction, is of particular relevance to this chapter.

I. Overview of Patent Validity/Invalidity Patent validity is primarily based on certain sections of the U.S. Patent Statute (Title 35 of the U.S. Code (i.e., 35 U.C.S.) that define what types of subject matter are patentable (Section 101),1 when subject matter is considered to be unpatentable for anticipation (lack of novelty) (Section 102),2 when subject matter is considered to be unpatentable for being obvious (Section 103),3 when a patent’s specification sufficiently enables and describes claimed subject matter (Section 112, first paragraph),4 and when a patent’s claims describe patentable subject matter with sufficient definiteness (Section 112, second paragraph).5 Because issued U.S. patents have been examined by the U.S. Patent Office for patentability, there is a legal presumption that the claims of an issued U.S. patent are valid.6 As explained by the Federal Circuit: “An issued patent enjoys a presumption of validity. Thus, a party challenging patent validity has the burden to prove its case with clear and convincing evidence.”7 Invalidity must be determined on a claim-by-claim basis, and a finding that one claim of a patent is invalid has no effect on the other clams8 as “[a]ll claims are ‘presumed valid independently of the validity of the other claims.’ ”9 It is important not to confuse patent validity with patent enforceability, which is discussed in Chapter 10. In fact, a patent’s claims may be valid but unenforceable.10 Patent enforceability is a non-statutory extension of the

1. 2. 3. 4. 5. 6. 7. 8. 9.

35 U.S.C.S. § 101 (2009). 35 U.S.C.S. § 102 (2009). 35 U.S.C.S. § 103 (2009). 35 U.S.C.S. § 112, P 1 (2009). 35 U.S.C.S. § 112, P 2 (2009). 35 U.S.C.S. § 282 (2009). Impax Labs., Inc. v. Aventis Pharms. Inc., 545 F.3d 1312, 1314 (Fed. Cir. 2008). 35 U.S.C.S. § 282 (2009). Sandt Tech., Ltd. v. Resco Metal & Plastics Corp., 264 F.3d 1344, 1356 (Fed. Cir. 2001) (quoting 35 U.S.C. § 282). 10. Bard. Inc. v. M3 Sys., Inc., 157 F.3d 1340, 1372 (Fed. Cir. 1998) (“Patent misuse arises in equity, and a holding of misuse renders the patent unenforceable until the misuse is purged; it does not, of itself, invalidate the patent.”).

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equitable doctrine of “unclean hands,” whereby a court will not lend its support to enforcement of a patent that has been obtained through fraud on the Patent Office (also known as inequitable conduct); it also includes situations in which an issued patent has been misused.11 Unlike validity, which is decided on a claim-by-claim basis, when a patent is held to be unenforceable, the entire patent is unenforceable.12

II. Enablement, 35 U.S.C. § 112, First Paragraph Section 112, first paragraph of the U.S. Patent Statute (35 U.S.C. § 112, P 1) sets forth the enablement requirement as follows: The specification shall contain a written description of the invention, and of the manner and process of making and using it, in such full, clear, concise, and exact terms as to enable any person skilled in the art to which it pertains, or with which it is most nearly connected, to make and use the same, and shall set forth the best mode contemplated by the inventor of carrying out his invention.13

In a number of cases, the Federal Circuit has explained that the enablement requirement of Section 112, first paragraph, is a separate requirement of patentability from the written description requirement, which is also statutorily based in Section 112, first paragraph (and is discussed below). For example, in Carnegie Mellon, the Federal Circuit indicated: [P]aragraph 1 of § 112 requires a written description of the invention—a requirement separate and distinct from the enablement requirement. Vas-Cath Inc. v. Mahurkar, 935 F.2d 1555, 1563 (Fed. Cir. 1991); see Festo Corp. v. Shoketsu Kinzoku Kogyo Kabushiki Co., Ltd., 535 U.S. 722, 736, 122 S. Ct. 1831, 152 L. Ed. 2d 944 (2002) (noting that “a number of statutory requirements must be satisfied before a patent can issue” including that the patent application “describe, enable, and set forth the best mode of carrying out the invention”) (emphasis added); see also In re Curtis, 354 F.3d 1347, 1357 (Fed. Cir. 2004) (“We interpret 35 U.S.C. § 112, P 1 to require a written description requirement separate and apart from the enablement requirement.”); In re Ruschig, 379 F.2d 990 (C.C.P.A. 1967)

11. E.g., Qualcomm Inc. v. Broadcom Corp., 548 F.3d 1004, 1025–26 (Fed. Cir. 2008); Cargill, Inc. v. Canbra Foods, Ltd., 476 F.3d 1359, 1363–64 (Fed. Cir. 2007). 12. E.g., Qualcomm, 548 F.3d at 1025–26 (Fed. Cir. 2008). 13. 35 U.S.C.S. § 112, P 1 (emphasis added).

Enablement, 35 U.S.C. § 112, First Paragraph 349 (holding that the written description requirement is a requirement separate from enablement under 35 U.S.C. § 112, paragraph 1).14

A. The Full Scope of the Claimed Subject Matter Must Be Enabled “The ‘enablement requirement is satisfied when one skilled in the art, after reading the specification, could practice the claimed invention without undue experimentation.’ ”15 In addition: “The full scope of the claimed invention must be enabled.”16 As explained by the Federal Circuit: The rationale for this statutory requirement is straightforward. Enabling the full scope of each claim is “part of the quid pro quo of the patent bargain.” AK Steel, 344 F.3d at 1244. A patentee who chooses broad claim language must make sure the broad claims are fully enabled. “The scope of the claims must be less than or equal to the scope of the enablement” to “ensure[] that the public knowledge is enriched by the patent specification to a degree at least commensurate with the scope of the claims.” Nat’l Recovery Techs., Inc. v. Magnetic Separation Sys., Inc., 166 F.3d 1190, 1195–96 (Fed. Cir. 1999).17

B. The Wands Factors In In re Wands, the Federal Circuit, noted that “[w]hether undue experimentation is needed is not a single, simple factual determination, but rather is a conclusion reached by weighing many factual considerations.”18 The court then set forth a series of “[f]actors to be considered in determining whether a disclosure would require undue experimentation[.]”19 These factors, now referred to as the Wands factors, have gained wide acceptance by the Federal Circuit and district courts. The Wands factors include: (1) the quantity of experimentation necessary, (2) the amount of direction or guidance presented, (3) the presence or absence of working examples, (4) the

14. Carnegie Mellon Univ. v. Hoffmann La Roche Inc., 541 F.3d 1115, 1121 (Fed. Cir. 2008) (emphasis in original). 15. E.g., Sitrick v. Dreamworks, LLC, 516 F.3d 993, 999 (Fed. Cir. 2008) (quoting AK Steel Corp. v. Sollac, 344 F.3d 1234, 1244 (Fed. Cir. 2003)). 16. E.g., Sitrick, 516 F.3d at 999; Auto. Techs. Int’l, Inc. v. BMW of N. Am., Inc., 501 F.3d 1274, 1285 (Fed. Cir. 2007). 17. Sitrick, 516 F.3d at 999 (bracketing in original). 18. In re Wands, 858 F.2d 731, 737 (Fed. Cir. 1988). 19. Id.

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Chapter 9 Patent Law Principle III: Validity nature of the invention, (5) the state of the prior art, (6) the relative skill of those in the art, (7) the predictability or unpredictability of the art, and (8) the breadth of the claims.20

While the Wands factors are widely used, the Federal Circuit has held that “it is not necessary that a court review all the Wands factors to find a disclosure enabling. They are illustrative, not mandatory. What is relevant depends on the facts. . . .”21

C. The Date of Enablement Is the Filing Date of the Patent Application “Enablement is determined from the viewpoint of persons of skill in the field of the invention at the time the patent application was filed.”22

D. The Specification Need Not Provide What Was Known in the Art As explained by the Federal Circuit, “a patent need not teach, and preferably omits, what is well known in the art.”23 The Federal Circuit has further stated: [The enablement requirement] is not to say that the specification itself must necessarily describe how to make and use every possible variant of the claimed invention, for the artisan’s knowledge of the prior art and routine experimentation can often fill gaps, interpolate between embodiments, and perhaps even extrapolate beyond the disclosed embodiments, depending upon the predictability of the art. See Genentech, Inc. v. Novo Nordisk A/S, 108 F.3d 1361, 1366 (Fed. Cir. 1997) (“[A] specification need not disclose what is well known in the art.”); see also Wands, 858 F.2d at 736–37 (“Enablement is not precluded by some experimentation, such as routine screening”).24

20. 21. 22. 23.

Id. Amgen, Inc. v. Chugai Pharmaceutical Co., 927 F.2d 1200, 1213 (Fed. Cir. 1991). E.g., Ajinomoto Co. v. Archer-Daniels-Midland Co., 228 F.3d 1338, 1345 (Fed. Cir. 2000). Hybritech, Inc. v. Monoclonal Antibodies, Inc., 802 F.2d 1367, 1384 (Fed. Cir. 1986); Ajinomoto, 228 F.3d at 1345. 24. AK Steel Corp. v. Sollac, 344 F.3d 1234, 1244 (Fed. Cir. 2003).

Enablement, 35 U.S.C. § 112, First Paragraph 351

E. The Specification Must Enable the Novel Subject Matter In Automotive Technologies, the Federal Circuit indicated: In Genentech, Inc. v. Novo Nordisk A/S, 108 F.3d 1361, 1366 (Fed. Cir. 1997), we stated: “It is the specification, not the knowledge of one skilled in the art, that must supply the novel aspects of an invention in order to constitute adequate enablement.” Although the knowledge of one skilled in the art is indeed relevant, the novel aspect of an invention must be enabled in the patent. . . . As we stated in Genentech, the rule that a specification need not disclose what is well known in the art is “merely a rule of supplementation, not a substitute for a basic enabling disclosure.” 108 F.3d at 1366. We further stated that the “omission of minor details does not cause a specification to fail to meet the enablement requirement. However, when there is no disclosure of any specific starting material or of any of the conditions under which a process can be carried out, undue experimentation is required.”25

The Automotive Technologies court concluded that a patent’s claims were invalid for lack of enablement because the novel aspects of a claimed invention were not sufficiently taught in the specification.26 The court noted: As was the case in Genentech, the specification [here] provides “only a starting point, a direction for further research” on [the claimed technology]; it does not provide guidance to a person of ordinary skill in the art on how to make or use [the claimed technology]. The specification fails to provide “reasonable detail” sufficient to enable use of [the claimed technology].27

F. It Is Not Sufficient to Enable Only One Embodiment of a Claimed Invention When Broader Subject Matter Is Claimed The Federal Circuit has clearly held that it is not sufficient for the specification to enable only one embodiment of the claimed invention when broader scope is claimed. As the Federal Circuit indicated in Automotive Technologies: We also reject ATI’s argument that because the specification enables one mode of practicing the invention, viz., mechanical side impact sensors, the enablement

25. Auto. Techs. Int’l, Inc. v. BMW of N. Am., Inc., 501 F.3d 1274, 1283–84 (Fed. Cir. 2007) (emphasis added). 26. Id. at 1284–85. 27. Id. (quoting Genentech, Inc. v. Novo Nordisk A/S, 108 F.3d 1361, 1366 (Fed. Cir. 1997)).

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Chapter 9 Patent Law Principle III: Validity requirement is satisfied. We addressed and rejected a similar argument made in Liebel-Flarsheim Co. v. Medrad, Inc., 481 F.3d 1371 (Fed. Cir. 2007). In that case, the invention was a front-loading fluid injector system with a replaceable syringe capable of withstanding high pressure for delivering a contrast agent to a patient. Id. at 1373. We construed the asserted claims, as urged by the patentee, to include an injector with and without a pressure jacket. Although the specification clearly enabled an injector with a pressure jacket, we concluded that it did not enable an injector without such a jacket and that the claims were invalid for lack of enablement. Id. at 1379. We stated that there “must be ‘reasonable enablement of the scope of the range’ which, in this case, includes both injector systems with and without a pressure jacket.” Id. at 1380 (internal citation omitted).28

In fact, the Federal Circuit has explained that the desire of a patent applicant to obtain the broadest claims possible in prosecution can lead to their invalidity for lack of enablement because the allowed claims may be broader than the specification’s enablement.29 The court has noted that this is particularly common regarding the enablement of fewer embodiments than are claimed. As discussed by the court: We stated in Liebel: “The irony of this situation is that Liebel successfully pressed to have its claims include a jacketless system, but, having won that battle, it then had to show that such a claim was fully enabled, a challenge it could not meet.” Id. at 1380. ATI sought to have the scope of the claims of the ’253 patent include both mechanical and electronic side impact sensors. It succeeded, but then was unable to demonstrate that the claim was fully enabled. Claims must be enabled to correspond to their scope.30

On the other hand, the Federal Circuit has also held: [I]t is not necessary that a patent applicant test all the embodiments of his invention, In re Angstadt, 537 F.2d 498, 502 (CCPA 1976); what is necessary is that he provide a disclosure sufficient to enable one skilled in the art to carry out the invention commensurate with the scope of his claims.31

28. 29. 30. 31.

Auto. Techs., 501 F.3d at 1285 (emphasis added). Id. Id. Amgen, Inc. v. Chugai Pharmaceutical Co., 927 F.2d 1200, 1213 (Fed. Cir. 1991) (emphasis added).

Enablement, 35 U.S.C. § 112, First Paragraph 353

G. There Is No Presumption Related to Failure of the Patent Office to Issue an Enablement Rejection All “issued patent[s] enjoy[] a presumption of validity. Thus, a party challenging patent validity has the burden to prove its case with clear and convincing evidence.”32 However, the Federal Circuit has instructed that there is no presumption related to failure of the Patent Office to issue an enablement rejection: Finally, we dispel the notion that the failure of the PTO to issue an enablement rejection automatically creates an “especially weighty presumption” of compliance with 35 U.S.C. § 112. AK Steel cites language in Brooktree Corp. v. Advanced Micro Devices, Inc., 977 F.2d 1555, 1574–75 (Fed. Cir. 1993), to that effect. However, whether a patent complies with the enablement requirement depends upon a factually intensive inquiry regarding the amount of experimentation required, see Wands, 858 F.2d at 737, an issue to be evaluated on a case-by-case basis. Indeed, the presumption is far from determinative, and we have on occasion invalidated patent claims as not having been enabled, despite the PTO’s having allowed those claims. E.g., Genentech, 108 F.3d at 1368. This is another such case. The specification here itself plainly tells us that [one of the claimed embodiments] is not enabled.33

H. Teaching Away in the Specification Is Strong Evidence Against Enablement In AK Steel, the Federal Circuit addressed a situation in which a patent’s specification taught against the claimed subject matter. The court held: We conclude that the specification is inadequate as a matter of law in that regard primarily because it expressly teaches against it. Worse than being silent as to that aspect of the invention, the specification clearly and strongly warns that such an embodiment would not wet well. In particular, the specification warns that silicon content above 0.5% in the aluminum coating causes coating problems. Such a statement discourages experimentation with coatings having more than 0.5% silicon, undue or otherwise. It tells the public that higher amounts of silicon will not work. Nothing further need be said about the matter.34

32. Impax Labs., Inc. v. Aventis Pharms. Inc., 545 F.3d 1312, 1314 (Fed. Cir. 2008). 33. AK Steel Corp. v. Sollac, 344 F.3d 1234, 1244 (Fed. Cir. 2003). 34. Id.

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III. Written Description, 35 U.S.C. § 112, First Paragraph Section 112, paragraph one, of the U.S. Patent Statute (35 U.S.C. § 112, P 1) sets forth the written description requirement as follows: The specification shall contain a written description of the invention, and of the manner and process of making and using it, in such full, clear, concise, and exact terms as to enable any person skilled in the art to which it pertains, or with which it is most nearly connected, to make and use the same, and shall set forth the best mode contemplated by the inventor of carrying out his invention.35

Patent claims are invalid when they are not properly described under the written description requirement of Section 112, first paragraph.36 For example, the Federal Circuit has stated: The basic function of a patent specification is to disclose an invention. It has long been the case that a patentee “can lawfully claim only what he has invented and described, and if he claims more his patent is void.” . . . Accordingly, because the specifications of the ’708, ’745, and ’270 patents fail to provide adequate written description support for the appealed claims . . . we affirm the district court’s grant of summary judgment of invalidity.37

Further, the Federal Circuit has explained: The written description serves a quid pro quo function “in which the public is given ‘meaningful disclosure in exchange for being excluded from practicing the invention for a limited period of time.’ ” Univ. of Rochester v. G.D. Searle & Co., Inc., 358 F.3d 916, 922 (Fed. Cir. 2004) (quoting Enzo Biochem, Inc. v. Gen-Probe Inc., 323 F.3d 956, 970 (Fed. Cir. 2002)).38

A. The Written Description Is a Separate Requirement from Enablement As explained by the Federal Circuit in a number of cases, the written description requirement of Section 112, first paragraph, is a separate requirement of

35. 35 U.S.C.S. § 112, P 1 (2009) (emphasis added). 36. E.g., Carnegie Mellon Univ. v. Hoffmann La Roche Inc., 541 F.3d 1115, 1122, 1128 (Fed. Cir. 2008). 37. Id. at 1122, 1128 (quoting O’Reilly v. Morse, 56 U.S. (15 How.) 62, 121, 14 L. Ed. 601 (1853)) (emphasis in original). 38. E.g., id. at 1122; Univ. of Rochester v. G.D. Searle & Co., 358 F.3d 916, 922 (Fed. Cir. 2004).

Written Description, 35 U.S.C. § 112, First Paragraph 355

patentability from the enablement requirement, which is also statutorily based in Section 112, first paragraph.39 For example, in Carnegie Mellon the Federal Circuit stated: [P]aragraph 1 of § 112 requires a written description of the invention—a requirement separate and distinct from the enablement requirement. Vas-Cath Inc. v. Mahurkar, 935 F.2d 1555, 1563 (Fed. Cir. 1991); see Festo Corp. v. Shoketsu Kinzoku Kogyo Kabushiki Co., Ltd., 535 U.S. 722, 736, 122 S. Ct. 1831, 152 L. Ed. 2d 944 (2002) (noting that “a number of statutory requirements must be satisfied before a patent can issue” including that the patent application “describe, enable, and set forth the best mode of carrying out the invention”) (emphasis added); see also In re Curtis, 354 F.3d 1347, 1357 (Fed. Cir. 2004) (“We interpret 35 U.S.C. § 112, P 1 to require a written description requirement separate and apart from the enablement requirement.”); In re Ruschig, 379 F.2d 990 (C.C.P.A. 1967) (holding that the written description requirement is a requirement separate from enablement under 35 U.S.C. § 112, paragraph 1).40

As held by the Federal Circuit in Vas-Cath: This court in Wilder (and the CCPA before it) clearly recognized, and we hereby reaffirm, that 35 U.S.C. § 112, first paragraph, requires a “written description of the invention” which is separate and distinct from the enablement requirement. The purpose of the “written description” requirement is broader than to merely explain how to “make and use”; the applicant must also convey with reasonable clarity to those skilled in the art that, as of the filing date sought, he or she was in possession of the invention. The invention is, for purposes of the “written description” inquiry, whatever is now claimed.41

Finally, as explained by the court in University of Rochester: Although there is often significant overlap between the three requirements, they are nonetheless independent of each other. In re Alton, 76 F.3d 1168, 1172 (Fed. Cir. 1996). Thus, an invention may be described without an enabling disclosure of how to make and use it. A description of a chemical compound without a description of how to make and use it, unless within the skill of one of ordinary skill in the art, is an example. Moreover, an invention may be enabled even though it has not been described. See, e.g., In re Di Leone, 436 F.2d 1404,

39. E.g., Carnegie Mellon, 541 F.3d at 1121; Univ. of Rochester v. G.D. Searle & Co., 358 F.3d 916, 920–22 (Fed. Cir. 2004); Vas-Cath Inc. v. Mahurkar, 935 F.2d 1555, 1563–64 (Fed. Cir. 1991). 40. Carnegie Mellon, 541 F.3d at 1121 (emphasis in original). 41. Vas-Cath, 935 F.2d at 1563–64 (emphasis in original).

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Chapter 9 Patent Law Principle III: Validity 1405 (CCPA 1971) (“It is possible for a specification to enable the practice of an invention as broadly as it is claimed, and still not describe that invention”). Such can occur when enablement of a closely related invention A that is both described and enabled would similarly enable an invention B if B were described. A specification can likewise describe an invention without enabling the practice of the full breadth of its claims. Finally, still further disclosure might be necessary to satisfy the best mode requirement if otherwise only an inferior mode would be disclosed. Spectra-Physics, Inc. v. Coherent, Inc., 827 F.2d 1524, 1535 (Fed. Cir. 1987).42

B. One Must Describe the Subject Matter Claimed Such That One Skilled in the Art Would Recognize That the Patentee Was in Possession of the Claimed Invention When the Patent Application Was Filed As repeatedly held by the Federal Circuit, the essence of the written description requirement is to describe the claimed subject matter such that one of skill in the art would recognize that the patentee invented what was claimed and was in possession of the claimed invention when the patent application was filed.43 The court has stated: To satisfy the written description requirement, “the applicant does not have to utilize any particular form of disclosure to describe the subject matter claimed, but the description must clearly allow persons of ordinary skill in the art to recognize that he or she invented what is claimed.” In re Alton, 76 F.3d 1168, 1172 (Fed. Cir. 1996) (citing In re Gosteli, 872 F.2d 1008, 1012 (Fed. Cir. 1989)) (quotations omitted). In other words, the applicant must “convey with reasonable clarity to those skilled in the art that, as of the filing date sought, he or she was in possession of the invention,” Vas-Cath Inc., 935 F.2d at 1563–64, and demonstrate that by disclosure in the specification of the patent.44

Further, the Federal Circuit noted in Poweroasis: To satisfy the written description requirement the disclosure of the prior application must “convey with reasonable clarity to those skilled in the art that, as of the

42. Univ. of Rochester, 358 F.3d at 921–22. 43. E.g., id; PowerOasis, Inc. v. T-Mobile USA, Inc., 522 F.3d 1299, 1306–07 (Fed. Cir. 2008); Carnegie Mellon, 541 F.3d at 1122; Vas-Cath, 935 F.2d at 1563–64. 44. Carnegie Mellon, 541 F.3d at 1122 (emphasis added).

Written Description, 35 U.S.C. § 112, First Paragraph 357 filing date sought, [the inventor] was in possession of the invention.” Vas-Cath Inc. v. Mahurkar, 935 F.2d 1555, 1563–64 (Fed. Cir. 1991) (emphasis in original).45

C. No Particular Form of Description Is Required, But the Specification Must Describe What Was Invented The Federal Circuit has noted: To satisfy the written description requirement, “the applicant does not have to utilize any particular form of disclosure to describe the subject matter claimed, but the description must clearly allow persons of ordinary skill in the art to recognize that he or she invented what is claimed.” In re Alton, 76 F.3d 1168, 1172 (Fed. Cir. 1996) (citing In re Gosteli, 872 F.2d 1008, 1012 (Fed. Cir. 1989)) (quotations omitted).46

In University of Rochester, the Federal Circuit explained: While it is true that this court and its predecessor have repeatedly held that claimed subject matter “need not be described in haec verba” in the specification to satisfy the written description requirement, e.g., In re Smith, 481 F.2d 910, 914 (CCPA 1973), it is also true that the requirement must still be met in some way so as to “describe the claimed invention so that one skilled in the art can recognize what is claimed.” Enzo, 323 F.3d at 968. We have further explained that: The appearance of mere indistinct words in a specification or a claim, even an original claim, does not necessarily satisfy that requirement. . . . A description of an anti-inflammatory steroid, i.e., a steroid (a generic structural term) described even in terms of its function of lessening inflammation of tissues fails to distinguish any steroid from others having the same activity or function. A description of what a material does, rather than of what it is, usually does not suffice. [Regents of the Univ. of Cal. v.] Eli Lilly [& Co., Inc.], 119 F.3d [1559,] 1568 [(Fed. Cir. 1997) (“Lilly”)]. . . . The disclosure must allow one skilled in the art to visualize or recognize the identity of the subject matter purportedly described. Id. Enzo, 323 F.3d at 968. Similarly, for example, in the nineteenth century, use of the word “automobile” would not have sufficed to describe a newly invented automobile; an inventor would need to describe what an automobile is, viz., a chassis, an engine, seats, wheels on axles, etc. Thus, generalized language may not suffice if it does not convey the detailed identity of an invention.47

45. PowerOasis, 522 F.3d at 1306 (emphasis added). 46. E.g., Carnegie Mellon, 541 F.3d at 1122. 47. Univ. of Rochester, 358 F.3d at 922–23 (bracketing in original).

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D. The Written Description Requirement Is Not Satisfied by What Would Have Been Obvious from the Specification Written description requires a description of the claimed invention. It is not sufficient for missing limitations of a claimed invention to have been obvious from the specification. “Entitlement to a filing date does not extend to subject matter which is not disclosed, but would be obvious over what is expressly disclosed.” In re Huston, 308 F.3d 1267, 1277 (Fed. Cir. 2002) (quoting Lockwood v. Am. Airlines, Inc., 107 F.3d 1565, 1571–72 (Fed. Cir. 1997)). In Lockwood, we held: While the meaning of terms, phrases, or diagrams in a disclosure is to be explained or interpreted from the vantage point of one skilled in the art, all the limitations must appear in the specification. The question is not whether a claimed invention is an obvious variant of that which is disclosed in the specification. Rather, a [patent] application itself must describe an invention, and do so in sufficient detail that one skilled in the art can clearly conclude that the inventor invented the claimed invention as of the filing date sought.48

E. The Material Must Necessarily Be Present in the Specification, Explicitly or Inherently To comply with the written description requirement, a specification must describe every claim limitation, either explicitly or inherently. We have explained that to satisfy the written description requirement, “the missing descriptive matter must necessarily be present in the [original] application’s specification such that one skilled in the art would recognize such a disclosure.” Tronzo v. Biomet, Inc., 156 F.3d 1154, 1159 (Fed. Cir. 1998); see also Martin v. Mayer, 823 F.2d 500, 505 (Fed. Cir. 1987) (holding that the written description requirement is “not a question of whether one skilled in the art might be able to construct the patentee’s device from the teachings of the disclosure. . . . Rather, it is a question whether the application necessarily discloses that particular device”) (emphasis in original). This requires that the written description actually or inherently disclose the claim element. See TurboCare Div. of Demag Delaval Turbomachinery Corp. v. GE, 264 F.3d 1111, 1118–20 (Fed. Cir. 2001) (holding that to comply with the written description requirement the location of the spring must be actually or inherently disclosed; that the location may be obvious from the disclosure is not enough); Tronzo, 156 F.3d at 1159 (holding a claim

48. PowerOasis, 522 F.3d at 1306 (some citations omitted, emphasis added).

Written Description, 35 U.S.C. § 112, First Paragraph 359 invalid for failure to satisfy the written description requirement when the specification did not disclose all cup shapes literally or “inherently”).49

F. Courts Have Recognized the U.S. Patent Office’s Written Description Guidelines The Federal Circuit has recognized that the U.S. Patent Office’s written description examination guidelines can provide “an accurate description of the law by the agency responsible for examining patent applications, and thus [can be] persuasive authority, provid[ing] further guidance for determining whether the written description requirement is met.”50 Specifically, in Carnegie the court stated: The Guidelines for Examination of Patent Applications under the 35 U.S.C. § 112, P 1, “Written Description” Requirement, 66 Fed. Reg. 10–99 (Jan. 5, 2001) (“Guidelines”), which we find to be an accurate description of the law by the agency responsible for examining patent applications, and thus persuasive authority, provide further guidance for determining whether the written description requirement is met for claims drawn to a genus.51

G. A Genus Must Be Described by a Representative Number of Species “The written description requirement for a claimed genus may be satisfied through sufficient description of a representative number of species. . . . A representative number of species means that the species which are adequately described are representative of the entire genus.”52 More specifically, the Federal Circuit has stated: The Guidelines for Examination of Patent Applications under the 35 U.S.C. § 112, P 1, “Written Description” Requirement, 66 Fed. Reg. 10–99 (Jan. 5, 2001) (“Guidelines”), which we find to be an accurate description of the law by the agency responsible for examining patent applications, and thus persuasive authority, provide further guidance for determining whether the written

49. Id. at 1306–07 (emphasis in original and added). 50. Carnegie Mellon, 541 F.3d at 1124. 51. Id. (citing The Guidelines for Examination of Patent Applications under the 35 U.S.C. § 112, P 1, “Written Description” Requirement, 66 Fed. Reg. 10-99 (Jan. 5, 2001)(hereinafter “The Guidelines”)). 52. Id.

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Chapter 9 Patent Law Principle III: Validity description requirement is met for claims drawn to a genus. The Guidelines state: The written description requirement for a claimed genus may be satisfied through sufficient description of a representative number of species . . . by disclosure of relevant, identifying characteristics, i.e., structure or other physical and/or chemical properties, by functional characteristics coupled with a known or disclosed correlation between function and structure, or by a combination of such identifying characteristics, sufficient to show the applicant was in possession of the claimed genus. A “representative number of species” means that the species which are adequately described are representative of the entire genus. Thus, when there is substantial variation within the genus, one must describe a sufficient variety of species to reflect the variation within the genus. *** Satisfactory disclosure of a “representative number” depends on whether one of skill in the art would recognize that the applicant was in possession of the necessary common attributes or features of the elements possessed by the members of the genus in view of the species disclosed. For inventions in an unpredictable art, adequate written description of a genus which embraces widely variant species cannot be achieved by disclosing only one species within the genus.53

Further, in so-called “unpredictable arts” such as biotechnology, the Federal Circuit has indicated: It is well recognized that in the “unpredictable” fields of science, it is appropriate to recognize the variability in the science in determining the scope of the coverage to which the inventor is entitled. Such a decision usually focuses on the exemplification in the specification. See, e.g., Enzo Biochem, 296 F.3d at 1327–28 (remanding for district court to determine “whether the disclosure provided by the three deposits in this case, coupled with the skill of the art, describes the genera of claims 1–3 and 5”); Lilly, 119 F.3d at 1569 (genus not described where “a representative number of cDNAs, defined by nucleotide sequence, falling within the scope of the genus” had not been provided); In re Gosteli, 872 F.2d 1008, 1012 (Fed. Cir. 1989) (two chemical compounds were insufficient description of subgenus); In re Smith, 458 F.2d 1389, 1394–95 (CCPA 1972) (disclosure of genus and one species was not sufficient description of intermediate subgenus); In re Grimme, 274 F.2d 949, 952, 1960 Dec. Comm’r Pat. 123 (CCPA 1960) (disclosure of single example and statement of scope sufficient disclosure of subgenus).

53. Id. (quoting “The Guidelines”) (some citations omitted, emphasis in original).

Written Description, 35 U.S.C. § 112, First Paragraph 361 Precedent illustrates that the determination of what is needed to support generic claims to biological subject matter depends on a variety of factors, such as the existing knowledge in the particular field, the extent and content of the prior art, the maturity of the science or technology, the predictability of the aspect at issue, and other considerations appropriate to the subject matter. See, e.g., In re Wallach, 378 F.3d 1330, 1333–34 (Fed. Cir. 2004) (an amino acid sequence supports “the entire genus of DNA sequences” that can encode the amino acid sequence because “the state of the art has developed” such that it is a routine matter to convert one to the other); University of Rochester, 358 F.3d at 925 (considering whether the patent disclosed the compounds necessary to practice the claimed method, given the state of technology); Singh v. Brake, 317 F.3d 1334, 1343 (Fed. Cir. 2002) (affirming adequacy of disclosure by distinguishing precedent in which the selection of a particular species within the claimed genus had involved “highly unpredictable results”).54

Finally, where the operability of the described species is an issue, the Federal Circuit has noted: It is not necessary that every permutation within a generally operable invention be effective in order for an inventor to obtain a generic claim, provided that the effect is sufficiently demonstrated to characterize a generic invention. See In re Angstadt, 537 F.2d 498, 504 (CCPA 1976) (“The examples, both operative and inoperative, are the best guidance this art permits, as far as we can conclude from the record”). While the Board is correct that a generic invention requires adequate support, the sufficiency of the support must be determined in the particular case.55

H. There Is No “Essential Element” Requirement for Written Description In Carnegie, the Federal Circuit confirmed that there is no “essential element” test for determining written description compliance. The court explained: Appellants argue that the district court erred in concluding that the claims of the ’270 patent are invalid under our holding in Gentry Gallery. According to appellants, the court improperly invalidated the claims for lack of written description after concluding that they do not recite the problem the invention was intended to solve. Because lethality was the key problem solved by the claimed invention, appellants argue that it cannot be an “element” of the invention.

54. Capon v. Eshhar, 418 F.3d 1349, 1358–59 (Fed. Cir. 2005). 55. Id. at 1359.

362

Chapter 9 Patent Law Principle III: Validity In response, Roche argues that the court correctly concluded that the claims are invalid under Gentry Gallery because they were broadened during prosecution to encompass more than the subject matter described in the application. . . . We agree with appellants that the district court erroneously found the claims invalid under Gentry Gallery. In reaching its decision, the court found clear and convincing evidence that “lethality was an essential feature of the invention claimed in the ’270 patent.” The court concluded that under Gentry Gallery, the claims were invalid because the appealed claims did not contain that feature. In essence, the court applied an essential element test. As we said in Cooper Cameron Corp. v. Kvaerner Oilfield Products, Inc., 291 F.3d 1317 (Fed. Cir. 2002), in Gentry Gallery “we did not announce a new ‘essential element’ test mandating an inquiry into what an inventor considers to be essential to his invention and requiring that the claims incorporate those elements.” Id. at 1323. Rather, “we applied and merely expounded upon the unremarkable proposition that a broad claim is invalid when the entirety of the specification clearly indicates that the invention is of a much narrower scope.” Id. We thus agree with appellants that the district court erred by invalidating the claims of the ’270 patent by applying the essential element test.56

I. An Illustrative Example of the Written Description Requirement The Federal Circuit’s University of Rochester decision provides a good illustration of the written description requirement.57 The technology in Rochester was COX-2 inhibitors,58 which are a class of NSAIDs (non-steroidal antiinflammatory) drugs thought to produce less irritation to the stomach than traditional NSAIDs such as aspirin and ibuprofen.59 It is believed this is because COX-2 inhibitors selectively inhibit a certain enzyme, PGHS-2.60 Rochester had a patent claiming methods “for selectively inhibiting PGHS-2 activity in a human host” by “administering a non-steroidal compound that selectively inhibits activity of the PGHS-2 [enzyme].”61 The defendants were selling Celebrex®, a COX-2 inhibitor for administration to humans. As a COX-2 inhibitor, Celebrex® is a non-steroidal compound that selectively inhibits activity of the PGHS-2 enzyme. Therefore, the defendants were selling Celebrex® for a method “for selectively inhibiting PGHS-2 activity in a human host”

56. 57. 58. 59. 60. 61.

Carnegie Mellon Univ. v. Hoffmann La Roche Inc., 541 F.3d 1115, 1127 (Fed. Cir. 2008). Univ. of Rochester v. G.D. Searle & Co., 358 F.3d 916 (Fed. Cir. 2004). Id. at 918–19. Id. Id. Id. at 918.

Written Description, 35 U.S.C. § 112, First Paragraph 363

by “administering [Celebrex®,] a non-steroidal compound that selectively inhibits activity of the PGHS-2 [enzyme].”62 The defendants argued that Rochester’s patent was invalid for lack of written description because it did not describe even a single non-steroidal compound that selectively inhibits activity of the PGHS-2 enzyme. The district court agreed, finding that: [A]lthough all of the claims require the use of a “non-steroidal compound that selectively inhibits activity of the PGHS-2 gene,” the ’850 patent neither discloses any such compound nor provides any suggestion as to how such a compound could be made or otherwise obtained other than by trial-and-error research. Indeed, the court found no evidence in the ’850 patent that the inventors themselves knew of any such compound at the time their patent application was filed. Accordingly, the court concluded that the patent’s claims are invalid for lack of written description.63

In affirming the district court’s holding of invalidity of Rochester’s patent, the Federal Circuit stated: Even with the three-dimensional structures of enzymes such as COX-1 and COX-2 in hand, it may even now not be within the ordinary skill in the art to predict what compounds might bind to and inhibit them, let alone have been within the purview of one of ordinary skill in the art in the 1993–1995 period in which the applications that led to the ’850 patent were filed. Rochester and its experts do not offer any persuasive evidence to the contrary. As the district court pointed out: “Tellingly, . . . what plaintiff ’s experts’ [sic] do not say is that one of skill in the art would, from reading the patent, understand what compound or compounds— which, as the patent makes clear, are necessary to practice the claimed method— would be suitable, nor would one know how to find such a compound except through trial and error. . . . Plaintiff ’s experts opine that a person of ordinary skill in the art would understand from reading the ’850 patent what method is claimed, but it is clear from reading the patent that one critical aspect of the method—a compound that selectively inhibits PGHS-2 activity—was hypothetical, for it is clear that the inventors had neither possession nor knowledge of such a compound.64

The Federal Circuit concluded: In sum, because the ’850 patent does not provide any guidance that would steer the skilled practitioner toward compounds that can be used to carry out the

62. Id. at 919. 63. Id. (citations omitted). 64. Id. at 925–26 (citations omitted, bracketing and emphasis in original, emphasis added).

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Chapter 9 Patent Law Principle III: Validity claimed methods—an essential element of every claim of that patent—and has not provided evidence that any such compounds were otherwise within the knowledge of a person of ordinary skill in the art at the relevant time, Rochester has failed to raise any question of material fact whether the named inventors disclosed the claimed invention. Accordingly, we affirm the district court’s grant of Pfizer’s motion for summary judgment [of invalidity of Rochester’s patent for lack of written description].65

IV. Best Mode, 35 U.S.C. § 112, First Paragraph Section 112, paragraph one of the Patent Statute (35 U.S.C. § 112, P 1) sets forth the best mode requirement as follows: The specification shall contain a written description of the invention, and of the manner and process of making and using it, in such full, clear, concise, and exact terms as to enable any person skilled in the art to which it pertains, or with which it is most nearly connected, to make and use the same, and shall set forth the best mode contemplated by the inventor of carrying out his invention.66

As explained by the Federal Circuit: The best mode requirement creates a statutory bargained-for exchange by which a patentee obtains the right to exclude others from practicing the claimed invention for a certain time period, and the public receives knowledge of the preferred embodiments for practicing the claimed invention. Eli Lilly & Co. v. Barr Labs., Inc., 251 F.3d 955, 963 (Fed. Cir. 2001). The purpose of the best mode requirement is to restrain inventors from applying for patents while at the same time concealing from the public preferred embodiments of the inventions they have in fact conceived. See Transco Prods. Inc. v. Performance Contracting, Inc., 38 F.3d 551, 560 (Fed. Cir. 1994). A holding of invalidity for failure to disclose the best mode requires clear and convincing evidence that the inventor both knew of and concealed a better mode of carrying out the claimed invention than that set forth in the specification. Id.67

65. Id. at 929 (footnote omitted, emphasis added). 66. 35 U.S.C.S. § 112, P 1 (emphasis added). 67. Teleflex, Inc. v. Ficosa N. Am. Corp., 299 F.3d 1313, 1329 (Fed. Cir. 2002) (emphasis added).

Best Mode, 35 U.S.C. § 112, First Paragraph 365

A. The Two-Prong Analysis Best mode is determined by a two-prong analysis. The first prong is subjective; it considers whether at the time the patent application was filed, the inventor believed there was a best mode for practicing the claimed invention. The second prong is objective; it considers whether the specification enables one of ordinary skill in the art to practice the best mode of the invention. Federal Circuit cases are in agreement as to the definition of the first prong of the test. However, the court varies on whether the second prong means an application fails to meet the best mode requirement if it merely fails to enable the best mode, or whether failure to meet the best mode requires proof that the best mode was concealed by the inventor. The following quotations from four typical Federal Circuit “best mode” decisions show the current state of the law on the best mode requirement: In Pfizer, the Federal Circuit stated: The test for compliance with best mode is comprised of two steps: first, whether, ‘at the time of filing the application, the inventor possessed a best mode for practicing the invention;’ and second, whether the inventor’s disclosure was ‘adequate to enable one of ordinary skill in the art to practice the best mode of the invention. Bayer AG v. Schein Pharms., Inc., 301 F.3d 1306, 1320 (Fed. Cir. 2002). . . . The first prong is subjective and focuses on the inventor’s state of mind at the time the application is filed; the second prong is “objective and depends upon the scope of the claimed invention and the level of skill in the relevant art.”68

In Allvoice, the court stated: To apply the best mode standard, a court must first “determine[] whether, at the time the patent application was filed, the inventor had a best mode of practicing the claimed invention.” United States Gypsum Co. v. Nat’l Gypsum Co., 74 F.3d 1209, 1212 (Fed. Cir. 1996). This determination turns on the inventor’s own subjective beliefs. Id. (citing Chemcast Corp. v. Arco Indus. Corp., 913 F.2d 923, 928 (Fed. Cir. 1990)). “[T]he second part of the analysis [asks] . . . has the inventor ‘concealed’ his preferred mode from the ‘public’?” Chemcast Corp., 913 F.2d at 928.69

68. Pfizer, Inc. v. Teva Pharms. USA, Inc., 518 F.3d 1353, 1364 (Fed. Cir. 2008) (some citations omitted, emphasis added). 69. AllVoice Computing PLC v. Nuance Communs., Inc., 504 F.3d 1236, 1246–1247 (Fed. Cir. 2007) (emphasis added).

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In Bayer, the Federal Circuit stated: The general contours of our test for compliance with the best mode requirement are well known: Compliance with best mode is a question of fact composed of two subsidiary factual inquiries. “First, the factfinder must determine whether, at the time of filing the application, the inventor possessed a best mode for practicing the invention.” Eli Lilly, 251 F.3d at 963. The first prong, we have explained, is highly subjective and focuses on the inventor’s state of mind as of the date of filing the application. Id.; see also N. Telecom Ltd. v. Samsung Elec. Co., 215 F.3d 1281 (Fed. Cir. 2000). Second, if the inventor subjectively considered one mode to be preferred over all others, then “the second inquiry is whether the inventor’s disclosure is adequate to enable one of ordinary skill in the art to practice the best mode of the invention. This inquiry is objective and depends upon the scope of the claimed invention and the level of skill in the relevant art.” N. Telecom, 215 F.3d at 1286.70

Finally, in Teleflex the court stated: The purpose of the best mode requirement is to restrain inventors from applying for patents while at the same time concealing from the public preferred embodiments of the inventions they have in fact conceived. See Transco Prods. Inc. v. Performance Contracting, Inc., 38 F.3d 551, 560 (Fed. Cir. 1994). A holding of invalidity for failure to disclose the best mode requires clear and convincing evidence that the inventor both knew of and concealed a better mode of carrying out the claimed invention than that set forth in the specification. Id. Compliance with the best mode requirement is a question of fact which involves a two-pronged inquiry. N. Telecom Ltd. v. Samsung Elecs. Co., 215 F.3d 1281, 1286 (Fed. Cir. 2000). The first prong is subjective, focusing on the inventor’s state of mind at the time he filed the patent application, and asks whether the inventor considered a particular mode of practicing the invention to be superior to all other modes at the time of filing. Id. The second prong is objective and asks whether the inventor adequately disclosed the mode he considered to be superior. See Amgen, Inc. v. Chugai Pharm. Co., 927 F.2d 1200, 1212 (Fed. Cir. 1991).71

B. The Best Mode Requirement Applies to the Claimed Invention The best mode requirement applies to only the claimed subject matter. However, it may also apply to subject matter that is “not strictly within the

70. Bayer AG & Bayer Corp. v. Schein Pharms., Inc., 301 F.3d 1306, 1320 (Fed. Cir. 2002) (emphasis added). 71. Teleflex, 299 F.3d at 1330 (emphasis added).

Best Mode, 35 U.S.C. § 112, First Paragraph 367

bounds of the claims [but where] the alleged best mode information bore a strong relationship to the claimed invention or implicated questions of concealment.”72 In Allvoice, the Federal Circuit emphasized that generally the best mode requirement applies to only the claimed subject matter: Only the claimed invention is subject to the best mode requirement. DeGeorge v. Bernier, 768 F.2d 1318, 1325 (Fed. Cir. 1985) (reversing the Patent Appeals Board for extending the best mode beyond the proper claim scope); Randomex, Inc. v. Scopus Corp., 849 F.2d 585, 588, (Fed. Cir. 1988) (“It is concealment of the best mode of practicing the claimed invention that section 112, P 1 is designed to prohibit.”); see Zygo Corp. v. Wyko Corp., 79 F.3d 1563, 1567 (Fed. Cir. 1996) (“[T]he parameters of a section 112 inquiry are set by the CLAIMS.”). According to § 112, P 1, an inventor is required to disclose the best mode for “carrying out his invention.” (emphasis added) Because the claims represent “the subject matter which the applicant regards as his invention,” subject matter outside the scope of the claims also falls outside the scope of the best mode requirement. 35 U.S.C. § 112, PP 1–2; see Engel Indus., Inc. v. Lockformer Co., 946 F.2d 1528, 1531 (Fed. Cir. 1991) (“The best mode inquiry is directed to what the applicant regards as the invention, which in turn is measured by the claims.”); Eli Lilly & Co. v. Barr Labs., Inc., 251 F.3d 955, 963 (Fed. Cir. 2001) (“[T]he extent of information that an inventor must disclose depends on the scope of the claimed invention.”). . . . Because the functionality of the alleged best mode falls outside the scope of claim 73, this court detects no violation of the best mode requirement with respect to claim 73.73

In Teleflex, the Federal Circuit indicated: With respect to both the first and second prongs, “the best mode inquiry is directed to what the applicant regards as the invention, which in turn is measured by the claims.” Engel Indus., Inc. v. Lockformer Co., 946 F.2d 1528, 1531 (Fed. Cir. 1991). Accord N. Telecom, 215 F.3d at 1286 (“As we have repeatedly held, the contours of the best mode requirement are defined by the scope of the claimed invention. . . . the party asserting invalidity must show that the asserted best mode relates directly to the claimed invention.”); Eli Lilly, 251 F.3d at 963 (“The extent of information that an inventor must disclose depends on the scope of the claimed invention.”); Chemcast, 913 F.2d at 927 (“The other objective limitation on the extent of the disclosure required to comply with the best mode requirement is, of course, the scope of the claimed invention.”); Randomex, Inc. v. Scopus Corp., 849 F.2d 585, 588 (Fed. Cir. 1988) (“It is concealment of the best

72. Id. at 1331. 73. AllVoice, 504 F.3d at 1246, 1248.

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Chapter 9 Patent Law Principle III: Validity mode of practicing the claimed invention that section 112, P 1 is designed to prohibit.”); Zygo Corp. v. Wyko Corp., 79 F.3d 1563, 1567 (Fed. Cir. 1996) (“The focus of a section 112 inquiry is not what a particular user decides to make and sell or even in what field the invention is most likely to find success. Rather, in keeping with the statutory mandate, our precedent is clear that the parameters of a section 112 inquiry are set by the claims.”); Christianson, 822 F.2d at 1563 (“The ‘best mode’ is that of practicing the claimed invention”).74

The Teleflex court further explained: Although we have found violations of the best mode requirement for failure to disclose subject matter not strictly within the bounds of the claims, even in these cases the alleged best mode information bore a strong relationship to the claimed invention or implicated questions of concealment. See Nobelpharma AB v. Implant Innovations, Inc., 141 F.3d 1059, 1065 (Fed. Cir. 1998) (“critical to the production of a functional implant”); Great N. Corp. v. Henry Molded Prods., Inc., 94 F.3d 1569, 1572 (Fed. Cir. 1996) (“critical to practicing the claimed invention”); Dana Corp. v. IPC Ltd. P’ship, 860 F.2d 415, 420 (Fed. Cir. 1988) (“necessary to satisfactory performance”); Spectra-Physics, Inc. v. Coherent, Inc., 827 F.2d 1524, 1537 (Fed. Cir. 1987) (“necessary to the enjoyment of the invention”); see also Engel Indus., 946 F.2d at 1531 (“Unclaimed subject matter is not subject to the disclosure requirements of § 112; the reasons are pragmatic: the disclosure would be boundless, and the pitfalls endless.”); DeGeorge v. Bernier, 768 F.2d 1318, 1325 (Fed. Cir. 1985).75

C. Failure to Disclose the Preferred Embodiment The Federal Circuit is clear that best mode requires disclosure of the inventor’s preferred embodiment of the claimed invention. For example, in Bayer the Federal Circuit stated: In accordance with the focus on the claimed subject matter, we have long held that compliance with the best mode requirement requires disclosing the inventor’s preferred embodiment of the claimed invention. See, e.g., Dana Corp. v. IPC Ltd. P’ship, 860 F.2d 415, 418 (Fed. Cir. 1988) (“The purpose of the best mode requirement is to ensure that the public, in exchange for the rights given the inventor under the patent laws, obtains from the inventor a full disclosure of the preferred embodiment of the invention.”); DeGeorge, 768 F.2d at 1324–25;

74. Teleflex, 299 F.3d at 1330–31. 75. Id. at 1331 (emphasis added).

Best Mode, 35 U.S.C. § 112, First Paragraph 369 In re Gay, 309 F.2d at 772 (holding that with respect to the best mode requirement, “an inventor is in compliance therewith if he does not conceal what he feels is a preferred embodiment of his invention”). This result is hardly surprising, for if an inventor has developed a preferred way of practicing the invention, he typically will state that preference in his description of the preferred embodiment. Furthermore, fulfillment of the requirement via disclosure of the preferred embodiment comports with the purpose of the best mode requirement. As our predecessor court held in In re Gay, “manifestly, the sole purpose of [the best mode] requirement is to restrain inventors from applying for patents while at the same time concealing from the public preferred embodiments of their inventions which they have in fact conceived.” Id.76

In Pfizer, the court noted: Typically, the best mode issue concerns the applicant’s failure to disclose a preferred embodiment, but not always. In Bayer, we explained that the best mode requirement does not “demand disclosure of every preference an inventor possesses as of the filing date.” Id. at 1314–15. We held that the best mode requirement does demand disclosure of an inventor’s preferred embodiment of the claimed invention. Id. at 1316. However, it is not limited to that. We have recognized that best mode requires inventors “to disclose aspects of making or using the claimed invention [when] the undisclosed matter materially affect[s] the properties of the claimed invention.” Id. at 1319.77

D. Best Mode Does Not Apply to “Production Details,” Including Commercial Considerations, or to “Routine Details” Apparent to One of Ordinary Skill in the Art Federal Circuit law holds that: The best mode requirement does not extend to “production details,” including commercial considerations such as equipment on hand, availability of materials, relationships with suppliers, or customer requirements. Young Dental Mfg. Co. v. Q3 Special Prods., Inc., 112 F.3d 1137, 1144 (Fed. Cir. 1997); Wahl Instruments, 950 F.2d at 1579; Christianson, 822 F.2d at 1563. Further, the best mode requirement does not extend to “routine details” apparent to one of ordinary skill in the art. Eli Lilly, 251 F.3d at 963; Young Dental, 112 F.3d at 1144. Routine details need not be disclosed because one skilled in the art is aware of

76. Bayer AG & Bayer Corp. v. Schein Pharms., Inc., 301 F.3d 1306, 1316 (Fed. Cir. 2002). 77. Pfizer, Inc. v. Teva Pharms. USA, Inc., 518 F.3d 1353, 1364 (Fed. Cir. 2008).

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Chapter 9 Patent Law Principle III: Validity alternative means for accomplishing the routine detail that would still produce the best mode of the claimed invention. Eli Lilly, 251 F.3d at 966.78

E. Summary In Bayer, the Federal Circuit analyzed both its own and its predecessor courts’ best mode decisions through approximately 2002 and noted: Notwithstanding that the best mode requirement keys only on carrying out the claimed invention, “we have found violations of the best mode requirement for failure to disclose subject matter not strictly within the bounds of the claims. . . .” In the history of this court and our predecessor courts, we have held claims invalid for failure to satisfy the best mode requirement on only seven occasions. As we will see, these cases involved either failure to disclose a preferred embodiment, or else failure to disclose a preference that materially affected making or using the invention.79

The Bayer court concluded: Thus, we have held a patent invalid for failure to satisfy the best mode requirement in two situations. First, we have invalidated patents when they do not adequately disclose a preferred embodiment of the invention. This is what occurred in Northern Telecom, Chemcast, and United States Gypsum Co. Consequently, if an inventor fails to disclose the preferred embodiment of the invention, the best mode requirement is not satisfied. Second, we have invalidated patents when the patentee failed to disclose aspects of making or using the claimed invention and the undisclosed matter materially affected the properties of the claimed invention. In Spectra Physics and Nobelpharma, the inventors failed to disclose subjective preferences that related to making the inventions, and the undisclosed information materially affected the properties of the claimed invention. In Dana and Great Northern, the inventors failed to disclose subjective preferences that related to the use of the claimed inventions, and the undisclosed information materially affected the properties of the claimed inventions.80

78. Teleflex, 299 F.3d at 1331–32; Christianson v. Colt Industries Operating Corp., 822 F.2d 1544, 1563 (Fed. Cir. 1987), vacated on other grounds, 486 U.S. 800, 100 L. Ed. 2d 811, 108 S. Ct. 2166 (“The ‘best mode’ is that of practicing the claimed invention. It has nothing to do with mass production or with sales to customers having particular requirements.”) (emphasis in original). 79. Bayer, 301 F.3d at 1316. 80. Id. at 1319 (emphasis added).

Indefiniteness, 35 U.S.C. § 112, Second Paragraph

V. Indefiniteness, 35 U.S.C. § 112, Second Paragraph The second paragraph of Section 112 of the U.S. Patent Statute (35 U.S.C. § 112, P 2) requires that the specification of a patent “conclude with one or more claims particularly pointing out and distinctly claiming the subject matter which the applicant regards as his invention.”81 This is referred to as the definiteness requirement. As explained by the Federal Circuit: Because claims delineate the patentee’s right to exclude, the patent statute requires that the scope of the claims be sufficiently definite to inform the public of the bounds of the protected invention, i.e., what subject matter is covered by the exclusive rights of the patent.82

A. The Definiteness Requirement Satisfies the Requirement That a Patent Give Public Notice of the Metes and Bounds of the Claimed Subject Matter Courts have explained that the reason for the public notice requirement of the definiteness statute is so that others may know of the metes and bounds of a patent’s claimed subject matter in order to avoid infringement. As noted by the Federal Circuit: Otherwise, competitors cannot avoid infringement, defeating the public notice function of patent claims. Athletic Alternatives, Inc. v. Prince Mfg., Inc., 73 F.3d 1573, 1581 (Fed. Cir. 1996) (“[T]he primary purpose of the requirement is ‘to guard against unreasonable advantages to the patentee and disadvantages to others arising from uncertainty as to their [respective] rights.’ ”) (quoting Gen. Elec. Co. v. Wabash Appliance Corp., 304 U.S. 364, 369, 58 S. Ct. 899, 82 L. Ed. 1402 (1938)).83

As also explained by the court: Every patent’s specification must “conclude with one or more claims particularly pointing out and distinctly claiming the subject matter which the applicant regards as his invention.” 35 U.S.C. § 112, P2 (2000). Because the claims perform

81. 35 U.S.C.S. § 112, P 2 (2009). 82. Halliburton Energy Servs. v. M-I LLC, 514 F.3d 1244, 1249 (Fed. Cir. 2008). 83. Id.

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Chapter 9 Patent Law Principle III: Validity the fundamental function of delineating the scope of the invention, Chimie v. PPG Indus., Inc., 402 F.3d 1371, 1379 (Fed. Cir. 2005), the purpose of the definiteness requirement is to ensure that the claims delineate the scope of the invention using language that adequately notifies the public of the patentee’s right to exclude, Honeywell Int’l, Inc. v. ITC, 341 F.3d 1332, 1338 (Fed. Cir. 2003).84

The Supreme Court has stated that “[t]he statutory requirement of particularity and distinctness in claims is met only when [the claims] clearly distinguish what is claimed from what went before in the art and clearly circumscribe what is foreclosed from future enterprise.”85

B. A Patent’s Claims Are Presumed Valid, and Indefiniteness Must Be Proven by Clear and Convincing Evidence The U.S. Supreme Court has emphasized that claims in an issued U.S. patent are presumed to be valid: In this regard it is important to note that an issued patent is entitled to a statutory presumption of validity. See 35 U.S.C. § 282 (2000). “By finding claims indefinite only if reasonable efforts at claim construction prove futile, we accord respect to the statutory presumption of validity and we protect the inventive contribution of patentees, even when the drafting of their patents has been less than ideal.” Exxon Research & Eng’g, 265 F.3d at 1375 (citation omitted). In this way we also follow the requirement that clear and convincing evidence be shown to invalidate a patent. See Budde v. Harley-Davidson, Inc., 250 F.3d 1369, 1376 (Fed. Cir. 2001).86

Thus, the Supreme Court concluded: [The] standard [for indefiniteness] is met where an accused infringer shows by clear and convincing evidence that a skilled artisan could not discern the boundaries of the claim based on the claim language, the specification, and the prosecution history, as well as her knowledge of the relevant art area.87

84. Datamize, LLC v. Plumtree Software, Inc., 417 F.3d 1342, 1347 (Fed. Cir. 2005). 85. United Carbon Co. v. Binney & Smith Co., 317 U.S. 228, 236, 63 S. Ct. 165, 87 L. Ed. 232 (1942). 86. Id. at 1347–48 (emphasis added). 87. Id. at 1249–50.

Indefiniteness, 35 U.S.C. § 112, Second Paragraph

C. The Definiteness Requirement Does Not Compel Absolute Clarity As explained by the Federal Circuit: The definiteness requirement, however, does not compel absolute clarity. . . . See Novo Indus., L.P. v. Micro Molds Corp., 350 F.3d 1348, 1353 (Fed. Cir. 2003); Honeywell Int’l,341 F. 3d at 1338; Exxon Research & Eng’g Co. v. United States, 265 F.3d 1371, 1375 (Fed. Cir. 2001). Thus, the definiteness of claim terms depends on whether those terms can be given any reasonable meaning.88

D. Claims Are Not Indefinite Merely Because They Present a Difficult Task of Claim Construction The Federal Circuit has held: Of course, claims are not indefinite merely because they present a difficult task of claim construction. Instead, “[i]f the meaning of the claim is discernible, even though the task may be formidable and the conclusion may be one over which reasonable persons will disagree, we have held the claim sufficiently clear to avoid invalidity on indefiniteness grounds.” Exxon Research & Eng’g Co. v. United States, 265 F.3d 1371, 1375 (Fed. Cir. 2001) (citations omitted). Proof of indefiniteness requires such an exacting standard because claim construction often poses a difficult task over which “expert witnesses, trial courts, and even the judges of this court may disagree.” Id.89

As explained by the court in Datamize: Furthermore, a difficult issue of claim construction does not ipso facto result in a holding of indefiniteness. Exxon Research & Eng’g, 265 F. 3d at 1375. “If the meaning of the claim is discernible, even though the task may be formidable and the conclusion may be one over which reasonable persons will disagree, we have held the claim sufficiently clear to avoid invalidity on indefiniteness grounds.” Id.90

88. Datamize, 417 F.3d at 1347. 89. Halliburton, 514 F.3d at 1249 (emphasis added). 90. Datamize, 417 F.3d at 1347.

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E. The Standard Rules of Claim Construction Apply to Determining Claim Definiteness As emphasized by the Federal Circuit: In the face of an allegation of indefiniteness, general principles of claim construction apply. See Oakley, Inc. v. Sunglass Hut Int’l, 316 F.3d 1331, 1340–41 (Fed. Cir. 2003) (noting that a determination of definiteness “requires a construction of the claims according to the familiar canons of claim construction”). Intrinsic evidence in the form of the patent specification and file history should guide a court toward an acceptable claim construction. Phillips v. AWH Corp., 415 F.3d 1303 (Fed. Cir. July 12, 2005) (en banc). And while “we have emphasized the importance of intrinsic evidence in claim construction, we have also authorized district courts to rely on extrinsic evidence,” such as expert testimony. In construing claims, “what matters is for the court to attach the appropriate weight to be assigned to those sources in light of the statutes and policies that inform patent law.”91

1. The Specification Must Be Considered As with any claim construction, the specification should be consulted to determine whether a claim meets the definiteness requirement. “When a word of degree is used the district court must determine whether the patent’s specification provides some standard for measuring that degree.” Seattle Box Co., 731 F.2d at 826. Similarly, when faced with a purely subjective phrase like “aesthetically pleasing,” a court must determine whether the patent’s specification supplies some standard for measuring the scope of the phrase. Thus, we next consult the written description. See id.; see also Chimie, 402 F.3d at 1377 (“When the claim language itself lacks sufficient clarity to ascertain the scope of the ‘claims, we look to the written description for guidance.” (quoting Deering Precision Instruments, L.L.C. v. Vector Distribution Sys., Inc., 347 F.3d 1314, 1324 (Fed. Cir. 2003)).92

2. The Patent’s Prosecution History Must Be Considered Second to a patent’s specification, a patent’s prosecution history should also be consulted to determine whether a claim meets the definiteness requirement. We must also analyze the prosecution history to determine whether it provides any reasonable construction of “aesthetically pleasing.” Vitronics Corp. v. Conceptronic, Inc., 90 F.3d 1576, 1582. Since the ’040 patent is a continuation of

91. Id. at 1348 (some citations omitted). 92. Id. at 1351.

Indefiniteness, 35 U.S.C. § 112, Second Paragraph the ’137 patent, the ’040 patent’s prosecution history is relevant material that we should consider. See Microsoft Corp. v. Multi-Tech Sys., Inc., 357 F.3d 1340, 1349 (Fed. Cir. 2004) (recognizing that “the prosecution history of one patent is relevant to an understanding of the scope of a common term in a second patent stemming from the same parent application”).93

3. Extrinsic Evidence May Be Considered in Limited Ways Finally, the extrinsic evidence may also be used in limited ways in determining whether a claim meets the definiteness requirement: We next consult the extrinsic evidence in the record. See Frank’s Casing Crew & Rental Tools, Inc. v. PMR Techs., Ltd., 292 F.3d 1363, 1374 (Fed. Cir. 2002); Pall Corp. v. Micron Separations, Inc., 66 F.3d 1211, 1216 (Fed. Cir. 1995) (“In construing the claims we look to the language of the claims, the specification, and the prosecution history. Extrinsic evidence may also be considered, if needed to assist in determining the meaning or scope of technical terms in the claims.” (internal citation omitted)).94

F. Indefiniteness in the Context of Lack of Structure for Means-Plus-Function Claims A number of Federal Circuit cases have found means-plus-function claims to be indefinite where the specification failed to disclose a structure corresponding to the means-plus-function limitation.95 A common scenario involves means-plus-function claims in which the structure in the specification corresponding to the claimed means is a general purpose computer and the specification fails to disclose a specific algorithm for performing the claimed function.96

93. Id. at 1353. 94. Id. 95. E.g., Net Moneyin, Inc. v. Verisign, Inc., 545 F.3d 1359, 1367 (Fed. Cir. 2008); Finisar Corp. v. DirecTV Group, Inc., 523 F.3d 1323, 1341 (Fed. Cir. 2008); Aristocrat Techs. Austl. PTY Ltd. v. Int’l Game Tech., 521 F.3d 1328, 1337–1338 (Fed. Cir. 2008); Biomedino, LLC v. Waters Techs. Corp., 490 F.3d 946, 950 (Fed. Cir. 2007); Med. Instrumentation & Diagnostics Corp. v. Elekta AB, 344 F.3d 1205, 1211 (Fed. Cir. 2003); In re Donaldson Co., 16 F.3d 1189, 1195 (Fed. Cir. 1994) (en banc). 96. E.g., Net Moneyin, 545 F.3d at 1367.

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1. Means-Plus-Function Claims Means-plus-function claims are discussed in detail in Chapter 2. Briefly, these are a special form of claims sanctioned under 35 U.S.C. § 112, Paragraph 6, which provides: An element of a claim for a combination may be expressed as a means or step for performing a specified function without the recital of structure, material, or acts in support thereof, and such claim shall be construed to cover the corresponding structure, material, or acts described in the specification and equivalents thereof.97

As explained by the Federal Circuit: “Claim construction of a means-plus-function limitation includes two steps. First, the court must determine the claimed function. Second, the court must identify the corresponding structure in the written description of the patent that performs the function.” Applied Med. Res. Corp. v. U.S. Surgical Corp., 448 F.3d 1324, 1332 (Fed. Cir. 2006). . . ..98

2. To Comply with Section 112, Second Paragraph (Definiteness), a Means-Plus-Function Claim Must Have a Definite Structure in the Specification Associated with the Claimed Means Term In Net Moneyin, the Federal Circuit discussed the Section 112, second paragraph definiteness requirement in the context of means-plus-function claims. A patent applicant who employs means-plus-function language “must set forth in the specification an adequate disclosure showing what is meant by that language. If an applicant fails to set forth an adequate disclosure, the applicant has in effect failed to particularly point out and distinctly claim the invention as required by the second paragraph of section 112.” In re Donaldson Co., 16 F.3d 1189, 1195 (Fed. Cir. 1994) (en banc). To avoid purely functional claiming in cases involving computer-implemented inventions, we have “consistently required that the structure disclosed in the specification be more than simply a general purpose computer or microprocessor.” Aristocrat Techs. Austl. Pty Ltd. v. Int’l Game Tech., 521 F.3d 1328, 1333 (Fed. Cir. 2008). “Because general purpose computers can be programmed to perform very different tasks in very different ways, simply disclosing a computer as the structure designated to perform a particular function does not limit the scope of the claim to ‘the corresponding

97. 35 U.S.C.S. § 112, P 6 (2009). 98. AllVoice Computing PLC v. Nuance Communs., Inc., 504 F.3d 1236, 1241 (Fed. Cir. 2007).

Indefiniteness, 35 U.S.C. § 112, Second Paragraph structure, material, or acts’ that perform the function, as required by section 112, Paragraph 6.” Id. “Thus, in a means-plus-function claim ‘in which the disclosed structure is a computer, or microprocessor, programmed to carry out an algorithm, the disclosed structure is not the general purpose computer, but rather the special purpose computer programmed to perform the disclosed algorithm.’ ” Id. (quoting WMS Gaming, Inc. v. Int’l Game Tech., 184 F.3d 1339, 1349 (Fed. Cir. 1999)). Consequently, a means-plus-function claim element for which the only disclosed structure is a general purpose computer is invalid if the specification fails to disclose an algorithm for performing the claimed function. See id. at 1337–38. There is no dispute in this case that the specification fails to disclose an algorithm by which a general purpose bank computer “generat[es] an authorization indicia.” n3 As a result, the district court correctly concluded that claims 1, 13, and 14 are indefinite under 35 U.S.C. § 112, P 2. We therefore affirm that part of the judgment. n3 At oral argument, counsel for NMI conceded that “[t]here is nothing in the written description that expressly states what is going on inside that bank computer.”99

G. Examples of Federal Circuit Definiteness Decisions The Federal Circuit has applied the definiteness requirement of Section 112, second paragraph, in numerous circumstances. For example, as discussed above, the court has repeatedly held that means-plus-function claims are indefinite when the specification fails to disclose a structure corresponding to the means-plus-function limitation.100 In another example, the court has held claims invalid under Section 112, second paragraph, where the claims included a numeric limitation, but did not disclose which of multiple methods of measuring that number should be used.101 Further, the court held invalid for indefiniteness a claim containing a term for which the meaning was “completely dependent on a person’s subjective opinion.”102 The Federal Circuit has also stated that a claim could be indefinite if a term does not have a proper antecedent basis where such basis is not otherwise present by implication or the meaning is not reasonably ascertainable.103 The Federal Circuit has stated that “the common thread in all of these cases is that claims were held indefinite only where a person of ordinary skill in the art could not determine the bounds of the claims, i.e., the claims were insolubly ambiguous.”104

99. 100. 101. 102. 103. 104.

Net Moneyin, 545 F.3d at 1367 (some citations omitted, emphasis added). E.g., Net Moneyin, 545 F.3d at 1367; Finisar, 523 F.3d at 1341; Biomedino, 490 F.3d at 950. Honeywell Int’l, Inc. v. Int’l Trade Comm’n, 341 F.3d 1332, 1340 (Fed. Cir. 2003). Datamize, LLC v. Plumtree Software, Inc., 417 F.3d 1342, 1350 (Fed. Cir. 2005). Energizer Holdings, Inc. v. Int’l Trade Comm’n, 435 F.3d 1366, 1370–71 (Fed. Cir. 2006). Halliburton Energy Servs. v. M-I LLC, 514 F.3d 1244, 1249 (Fed. Cir. 2008).

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In reviewing the Federal Circuit’s jurisprudence on the definiteness requirement, the Federal Circuit in Halliburton concluded: “Only claims ‘not amenable to construction’ or ‘insolubly ambiguous’ are indefinite.” Datamize, 417 F.3d at 1347 (citing Novo Indus., L.P. v. Micro Molds Corp., 350 F.3d 1348, 1353 (Fed. Cir. 2003); Honeywell, 341 F.3d at 1338; Exxon Research, 265 F.3d at 1375).105

VI. Patent-Eligible Subject Matter: Statutory Subject Matter (35 U.S.C. § 101) and Supreme Court Precedent In In re Bilski, the Federal Circuit stated “[w]hether a claim is drawn to patenteligible subject matter under § 101 [of the U.S. Patent Statute (35 U.S.C. § 101)106] is a threshold inquiry, and any claim of an application failing the requirements of § 101 must be rejected even if it meets all of the other legal requirements of patentability.”107 Section 101 provides: Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefore, subject to the conditions and requirements of this title.108

Section 101 recites four categories of patentable subject matter: processes, machines, manufactures, and compositions of matter. However, even if a claim may be deemed to fit literally within one or more of the statutory categories, it may not be patent eligible. As the Supreme Court has repeatedly cautioned: 1. Phenomena of nature, though just discovered, mental processes, and abstract intellectual concepts are not patentable, as they are the basic tools of scientific and technological work[;]109

105. Id. at 1250 (emphasis added). 106. 35 U.S.C.S. § 101 (2009). 107. In re Bilski, 545 F.3d 943 (Fed. Cir. 2008) (en banc), cert granted, Bilski v. Doll, 129 S. Ct. 2735 (2009); Parker v. Flook, 437 U.S. 584, 593, 98 S. Ct. 2522, 57 L. Ed. 2d 451 (1978). 108. 35 U.S.C.S. § 101 (2009). 109. Gottschalk v. Benson, 409 U.S. 63, 67, 93 S. Ct. 253, 34 L. Ed. 2d 273 (1972); see also In re Comiskey, 499 F.3d at 1365, 1378–79 (Fed. Cir. 2007) (the Federal Circuit holding that “mental processes,” “processes of human thinking,” and “systems that depend for their

Patent-Eligible Subject Matter: Statutory Subject Matter (35 U.S.C. § 101)

2. [A claim is not a patent-eligible] process [if it claims] laws of nature, natural phenomena, [or] abstract ideas[;]110 3. [Such fundamental principles are] part of the storehouse of knowledge of all men . . . free to all men and reserved exclusively to none[; and]111 4. A principle, in the abstract, is a fundamental truth; an original cause; a motive; these cannot be patented, as no one can claim in either of them an exclusive right.112 Therefore, when determining whether a claimed invention meets the requirements for patent-eligible subject matter, one must determine: (a) whether the claimed subject matter is drawn to patent-eligible subject matter within any of the four statutory categories of Section 101; and (b) whether the claimed subject matter is patent-eligible under the U.S. Supreme Court precedent discussed above.

A. Business Method Patents as an Example of a Section 101 Analysis (In re Bilski) Recently, the Federal Circuit has focused on whether so-called “business method” patents are patentable under Section 101.113 Therefore, this section considers Section 101 issues within the context of the Federal Circuit’s business method patent evaluation (e.g., as discussed in In re Bilski).114 A typical “business method” claim (claim 1 of the patent at issue in In re Bilski (to which the U.S. Supreme Court granted certiorari in 2009)) is shown below: A method for managing the consumption risk costs of a commodity sold by a commodity provider at a fixed price comprising the steps of: (a) initiating a series of transactions between said commodity provider and consumers of said commodity wherein said consumers purchase said commodity at a fixed rate based upon historical averages, said fixed rate corresponding to a risk position of said consumer;

110. 111. 112. 113. 114.

operation on human intelligence alone” are not patent-eligible subject matter under the U.S. Supreme Court’s decision in Benson, 409 U.S. at 63). Diamond v. Diehr, 450 U.S. 175, 185, 101 S. Ct. 1048, 67 L. Ed. 2d 155 (1981) (citing Flook, 437 U.S. at 589, and Gottschalk, 409 U.S. at 67). Funk Bros. Seed Co. v. Kalo Inoculant Co., 333 U.S. 127, 130, 68 S. Ct. 440, 92 L. Ed. 588 (1948). Le Roy v. Tatham, 55 U.S. (14 How.) 156, 175, 14 L. Ed. 367 (1852). E.g., Bilski, 545 F.3d at 943; In re Ferguson, 558 F.3d 1359 (Fed. Cir. 2009). Bilski, 545 F.3d at 943.

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380 Chapter 9 Patent Law Principle III: Validity (b) identifying market participants for said commodity having a counter-risk position to said consumers; and (c) initiating a series of transactions between said commodity provider and said market participants at a second fixed rate such that said series of market participant transactions balances the risk position of said series of consumer transactions.115

The Federal Circuit explained claim one as follows: In essence, the claim is for a method of hedging risk in the field of commodities trading. For example, coal power plants (i.e., the “consumers”) purchase coal to produce electricity and are averse to the risk of a spike in demand for coal since such a spike would increase the price and their costs. Conversely, coal mining companies (i.e., the “market participants”) are averse to the risk of a sudden drop in demand for coal since such a drop would reduce their sales and depress prices. The claimed method envisions an intermediary, the “commodity provider,” that sells coal to the power plants at a fixed price, thus isolating the power plants from the possibility of a spike in demand increasing the price of coal above the fixed price. The same provider buys coal from mining companies at a second fixed price, thereby isolating the mining companies from the possibility that a drop in demand would lower prices below that fixed price. And the provider has thus hedged its risk; if demand and prices skyrocket, it has sold coal at a disadvantageous price but has bought coal at an advantageous price, and vice versa if demand and prices fall. Importantly, however, the claim is not limited to transactions involving actual commodities, and the application discloses that the recited transactions may simply involve options, i.e., rights to purchase or sell the commodity at a particular price within a particular timeframe.116

In determining whether the claim was patent-eligible under Section 101, the Bilski court considered the question: [W]hat test or set of criteria governs the determination by the Patent and Trademark Office (“PTO”) or courts as to whether a claim to a process is patentable under § 101, or conversely, is drawn to unpatentable subject matter because it claims only a fundamental principle[?]117

The Bilski court answered that the U.S. Supreme Court’s “machineor-transformation test” is the “definitive test to determine whether a process claim is tailored narrowly enough to encompass only a particular application of a fundamental principle rather than to pre-empt the principle itself.”118

115. Id. at 949. 116. Id. at 949–50 (citations omitted). 117. Id. at 952 n.5 (As used in Bilski, the term fundamental principle means “laws of nature, natural phenomena, and abstract ideas”). 118. Id. at 954.

Patent-Eligible Subject Matter: Statutory Subject Matter (35 U.S.C. § 101)

The Federal Circuit phrased the machine-or-transformation test as being: “A claimed process is surely patent-eligible under § 101 if: (1) it is tied to a particular machine or apparatus, or (2) it transforms a particular article into a different state or thing.”119 In In re Ferguson, a business method case decided after Bilski, the Federal Circuit described a “machine” for purposes of Section 101: As this court recently stated in In re Nuijten, 500 F.3d 1346 (Fed. Cir. 2007), a machine is a “ ‘concrete thing, consisting of parts, or of certain devices and combination of devices.’ This ‘includes every mechanical device or combination of mechanical powers and devices to perform some function and produce a certain effect or result.’ ” Id. at 1355 (citation omitted) (quoting Burr v. Duryee, 68 U.S. (1 Wall.) 531, 570, 17 L. Ed. 650 (1863); Corning v. Burden, 56 U.S. (15 How.) 252, 267, 14 L. Ed. 683 (1853)).120

In determining whether the claims in Bilski were patent-eligible under Section 101, the Federal Circuit focused on the second part of the Section 101 test, “whether Applicants’ claim 1 satisfies the transformation branch of the machine-or-transformation test.”121 The court determined that the claim failed the test, stating: We hold that the Applicants’ process as claimed does not transform any article to a different state or thing. Purported transformations or manipulations simply of public or private legal obligations or relationships, business risks, or other such abstractions cannot meet the test because they are not physical objects or substances, and they are not representative of physical objects or substances. Applicants’ process at most incorporates only such ineligible transformations. See Appellants’ Br. at 11 (“[The claimed process] transforms the relationships between the commodity provider, the consumers and market participants “) As discussed earlier, the process as claimed encompasses the exchange of only options, which are simply legal rights to purchase some commodity at a given price in a given time period. The claim only refers to “transactions” involving the exchange of these legal rights at a “fixed rate corresponding to a risk position.” Thus, claim 1 does not involve the transformation of any physical object or substance, or an electronic signal representative of any physical object or substance. Given its admitted failure to meet the machine implementation part of the test as well, the claim entirely fails the machine-or-transformation test and is not drawn to patent-eligible subject matter.122

119. Id. (emphasis in original) (citing Gottschalk v. Benson, 409 U.S. 63, 70, 93 S. Ct. 253, 34 L. Ed. 2d 273 (1972); Diamond v. Diehr, 450 U.S. 175, 192, 101 S. Ct. 1048, 67 L. Ed. 2d 155 (1981); Parker v. Flook, 437 U.S. 584, 589 n.9, 98 S. Ct. 2522, 57 L. Ed. 2d 451 (1978); Cochrane v. Deener, 94 U.S. 780, 788, 24 L. Ed. 139, 1877 Dec. Comm’r Pat. 242 (1876)). 120. In re Ferguson, 558 F.3d 1359, 1364 (Fed. Cir. 2009). 121. Bilski, 545 F.3d at 963. 122. Id. at 963–64 (some citations omitted, emphasis added).

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In In re Ferguson, the Federal Circuit held that under Bilski the following claim was not patent-eligible under Section 101: A method of marketing a product, comprising: developing a shared marketing force, said shared marketing force including at least marketing channels, which enable marketing a number of related products; using said shared marketing force to market a plurality of different products that are made by a plurality of different autonomous producing company, so that different autonomous companies, having different ownerships, respectively produce said related products; obtaining a share of total profits from each of said plurality of different autonomous producing companies in return for said using; and obtaining an exclusive right to market each of said plurality of products in return for said using.123

The court reiterated the Bilski test that: “ ‘A claimed process is surely patent-eligible under § 101 if: (1) it is tied to a particular machine or apparatus, or (2) it transforms a particular article into a different state or thing.’ ”124 The court then held: Applicants’ method claims are not tied to any particular machine or apparatus. Although Applicants argue that the method claims are tied to the use of a shared marketing force, a marketing force is not a machine or apparatus. [A] machine is a “ ‘concrete thing, consisting of parts, or of certain devices and combination of devices.’ This ‘includes every mechanical device or combination of mechanical powers and devices to perform some function and produce a certain effect or result.’ ” Applicants’ method claims are not tied to any concrete parts, devices, or combination of devices.125

The court also concluded: Nor do Applicants’ methods, as claimed, transform any article into a different state or thing. At best it can be said that Applicants’ methods are directed to organizing business or legal relationships in the structuring of a sales force (or marketing company). But as this court stated in Bilski, “[p]urported transformations or manipulations simply of public or private legal obligations or relationships, business risks, or other such abstractions cannot meet the test because they are not physical objects or substances, and they are not representative of physical objects or substances.” 545 F.3d at 963.

123. In re Ferguson, 558 F.3d at 1361. 124. Id. at 1363–64 (quoting Bilski, 545 F.3d at 954). 125. Id. at 1363–64 (citations omitted, emphasis added).

Practice Points Because Applicants’ method claims fail to meet either prong of the machineor-transformation test, we affirm the Board’s rejection of claims 1–23 and 36–68 under § 101 as not drawn to patent-eligible subject matter.126

VII. Practice Points A. Claim Construction Is Always Required As reiterated throughout this book, claim construction is required for evaluating or opining on any matter related to a patent’s claims. This includes determining claim validity based on enablement, written description, best mode, indefiniteness, and patent-eligible subject matter. The process of determining claim validity under any of these provisions involves first objectively construing a patent’s claims independent of the basis of potential invalidity, then analyzing the construed claims for potential invalidity.

B. Invalidity as Opposed to Unenforceability Invalidity (as discussed in Chapters 6–9) differs from patent unenforceability (as discussed in Chapter 10). For example, a patent can be valid yet unenforceable. Validity is generally based on provisions in the U.S. Patent Statute (e.g., Sections 101, 102, 103, and 112) that are applied on a claim-by-claim basis. In contrast, patent unenforceability is non-statutory as it is based in equity. Further, when a patent is determined by a court to be unenforceable, the entire patent is unenforceable. This is the case even if the actions causing the unenforceability did not relate to all of a patent’s claims.

C. Section 112 of the U.S. Patent Statute (35 U.S.C. § 112) Contains at Least Four Separate Bases of Invalidity: Enablement (Section 112, First Paragraph), Written Description (Section 112, First Paragraph), Best Mode (Section 112, First Paragraph), and Definiteness (Section 112, Second Paragraph) U.S. courts have held that Section 112 of the U.S. Patent Statute (35 U.S.C. § 112) contains at least four separate issues relating to patent invalidity: (a) enablement (Section 112, first paragraph); (b) written description (Section 112, first paragraph); (c) best mode (Section 112, first paragraph); and (d) in definiteness (Section 112, second paragraph). Therefore, when

126. Id. at 1364 (emphasis added).

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evaluating or opining on potential invalidity of a U.S. patent, it is important to consider each of these different forms of invalidity.

D. Enablement Must Teach One Skilled in the Art to Practice the Full Scope of the Claimed Invention Without Undue Experimentation The enablement requirement of Section 112, first paragraph, requires that a patent’s specification enable one of ordinary skill in the relevant art at the filing date of the patent’s application to practice the full scope of the claimed subject matter without undue experimentation. It is important that the full scope of the claimed subject matter be enabled. A claim is invalid under Section 112, first paragraph, when the specification of a patent enables only the practice of less than the full scope of the claim.

E. Use the Wands Factors for Evaluating Enablement The Wands factors should be considered when evaluating whether a specification enables claimed subject matter of a U.S. patent. The Federal Circuit has instructed that evaluating enablement using the Wands factors is not mandatory; nonetheless, most enablement analyses consider at least some of the Wands factors. Further, for purposes of producing a legally competent opinion of patent invalidity based on lack of enablement (e.g., for the avoidance of willful infringement as discussed in Chapter 13), it is recommended that the enablement analyses expressly consider and use the Wands factors.

F. Enablement Is Evaluated at the Effective Filing Date of the Patent’s Application Enablement is evaluated as of the effective filing date of a patent’s application. Accordingly, the effective filing date of a patent is the date at which one determines the level of knowledge in the relevant art and the knowledge and level of skill of one of ordinary skill in the art. This is also the date at which the specification must have enabled one of ordinary skill in the art to practice the full scope of the claimed subject matter without undue experimentation.

G. A Specification Need Not Teach What Was Known in the Art A patent’s specification need not teach what was known in the art at the time the application was filed in order to enable the claimed subject matter.

Practice Points

However, any subject matter that is not taught must have been generally known to one of ordinary skill in the relevant art at the time the application was filed.

H. A Specification Must Enable the Novel Subject Matter Although a specification need not teach that which was known in the art at the time of the patent application’s filing, logically it must teach the novel aspects of the claimed invention. This must be the case as, by definition, the novel aspects of the claimed invention were not known in the art at the patent application was filed. Failure of a specification to teach one of ordinary skill in the art at the time the application was filed how to practice the novel aspects of the claimed invention is a failure of enablement.

I. Generally It Is Not Sufficient to Enable Only One Embodiment Where the Claims Cover More than One Embodiment Where multiple embodiments of an invention are claimed, it is generally not sufficient to enable only one embodiment. This is a part of the requirement that a specification must enable the entire scope of the claimed subject matter.

J. There Is No Presumption Related to Failure of the Patent Office to Issue an Enablement Rejection All patents are presumed valid, and invalidity must be proved by clear and convincing evidence. There is no additional presumption related to whether the Patent Office issued an enablement rejection during prosecution of a patent’s application.

K. Evidence of Teaching Away from a Claimed Invention in a Patent’s Specification Is Strong Evidence of Lack of Enablement A patent specification that teaches away from the claimed subject matter (such that one of skill in the art would be led to believe that the claimed subject matter could not be practiced) is strong evidence of lack of enablement.

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L. The Enablement Requirement Focuses on Whether the Specification Teaches One of Skill in the Art to Practice the Claimed Invention; Written Description Requires That a Patent’s Specification Describe the Invention Such That It Is Clear That the Patentees Possessed the Claimed Invention at the Time the Application Was Filed The enablement requirement can be met where a specification teaches one of skill in the art how to practice the full scope of the claimed subject matter without undue experimentation, even if the subject matter has not been practiced as of the filing date of a patent’s application. On the other hand, the written description requirement mandates that the specification provide sufficient description of the claimed invention such that one skilled in the art could recognize that the patent applicant possessed the claimed invention at the date the patent application was filed. A specification can enable a claimed invention but not adequately describe it—and vice versa.

M. Written Description Requires No Specific Form of Description There is no requirement that a claimed invention be described in any particular way in order to meet the written description requirement. However, regardless of the form of description, one skilled in the art must be able to determine from a patent’s specification that the inventors were in possession of the claimed invention at the time the application for the patent was filed.

N. Subject Matter That Is Only Obvious from a Specification Is Not Described Sufficiently to Satisfy the Written Description Requirement A specification that only renders the claimed subject matter obvious is not sufficient to meet the written description requirement. Consistent with the requirement’s purpose of ensuring that the applicant possessed the invention when the application was filed, claimed subject matter that is obvious from the written description—but was not directly described—is not sufficiently described to meet the written description requirement.

O. The Specification Must Describe, Explicitly or Inherently, Every Claim Limitation To comply with the written description requirement, a specification must describe every claim limitation either explicitly or inherently.

Practice Points

P. A Genus Must Be Described by a Representative Number of Species A claimed genus must be described by a representative number of species. The level of predictability in the art is a factor to consider in determining the scope of species that must be described in order to describe a claimed genus. Moreover, U.S. courts have recognized the Written Description Examination Guidelines of the U.S. Patent and Trademark Office for determining whether a representative number of species has been described in a patent’s specification to sufficiently describe a claimed genus

Q. Compliance with the Best Mode Requirement Is Based on a Two-Prong Analysis Compliance with the best mode requirement is based on a two-prong analysis: (a) whether at the time the application was filed the inventor possessed a subjective belief of a best mode for practicing the claimed invention; and (b) whether the specification’s disclosure is sufficient to enable one of ordinary skill in the art to practice the inventor’s best mode.

R. Best Mode Relates to the Claimed Invention As with all bases of invalidity, best mode relates to the construed claims of a patent. However, the Federal Circuit has held that best mode may also apply to issues closely related to the claimed invention, such as those necessary to the performance of the best mode of the claimed invention.

S. Failure to Disclose the Preferred Embodiment Is a Violation of the Best Mode Requirement The failure of an inventor to disclose the preferred embodiment of a claimed invention in the specification is a violation of the best mode requirement. By definition, if the inventor has a preferred embodiment at the time of filing the invention, it must be disclosed and enabled in order to satisfy the best mode requirement.

T. Claims Are Not Indefinite Merely Because They Are Difficult to Construe The definiteness requirement of Section 112, second paragraph requires that claims define their subject matter with sufficient clarity as to provide notice of

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the scope of the claimed subject matter. Claims that are difficult to construe are not indefinite based solely on the difficulty of their construction. To be invalid for indefiniteness, a claim must be not be amenable to construction or be insolubly ambiguous.

U. The Rules of Claim Construction Are Applied in Determining Definiteness Claim definiteness under Section 112, second paragraph is determined by using the rules of claim construction (as discussed in Chapter 2).

V. Means-Plus-Function Claims Are Indefinite Under Section 112, Second Paragraph, if the Specification Does Not Describe a Structure for Performing the Claimed Function Means-plus-function claims (described in Chapter 2) are invalid for indefiniteness under Section 112, second paragraph, if the specification does not contain an adequate description of the structure (the “means”) for accomplishing the claimed function. A common occurrence of this type of invalidity is in patents that have means-plus-function claims in which the structure in the specification is a general computer with no specific algorithm for performing the claimed function.

W. Section 101 and U.S. Supreme Court Precedent Define Patent-Eligible Subject Matter Section 101 and U.S. Supreme Court precedent define patent-eligible subject matter. Phenomena of nature, mental processes, and abstract intellectual concepts are not patent-eligible subjects; thus, patent claims to this subject matter are invalid. An example of claims that may be invalid due to lack of patenteligible subject matter are so-called business method claims. Under current Federal Circuit law (to which the U.S. Supreme Court has granted certiorari in 2009), to be patent-eligible, these types of claims must: (a) be tied to a particular machine or apparatus; or (b) transform a particular article into a different state or thing.

CHAP T ER

10 Patent Law Principle IV Enforceability

I. Overview of Patent Unenforceability

391

II. Special Concerns for Evaluations and Opinions of Patent Unenforceability

391

III. Inequitable Conduct (Fraud on the Patent Office)

393

A. Duty of Good Faith and Candor to the U.S. Post Office; Rule 56

393

B. Standard for Inequitable Conduct

393

C. Materiality

394

1. Examples of Material Information

396

D. The Showings of Materiality and Intent Generally Are Separate Requirements

396

E. Under Certain Circumstances Intent May Be Inferred from a Showing of Materiality

397

F. Burden of Proof and “Elevated Standard of Proof in the Inequitable Conduct Context”

399

G. After Proving Materiality and Intent by the “Threshold” of Clear and Convincing Evidence, a Court Must Still “Balance” the Levels of Materiality and Intent to Determine Whether a Holding of Inequitable Conduct and Patent Unenforceability Is Warranted

400

H. Curing Unenforceability Due to Inequitable Conduct in Procuring a U.S. Patent

401

IV. Unenforceability Due to Patent Misuse

404

A. Patent Misuse Arises When the Patentee Has Impermissibly Broadened the Scope of the Patent Grant with Anticompetitive Effect

404

B. Patent Misuse Is a Broader Wrong Than an Antitrust Violation and Thus May Exist Where Antitrust Conditions Do Not

405

389

390 Chapter 10 Patent Law Principle IV C. Per Se Patent Misuse

406

D. Actions That Statutorily Do Not Constitute Patent Misuse

406

E. Patent Misuse That Is Not Per Se Misuse or Exempted Under Section 271(d) Is Determined by a Rule of Reason Analysis

407

F. Curing Unenforceability Due to Misuse of an Issued U.S. Patent

407

V. Practice Points

408

A. Evaluations and Opinions of Patent Unenforceability Should Generally Be Avoided

408

B. Distinguish between Invalidity and Unenforceability

408

C. There Are Two Distinct Types of Patent Unenforceability: Inequitable Conduct (Fraud on the Patent Office) and Patent Misuse

408

D. Inequitable Conduct Is an Intentional Breach of a Patent Applicant’s Duty of Good Faith and Candor to the U.S. Patent Office

409

E. Proof of Inequitable Conduct Requires Clear and Convincing Evidence of Materiality and Intent

409

F. Materiality Can Encompass Any Information Where There Is a Substantial Likelihood That a Reasonable Examiner Would Consider It Important in Deciding Whether to Allow the Application to Issue as a Patent

409

G. Materiality and Intent Are Separate Requirements

409

H. In Certain Situations, Intent May Be Inferred from Materiality

410

I. Even Where Materiality and Intent Have Been Proven by Clear and Convincing Evidence, a Court Still May Not Find a Patent Unenforceable

410

J. Inequitable Conduct May Only Be “Cured” If Done So in the Application (or a Related Application) Before a Patent Is Issued

410

K. Patent Misuse Arises When a Patent Owner Impermissibly Broadens the Scope of the Patent Grant With Anticompetitive Effect

410

L. Tying and Extending a Patent’s Term by Requiring Post-Expiration Royalties Is Per Se Misuse

411

M. Section 271(d) of the Patent Statute Sets Forth Actions That Are Not Patent Misuse

411

N. A Patent is Only Unenforceable Based On Patent Misuse Until the Misuse Is Cured

411

Special Concerns for Evaluations and Opinions of Patent Unenforceability 391

Usage Note: This chapter covers patent unenforceability, including inequitable conduct ( fraud on the Patent Office) and patent misuse. Because unenforceability relates to acts taken with respect to a patent’s claimed invention, Chapter 2 (claim construction) is of particular importance to this chapter. Chapters 6–9, which cover patent invalidity, are likewise also particularly relevant.

I. Overview of Patent Unenforceability Patent enforceability is a non-statutory extension of the equitable doctrine of “unclean hands”; under it, a court will not lend its support to enforcement of a patent that has been obtained through fraud on the Patent Office (also known as inequitable conduct) or where an issued patent has been misused.1 Unlike patent validity (discussed in Chapters 6–9), which is decided on a claim-by-claim basis, when a patent is held to be unenforceable, the entire patent is unenforceable.2 Additionally, there is no direct relationship between patent unenforceability and patent invalidity. For example, a patent’s claims may be valid but unenforceable.3 The following discussion of patent unenforceability is divided by the two forms of unenforceability: (a) inequitable conduct in the procurement of a U.S. patent; and (b) patent misuse.

II. Special Concerns for Evaluations and Opinions of Patent Unenforceability Evaluations and opinions of unenforceability of third party patents are rare, especially opinions of unenforceability for purposes of avoiding willful infringement. This is understandably the case because a court’s determination of unenforceability is highly fact-dependent. When evaluating or opining on a third party’s patent, the opinion drafter generally lacks access to the facts necessary to fully evaluate and determine the strengths and weaknesses of an opinion of unenforceability. Indeed, when evaluating a third party patent for any issue (including for potential inequitable conduct), the only evidence that is typically available is the patent itself and the patent’s prosecution history

1. E.g., Qualcomm Inc. v. Broadcom Corp., 548 F.3d 1004, 1025–26 (Fed. Cir. 2008); Cargill, Inc. v. Canbra Foods, Ltd., 476 F.3d 1359, 1363–64 (Fed. Cir. 2007). 2. E.g., Qualcomm, 548 F.3d at 1025–26. 3. E.g., Bard. Inc. v. M3 Sys., Inc., 157 F.3d 1340, 1372 (Fed. Cir. 1998) (“Patent misuse arises in equity, and a holding of misuse renders the patent unenforceable until the misuse is purged; it does not, of itself, invalidate the patent.”).

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in the U.S. Patent Office. This evidence rarely, if ever, is sufficient to show the likelihood of a court finding a patent to be unenforceable. In fact, unenforceability is generally proven through evidence that only becomes available through the process of discovery in the context of patent litigation. This is particularly true when evaluating and opining on patent unenforceability based on inequitable conduct (fraud on the Patent Office in procuring a U.S. patent). As discussed below, proving inequitable conduct requires: [S]howing by “clear and convincing evidence that the applicant (1) made an affirmative misrepresentation of material fact, failed to disclose material information, or submitted false material information, and (2) intended to deceive the [Patent and Trademark Office].” Cargill, Inc. v. Canbra Foods, Ltd., 476 F.3d 1359, 1363 (Fed. Cir. 2007).4

Still further, even when a challenger has shown both materiality and intent by clear and convincing evidence, a court may still not hold a patent to be unenforceable. As explained by the Federal Circuit: Even if this elevated evidentiary burden met as to both elements [i.e., proving both materiality and intent by clear and convincing evidence], the district court must still balance the equities to determine whether the applicant’s conduct before the PTO was egregious enough to warrant holding the entire patent unenforceable.5

Therefore, it is clearly difficult to predict with reasonable certainty that, based on publicly available information, a reasonable court would hold a third party’s patent to be unenforceable. This difficulty was highlighted by the Federal Circuit in Johns Hopkins Univ. v. Cellpro, where the court held that an opinion of counsel of patent unenforceability was not sufficiently competent to support reasonable reliance on the opinion by an infringer necessary to avoid a finding of willful infringement.6 In particular, the Cellpro court found that the opinion of unenforceability was conclusory and failed to address the intent element of inequitable conduct.7 In Cellpro, the Federal Circuit not only found willful infringement in part for lack of reasonable reliance on a competent opinion, but also affirmed the trebling of the infringement damages.8 For these reasons, this chapter discusses the general principles of inequitable conduct, but does not provide an exhaustive analysis of the topic.

4. 5. 6. 7. 8.

Praxair, Inc. v. ATMI, Inc., 543 F.3d 1306, 1313 (Fed. Cir. 2008) (bracketing in original). Star Sci., Inc. v. R.J. Reynolds Tobacco Co., 537 F.3d 1357, 1365–1366 (Fed. Cir. 2008). Johns Hopkins Univ. v. Cellpro, Inc., 152 F.3d 1342, 1364–1365 (Fed. Cir. 1998). Id. Id. at 1365.

Inequitable Conduct (Fraud on the Patent Office) 393

III. Inequitable Conduct (Fraud on the Patent Office) A U.S. patent may be held unenforceable when a court determines that a patentee obtained a patent through fraud on the Patent Office. Applicants have a duty of good faith and candor when prosecuting patent applications before the U.S. Patent Office, which includes a duty to bring to the attention of the Patent Office all evidence material to the patentability of the pending claims. Fraud on the Patent Office occurs when an applicant with the intent to deceive the Patent Office makes an affirmative misrepresentation of material fact, fails to disclose material information, or submits false material information to the Patent Office. If a court finds the applicant sufficiently culpable of fraud on the Patent Office, it can refuse to enforce the patent. A patent that is unenforceable cannot be enforced for any claims even if the inequitable conduct pertained only to a subset of the patent’s claims.

A. Duty of Good Faith and Candor to the U.S. Post Office; Rule 56 The basis of inequitable conduct is an intentional violation of a patentee’s duty of good faith and candor to the U.S. Patent Office when prosecuting a patent application before it. As explained by the Federal Circuit: “Each individual associated with the filing and prosecution of a patent application has a duty of candor and good faith in dealing with the [PTO], which includes a duty to disclose to the [PTO] all information known to that individual to be material to patentability. . . .” 37 C.F.R. § 1.56(a); see also Honeywell Int’l Inc. v. Universal Avionics Sys. Corp., 488 F.3d 982, 999 (Fed. Cir. 2007) (“Applicants for patents have a duty to prosecute patent applications in the Patent Office with candor, good faith, and honesty”).9

B. Standard for Inequitable Conduct The Federal Circuit has put forth a two-pronged test for determining when a patentee has committed inequitable conduct in the procurement of a U.S. patent. Inequitable conduct in breach of this duty can be established by showing by “clear and convincing evidence that the applicant (1) made an affirmative

9. Praxair, 543 F.3d at 1313; 37 C.F.R. § 1.56(a) (U.S. Patent Office rule setting forth a patent applicant’s duty of good faith and candor to the Patent Office in the prosecution of a patent application before the Office).

394 Chapter 10 Patent Law Principle IV misrepresentation of material fact, failed to disclose material information, or submitted false material information, and (2) intended to deceive the [Patent and Trademark Office].” Cargill, Inc. v. Canbra Foods, Ltd., 476 F.3d 1359, 1363 (Fed. Cir. 2007).10

“A patent may be rendered unenforceable for inequitable conduct if an applicant, with intent to mislead or deceive the examiner, fails to disclose material information or submits materially false information to the PTO during prosecution.”11

C. Materiality The Federal Circuit has explained the “materiality” aspect of inequitable conduct as follows: The materiality of information withheld during prosecution may be judged by the “reasonable examiner” standard. See Digital Control Inc. v. Charles Mach. Works, 437 F.3d 1309, 1316 (Fed. Cir. 2006). That is, “[m]ateriality . . . embraces any information that a reasonable examiner would substantially likely consider important in deciding whether to allow an application to issue as a patent.” Akron Polymer, 148 F.3d at 1382 (citations omitted). Moreover, “[i]nformation concealed from the PTO may be material even though it would not invalidate the patent.” Li Second Family v. Toshiba Corp., 231 F.3d 1373, 1380 (Fed. Cir. 2000). “However, a withheld otherwise material [piece of information] is not material for the purposes of inequitable conduct if it is merely cumulative to that information considered by the examiner.” Digital Control, 437 F.3d at 1319.12

The court further stated: With respect to the materiality prong, we have held that “information is material when a reasonable examiner would consider it important in deciding whether to allow the application to issue as a patent.” Symantec Corp. v. Computer Assocs. Int’l, Inc., 522 F.3d 1279, 1297 (Fed. Cir. 2008); see also Digital Control, Inc. v. Charles Mach. Works, 437 F.3d 1309, 1314 (Fed. Cir. 2006). It is wellestablished, however, that information is not material if it is cumulative of other

10. Praxair, 543 F.3d at 1313 (bracketing in original). 11. McKesson Info. Solutions, Inc. v. Bridge Med., Inc., 487 F.3d 897, 913 (Fed. Cir. 2007) (quoting Digital Control Inc. v. Charles Mach. Works, 437 F.3d 1309, 1313 (Fed. Cir. 2006)) (internal quotation marks omitted). 12. Id.

Inequitable Conduct (Fraud on the Patent Office) 395 information already disclosed to the PTO. Honeywell Int’l Inc. v. Universal Avionics Sys. Corp., 488 F.3d 982, 1000 (Fed. Cir. 2007) (“Information cumulative of other information already before the Patent Office is not material.”); 37 C.F.R. § 1.56(b) (“[I]nformation is material to patentability when it is not cumulative to information already of record or being made of record in the application. . . .”).13

Still further, the Federal Circuit has explained that the term material information as used in Rule 56 (37 C.F.R. § 1.56(a)) means: [A]ll of the kinds of information required to be disclosed and includes any information which is “material to the examination of the application.” . . . The term “information” is intended to be all encompassing. . . . [Section 1.56(a)] is not limited to information which would render the claims unpatentable, but extends to any information where there is a substantial likelihood that a reasonable examiner would consider it important in deciding whether to allow the application to issue as a patent. . . . All individuals covered by § 1.56 . . . have a duty to disclose to the Patent and Trademark Office all material information they are aware of, or reasonably should have been aware of . . . , regardless of the source of or how they became aware of the information. Materiality controls whether information must be disclosed to the Office, not the circumstances under which or the source from which the information is obtained. If material, the information must be disclosed to the Office. The duty to disclose material information extends to information such individuals are aware of prior to or at the time of filing the application or become aware of during the prosecution thereof. Such individuals may be or become aware of material information from various sources such as, for example, co-workers, tradeshows, communications from or with competitors, potential infringers or other third parties, related foreign applications . . . , prior or co-pending United States patent applications . . . , related litigation . . . and preliminary examination searches. . . . [T]he above explanations apply with full force to information obtained with respect to co-pending applications: The individuals covered by 37 C.F.R. 1.56(a) have a duty to bring to the attention of the examiner . . . information within their knowledge as to other co-pending United States applications which are “material to the examination” of the application in question. Thus, [there is] no doubt that material rejections in co-pending applications fall squarely within the duty of candor.14

13. Star Sci., Inc. v. R.J. Reynolds Tobacco Co., 537 F.3d 1357, 1367 (Fed. Cir. 2008) (emphasis added). 14. Id. at 922–23 (citations and some quotation marks omitted, emphasis, ellipses, and some bracketing in original, emphasis added).


1. Examples of Material Information As stated above, material information is clearly more than only prior art under Section 102. Specifically, the definition of material information is intended to be all encompassing. . . . [Section 1.56(a)] is not limited to information which would render the claims unpatentable, but extends to any information where there is a substantial likelihood that a reasonable examiner would consider it important in deciding whether to allow the application to issue as a patent.”15

The following is a non-limiting list of information that the Federal Circuit has held to be material in the context of inequitable conduct: (a) a nonSection 102 prior art reference that cast doubt on the enablement of the pending claims;16 (b) co-pending U.S. patent applications, including the existence of the applications, prior art cited in the applications, the allowance of claims in the applications, and Office Actions in the applications;17 (c) declarations submitted to the Patent Office containing false or misleading information;18 (d) evidence relating to the priority of invention;19 (e) inaccurate assertion of small entity status;20 and (f) descriptions of prophetic examples in the specification written in the past tense.21

D. The Showings of Materiality and Intent Generally Are Separate Requirements The Federal Circuit has explained that, generally, the showings of materiality and intent are separate requirements: The required showings of materiality and intent are separate, and a showing of materiality alone does not give rise to a presumption of intent to deceive. See Kingsdown Med. Consultants, Ltd. v. Hollister, Inc., 863 F.2d 867 (Fed. Cir. 1988); see also M. Eagles Tool Warehouse, Inc. v. Fisher Tooling Co., Inc., 439 F.3d 1335,

15. Id. (bracketing and emphasis in original, emphasis added). 16. Bristol-Myers Squibb Co. v. Rhone-Poulenc Rorer, Inc., 326 F.3d 1226, 1242 (Fed. Cir. 2003). 17. E.g., McKesson Info. Solutions, Inc. v. Bridge Med., Inc., 487 F.3d 897, 926 (Fed. Cir. 2007); Li Second Family v. Toshiba Corp., 231 F.3d 1373, 1380 (Fed. Cir. 2000). 18. E.g., eSpeed, Inc. v. BrokerTec USA, L.L.C., 480 F.3d 1129, 1136 (Fed. Cir. 2007); Ferring B.V. v. Barr Labs., Inc., 437 F.3d 1181, 1188 (Fed. Cir. 2006); Pharmacia Corp. v. Par Pharm., Inc., 417 F.3d 1369, 1373 (Fed. Cir. 2005); Perseptive Biosystems, Inc. v. Pharmacia Biotech, Inc., 225 F.3d 1315, 1322 (Fed. Cir. 2000). 19. E.g., GFI, Inc. v. Franklin Corp., 265 F.3d 1268, 1274 (Fed. Cir. 2001). 20. E.g., Ulead Sys., Inc. v. Computer & Mgmt. Corp., 351 F.3d 1139, 1144–46 (Fed. Cir. 2003). 21. E.g., Novo Nordisk Pharma., Inc. v. Bio-Technology General Corp., 424 F.3d 1347, 1363 (Fed. Cir. 2005); Hoffman-La Roche, Inc. v. Promega Corp., 323 F.3d 1354, 1371–72 (Fed. Cir. 2003).

Inequitable Conduct (Fraud on the Patent Office) 397 1341 (Fed. Cir. 2006) (“[A] failure to disclose a prior art device to the PTO, where the only evidence of intent is a lack of a good faith explanation for the nondisclosure, cannot constitute clear and convincing evidence sufficient to support a determination of culpable intent”).22

The court has further explained that a showing of specific intent is required: With regard to the deceptive intent prong, we have emphasized that “materiality does not presume intent, which is a separate and essential component of inequitable conduct.” GFI, Inc. v. Franklin Corp., 265 F.3d 1268, 1274 (Fed. Cir. 2001). Moreover, as we explained in Molins PLC v. Textron, Inc.: [T]he alleged conduct must not amount merely to the improper performance of, or omission of, an act one ought to have performed. Rather, clear and convincing evidence must prove that an applicant had the specific intent to . . . mislead [] or deceiv[e] the PTO. In a case involving nondisclosure of information, clear and convincing evidence must show that the applicant made a deliberate decision to withhold a known material reference. 48 F.3d 1172, 1181 (Fed. Cir. 1995) (emphases added). Thus, the fact that information later found material was not disclosed cannot, by itself, satisfy the deceptive intent element of inequitable conduct. M. Eagles Tool Warehouse, Inc. v. Fisher Tooling Co., 439 F.3d 1335, 1340 (Fed. Cir. 2006). Rather, to prevail on the defense, the accused infringer must prove by clear and convincing evidence that the material information was withheld with the specific intent to deceive the PTO. Id.; see also Kingsdown Med. Consultants, Ltd. v. Hollister Inc., 863 F.2d 867, 876 (Fed. Cir. 1988) (en banc) (holding even gross negligence insufficient to prove intent to deceive).23

E. Under Certain Circumstances Intent May Be Inferred from a Showing of Materiality The Federal Circuit has recognized: [T]hat because direct evidence of deceptive intent is rarely available, such intent can be inferred from indirect and circumstantial evidence. Cargill, 476 F.3d at 1364. But such evidence must still be clear and convincing, and inferences drawn from lesser evidence cannot satisfy the deceptive intent requirement. See Ferring, 437 F.3d at 1186 (“The predicate facts must be proven by clear and convincing

22. Praxair, Inc. v. ATMI, Inc., 543 F.3d 1306, 1313 (Fed. Cir. 2008). 23. Star Sci., Inc. v. R.J. Reynolds Tobacco Co., 537 F.3d 1357, 1366 (Fed. Cir. 2008) (emphasis in original, emphasis added).

398 Chapter 10 Patent Law Principle IV evidence.”). Further, the inference must not only be based on sufficient evidence and be reasonable in light of that evidence, but it must also be the single most reasonable inference able to be drawn from the evidence to meet the clear and convincing standard. Scanner Techs. Corp. v. ICOS Vision Sys. Corp., 528 F.3d 1365, 1376 (Fed. Cir. 2008) (“Whenever evidence proffered to show either materiality or intent is susceptible of multiple reasonable inferences, a district court clearly errs in overlooking one inference in favor of another equally reasonable inference”).24

As explained by the court in McKesson: “The intent element of the offense is . . . in the main proven by inferences drawn from facts, with the collection of inferences permitting a confident judgment that deceit has occurred.” Akron Polymer, 148 F.3d at 1384. “However, inequitable conduct requires not intent to withhold, but rather intent to deceive. Intent to deceive cannot be inferred simply from the decision to withhold [information] where the reasons given for the withholding are plausible.” Dayco, 329 F.3d at 1367. In addition, “a finding that particular conduct amounts to ‘gross negligence’ does not of itself justify an inference of intent to deceive; the involved conduct, viewed in light of all the evidence, including evidence indicative of good faith, must indicate sufficient culpability to require a finding of intent to deceive.” Kingsdown Med. Consultants, Ltd. v. Hollister Inc., 863 F.2d 867, 876 (Fed. Cir. 1988) (en banc in relevant part).25

Finally, as summarized by the Federal Circuit in Praxair: An inference of intent to deceive is generally appropriate, however, when (1) highly material information is withheld; (2) “the applicant knew of the information [and] . . . knew or should have known of the materiality of the information; and (3) the applicant has not provided a credible explanation for the withholding.” Ferring B.V. v. Barr Labs., Inc., 437 F.3d 1181, 1191 (Fed. Cir. 2006); see also Pfizer, Inc. v. Teva Pharms. USA, Inc., 518 F.3d 1353, 1367 (Fed. Cir. 2008) (applying the standard set out in Ferring to conclude that no inference of intent was possible in the face of a credible good faith explanation for the withholding); Critikon, Inc. v. Becton Dickinson Vascular Access, Inc., 120 F.3d 1253, 1257 (Fed. Cir. 1997) (“[A] patentee facing a high level of materiality and clear proof that it knew or should have known of that materiality, can expect to find it difficult to establish ‘subjective good faith’ sufficient to prevent the drawing of an inference of intent to mislead”)26

24. Id. at 1366–67 (emphasis added). 25. McKesson Info. Solutions, Inc. v. Bridge Med., Inc., 487 F.3d 897, 913 (Fed. Cir. 2007) (emphasis added). 26. Praxair, 543 F.3d at 1313–14 (emphasis added).


F. Burden of Proof and “Elevated Standard of Proof in the Inequitable Conduct Context” The Federal Circuit has held that a party alleging inequitable conduct has the burden of proving unenforceability by clear and convincing evidence.27 The court has also held there is an “elevated standard of proof in the inequitable conduct context . . . because the penalty for inequitable conduct is so severe. . . .”28 As explained by the court: The burden of proving inequitable conduct lies with the accused infringer. Ulead Sys., Inc. v. Lex Computer & Mgmt. Corp., 351 F.3d 1139, 1146 (Fed. Cir. 2003). To successfully prove inequitable conduct, the accused infringer must present “evidence that the applicant (1) made an affirmative misrepresentation of material fact, failed to disclose material information, or submitted false material information, and (2) intended to deceive the [PTO].” Cargill, 476 F.3d at 1363 (citing Impax Labs., 468 F.3d at 1374). Further, at least a threshold level of each element—i.e., both materiality and intent to deceive—must be proven by clear and convincing evidence. Id.; Digital Control Inc. v. Charles Mach. Works, 437 F.3d 1309, 1313 (Fed. Cir. 2006). And even if this elevated evidentiary burden is met as to both elements, the district court must still balance the equities to determine whether the applicant’s conduct before the PTO was egregious enough to warrant holding the entire patent unenforceable. Monsanto Co. v. Bayer BioScience B.V., 363 F.3d 1235, 1239 (Fed. Cir. 2004). Thus, even if a threshold level of both materiality and intent to deceive are proven by clear and convincing evidence, the court may still decline to render the patent unenforceable. The need to strictly enforce the burden of proof and elevated standard of proof in the inequitable conduct context is paramount because the penalty for inequitable conduct is so severe, the loss of the entire patent even where every claim clearly meets every requirement of patentability.29

The court further explained: This penalty was originally applied only in cases of “fraud on the Patent Office.” See Hazel-Atlas Glass Co. v. Hartford-Empire Co., 322 U.S. 238, 250–51, 64 S. Ct. 997, 88 L. Ed. 1250 (1944); see also Precision Instrument Mfg. Co. v. Auto. Maint. Mach. Co., 324 U.S. 806, 816, 65 S. Ct. 993, 89 L. Ed. 1381 (1945) (“The farreaching social and economic consequences of a patent, therefore, give the public a paramount interest in seeing that patent [grants] spring from backgrounds free from fraud or other inequitable conduct and that such [grants] are kept within their legitimate scope.”); Digital Control, 437 F.3d at 1315

27. E.g., Star Sci., 537 F.3d at 1365–1366 (Fed. Cir. 2008). 28. Id. (emphasis added). 29. Id. (emphasis added).

400 Chapter 10 Patent Law Principle IV (discussing the roots of inequitable conduct in common law fraud). Subsequent case law has broadened the doctrine to encompass misconduct less egregious than fraud, see for example Nobelpharma AB v. Implant Innovations, Inc., 141 F.3d 1059, 1069–70 (Fed. Cir. 1998), but the severity of the penalty has not changed, and thus courts must be vigilant in not permitting the defense to be applied too lightly. Just as it is inequitable to permit a patentee who obtained his patent through deliberate misrepresentations or omissions of material information to enforce the patent against others, it is also inequitable to strike down an entire patent where the patentee only committed minor missteps or acted with minimal culpability or in good faith. As a result, courts must ensure that an accused infringer asserting inequitable conduct has met his burden on materiality and deceptive intent with clear and convincing evidence before exercising its discretion on whether to render a patent unenforceable.30

G. After Proving Materiality and Intent by the “Threshold” of Clear and Convincing Evidence, a Court Must Still “Balance” the Levels of Materiality and Intent to Determine Whether a Holding of Inequitable Conduct and Patent Unenforceability Is Warranted As explained by the Federal Circuit in McKesson: “The party asserting inequitable conduct must prove a threshold level of materiality and intent by clear and convincing evidence.” Digital Control, 437 F.3d at 1313. “The court must then determine whether the questioned conduct amounts to inequitable conduct by balancing the levels of materiality and intent, ‘with a greater showing of one factor allowing a lesser showing of the other.’“ Id. (quoting Union Pac. Res. Co. v. Chesapeake Energy Corp., 236 F.3d 684, 693 (Fed. Cir. 2001)).31

In Praxair, the Federal Circuit noted: “Once threshold findings of materiality and intent are established, the trial court must weigh them to determine whether the equities warrant a conclusion that inequitable conduct occurred.” Purdue Pharma L.P. v. Endo Pharms. Inc., 438 F.3d 1123, 1128 (Fed. Cir. 2006).32

30. Id. at 1365–66 (emphasis added). 31. McKesson Info. Solutions, Inc. v. Bridge Med., Inc., 487 F.3d 897, 913 (Fed. Cir. 2007) (emphasis added). 32. Praxair, Inc. v. ATMI, Inc., 543 F.3d 1306, 1314 (Fed. Cir. 2008).


Finally, in Star Scientific the court stated: If a threshold level of intent to deceive or materiality is not established by clear and convincing evidence, the district court does not have any discretion to exercise and cannot hold the patent unenforceable regardless of the relative equities or how it might balance them. See Nordberg, Inc. v. Telsmith, Inc., 82 F.3d 394, 398 (Fed. Cir. 1996) (holding that the district court properly refrained from balancing materiality and intent when a threshold showing of intent to deceive was not clearly and convincingly made). Only after adequate showings are made as to both materiality and deceptive intent may the district court look to the equities by weighing the facts underlying those showings. “The more material the omission or the misrepresentation, the lower [the] level of intent [is] required to establish inequitable conduct, and vice versa.” Critikon, Inc. v. Becton Dickinson Vascular Access, Inc., 120 F.3d 1253, 1256 (Fed. Cir. 1997). At this second stage, however, the question is no longer whether materiality and/ or intent to deceive were proven with evidence that is sufficiently clear and convincing. While the facts of materiality and intent to deceive must be proven by clear and convincing evidence, the district court must balance the substance of those now-proven facts and all the equities of the case to determine whether the severe penalty of unenforceability should be imposed. It is this balancing that is committed to the district court’s discretion. Molins, 48 F.3d at 1178.33

H. Curing Unenforceability Due to Inequitable Conduct in Procuring a U.S. Patent Inequitable conduct (fraud) in the prosecution of a U.S. patent application can be cured if, during the application (or a related application) in which the fraud occurs, the applicant: (a) expressly advises the Patent Office of the existence of a prior misrepresentation, including stating specifically wherein it was made; (b) advises the Patent Office of the actual facts; (c) indicates that further examination may be necessary; and (d) establishes that the subject matter is patentable in view of the actual facts.34 The Federal Circuit explained this as follows: Specifically, the narrow issue we now deal with is whether voluntary efforts during prosecution by or on behalf of an applicant, knowing that misrepresentations have been made to the examiner of his application, can ever alleviate its effect. Taking into account human frailty and all of the objectives of the patent system,

33. Star Sci., 537 F.3d at 1367 (emphasis and bracketing in original, emphasis added). 34. Rohm & Haas Co. v. Crystal Chemical Co., 722 F.2d 1556, 1571–72 (Fed. Cir. 1983).

402

Chapter 10 Patent Law Principle IV we think it desirable to permit misdeeds to be overcome under certain limited circumstances. The first requirement to be met by an applicant, aware of misrepresentation in the prosecution of his application and desiring to overcome it, is that he expressly advise the PTO of its existence, stating specifically wherein it resides. The second requirement is that, if the misrepresentation is of one or more facts, the PTO be advised what the actual facts are, the applicant making it clear that further examination in light thereof may be required if any PTO action has been based on the misrepresentation. Finally, on the basis of the new and factually accurate record, the applicant must establish patentability of the claimed subject matter. Considering the overall objectives of the patent system, we think it desirable that inventions meeting the statutory requirements for patentability be patented and, therefore, we also think it desirable to reserve the possibility of expiation of wrongdoing where an applicant chooses to take the necessary action on his own initiative and to take it openly.35

However, the court cautioned: It does not suffice that one knowing of misrepresentations in an application or in its prosecution merely supplies the examiner with accurate facts without calling his attention to the untrue or misleading assertions sought to be overcome, leaving him to formulate his own conclusions.36

In a somewhat similar case, Young v. Lumenis, the Federal Circuit allowed a patentee to cure an omission when the omission and the rectifying of the omission both occurred in the same reexamination proceeding, and the omission was rectified by disclosing the material to the Examiner before issuance of a final Office Action.37 The Federal Circuit explained the case as follows: We next consider whether there was a “failure to disclose” material information to the PTO sufficient to constitute inequitable conduct when that information was disclosed before the examiner’s final Office Action, albeit only after the issue of disclosure was raised in a parallel district court action. n1 On January 9, 2006, Lumenis filed a motion in the district court for a judgment of unenforceability based on inequitable conduct during the reexamination. Shortly thereafter, on January 30, 2006, Young submitted the Hedlund deposition testimony to the PTO. That submission occurred after the examiner had issued its first Office Action in the reexamination, but more than five months before the examiner

35. Id. 36. Id. at 1572. 37. Young v. Lumenis, Inc., 492 F.3d 1336 (Fed. Cir. 2007).

Inequitable Conduct (Fraud on the Patent Office) 403 had issued a second Office Action. The examiner was therefore fully apprised of the Hedlund deposition testimony and was able to fully consider it and any potential effects it may have on the patentability of the claims before issuing his second Office Action. Thus, we cannot agree that there was inequitable conduct resulting from the “failure to disclose material information” when that information was disclosed to the PTO in time for the examiner to consider it. The essence of the duty of disclosure is to get relevant information before an examiner in time for him to act on it, and that did occur here. n1 For purposes of our conclusion, we assume that the deposition testimony was material. The district court relied on Rohm & Haas for its inequitable conduct holding, but we regard that case as distinguishable, involving different facts, particularly because in that case the issue related to an alleged false affidavit, where a cure hurdle may be higher than here. In this case, the issue related to an alleged omission, and that omission was cured by a timely submission. See, e.g., Scripps Clinic & Research Found. v. Genentech, Inc., 927 F.2d 1565, 1582 (Fed. Cir. 1991) (“When a reference was before the examiner, whether through the examiner’s search or the applicant’s disclosure, it can not be deemed to have been withheld from the examiner.”). Because the district court clearly erred in determining that the statements in the October 2005 Response were affirmative misrepresentations of material fact and because there was no failure to disclose information while the reexamination was still pending before the PTO, we conclude that the district court erred in granting summary judgment of inequitable conduct.38

However, once a patent issues that has inequitable conduct in its prosecution history, the inequitable conduct cannot be cured, such as by a postissuance reissue proceeding. The Federal Circuit has been careful to draw a distinction between curing fraud before an application issues as a U.S. patent (i.e., curing fraud in the same application, or a related application, in which the fraud originally occurred, such that the fraud is cured before any patent issues), and curing fraud after a patent issues. As explained by the Federal Circuit: [W]e wish to focus as sharply as possible on the exact issue before us. In this case . . . [t]he assertion of invalidity . . . is based on what occurred during the prosecution of the application—more accurately, the whole sequence of copending applications. The problem, therefore, is what, if anything, could have been done in the [Patent and Trademark Office] during prosecution to cure or overcome misconduct consisting of intentional misstatements of asserted material facts so as to have saved the later issued patent from the consequences of

38. Id. at 1349–50.

404 Chapter 10 Patent Law Principle IV the misconduct. We are not dealing with the question of what, if anything, can be done after the patent issued to alleviate the effect of misconduct, as did one of our predecessor courts in In re Clark, 522 F.2d 623 (CCPA 1975) (unsuccessful attempt to overcome failure to inform the [Patent and Trademark Office] of highly relevant prior art by reissue of patent).39

In In re Clark, the predecessor court to the Federal Circuit held that reissue proceedings cannot be used to cure patents of fraud that occurred, uncorrected, in the prosecution of a patent: Reissue is not available to rescue a patentee who had presented claims limited to avoid particular prior art and then had failed to disclose that prior art (the examiner not having cited it) after that failure to disclose has resulted in the invalidating of the claims. The sole goal of appellant in soliciting a reissue is to have the examiner reexamine his claims in light of the reference he originally failed to disclose in order, apparently, to relieve him of the consequences of his failure.40

IV. Unenforceability Due to Patent Misuse Patent use—which can also lead to patent unenforceability—is caused by the actions of the patentee after a patent has issued.

A. Patent Misuse Arises When the Patentee Has Impermissibly Broadened the Scope of the Patent Grant with Anticompetitive Effect As explained by the Federal Circuit in C.R. Bard: The defense of patent misuse arises from the equitable doctrine of unclean hands, and relates generally to the use of patent rights to obtain or to coerce an unfair commercial advantage. Patent misuse relates primarily to a patentee’s actions that affect competition in unpatented goods or that otherwise extend the economic effect beyond the scope of the patent grant. See Mallinckrodt, Inc. v. Medipart, Inc., 976 F.2d 700, 703–04 (Fed. Cir. 1992) (“The concept of patent

39. Rohm & Haas, 722 F.2d at 1571. 40. In re Clark, 522 F.2d 623, 627 (C.C.P.A. 1975); Rohm, 722 F.2d at 1572 (“[O]ne of our predecessor courts in In re Clark, 522 F.2d 623 (CCPA 1975) [found an] unsuccessful attempt to overcome failure to inform the PTO of highly relevant prior art by reissue of patent[.]”).

Unenforceability Due to Patent Misuse 405 misuse arose to restrain practices that did not in themselves violate any law, but that draw anticompetitive strength from the patent right, and thus were deemed to be contrary to public policy.”). . . . The key inquiry is whether, by imposing conditions that derive their force from the patent, the patentee has impermissibly broadened the scope of the patent grant with anticompetitive effect. See Virginia Panel Corp. v. MAC Panel Co., 133 F.3d 860, 868 (Fed. Cir. 1997); B. Braun Medical, Inc. v. Abbott Labs., 124 F.3d 1419, 1426 (Fed. Cir. 1997); Mallinckrodt, 976 F.2d at 704.41

As explained by the Federal Circuit in Monsanto: The policy of the patent misuse doctrine is “to prevent a patentee from using the patent to obtain market benefit beyond that which inures in the statutory patent right.” Mallinckrodt, Inc. v. Medipart, Inc., 976 F.2d 700, 704 (Fed. Cir. 1992). Therefore, in evaluating a patent-misuse defense, “the key inquiry is whether, by imposing conditions that derive their force from the patent, the patentee has impermissibly broadened the scope of the patent grant with anticompetitive effect.” C.R. Bard, Inc. v. M3 Sys., 157 F.3d 1340, 1372 (Fed. Cir. 1998); see also Va. Panel Corp. v. MAC Panel Co., 133 F.3d 860, 868 (Fed. Cir. 1997); Mallinckrodt, 976 F.2d at 708; Windsurfing Int’l, Inc. v. AMF, Inc., 782 F.2d 995, 1001 (Fed. Cir. 1986). In the cases in which the restriction is reasonably within the patent grant, the patent misuse defense can never succeed. See Gen. Talking Pictures Corp. v. W. Elec. Co., 305 U.S. 124, 127, 83 L. Ed. 81, 59 S. Ct. 116 (1938); B. Braun Med., Inc. v. Abbott Labs., 124 F.3d 1419, 1426–27 (Fed. Cir. 1997); Mallinckrodt, 976 F.2d at 708.42

B. Patent Misuse Is a Broader Wrong Than an Antitrust Violation and Thus May Exist Where Antitrust Conditions Do Not The Federal Circuit has explained: Patent misuse is viewed as a broader wrong than antitrust violation because of the economic power that may be derived from the patentee’s right to exclude. Thus misuse may arise when the conditions of antitrust violation are not met. See Zenith Radio Corp. v. Hazeltine Research, Inc., 395 U.S. 100, 140–41, 23 L. Ed. 2d 129, 89 S. Ct. 1562 (1969).43

41. C.R. Bard v. M3 Sys., 157 F.3d 1340, 1372 (Fed. Cir. 1998) (emphasis added). 42. Monsanto Co. v. McFarling, 363 F.3d 1336, 1341 (Fed. Cir. 2004) (emphasis added). 43. C.R. Bard, 157 F.3d at 1372.


C. Per Se Patent Misuse The Federal Circuit has explained that in certain specific circumstances (a detailed the discussion of which is beyond the scope of this treatise) tying and requiring royalties beyond the term of a patent may be per se patent misuse: The courts have identified certain specific practices as constituting per se patent misuse, including so-called “tying” arrangements in which a patentee conditions a license under the patent on the purchase of a separable, staple good, see, e.g., Morton Salt Co., 314 U.S. at 491, and arrangements in which a patentee effectively extends the term of its patent by requiring post-expiration royalties, see, e.g., Brulotte v. Thys Co., 379 U.S. 29, 33, 13 L. Ed. 2d 99, 85 S. Ct. 176 (1964).44

D. Actions That Statutorily Do Not Constitute Patent Misuse “Congress, however, has established that other specific practices may not support a finding of patent misuse.”45 Specifically, Section 271(d) of the Patent Statute (35 U.S.C. § 271(d)) provides: No patent owner otherwise entitled to relief for infringement or contributory infringement of a patent shall be denied relief or deemed guilty of misuse or illegal extension of the patent right by reason of his having done one or more of the following: (1) derived revenue from acts which if performed by another without his consent would constitute contributory infringement of the patent; (2) licensed or authorized another to perform acts which if performed without his consent would constitute contributory infringement of the patent; (3) sought to enforce his patent rights against infringement or contributory infringement; (4) refused to license or use any rights to the patent; or (5) conditioned the license of any rights to the patent or the sale of the patented product on the acquisition of a license to rights in another patent or purchase of a separate product, unless, in view of the circumstances, the patent owner has market power in the relevant market for the patent or patented product on which the license or sale is conditioned.46

44. Virginia Panel Corp. v. MAC Panel Co., 133 F.3d 860, 869 (Fed. Cir. 1997) (emphasis added); Brulotte v. Thys Co., 379 U.S. 29, 33, 13 L. Ed. 2d 99, 85 S. Ct. 176 (1964). 45. Id.; Dawson Chem. Co. v. Rohm & Haas Co., 448 U.S. 176, 202, 65 L. Ed. 2d 696, 100 S. Ct. 2601 (1980). 46. 35 U.S.C.S. § 271(d) (2009).

Unenforceability Due to Patent Misuse 407

E. Patent Misuse That Is Not Per Se Misuse or Exempted Under Section 271(d) Is Determined by a Rule of Reason Analysis As explained by the Federal Circuit in Virginia Panel: When a practice alleged to constitute patent misuse is neither per se patent misuse nor specifically excluded from a misuse analysis by § 271(d), a court must determine if that practice is “reasonably within the patent grant, i.e., that it relates to subject matter within the scope of the patent claims.” Mallinckrodt, Inc. v. Medipart, Inc., 976 F.2d 700, 708 (Fed. Cir. 1992). If so, the practice does not have the effect of broadening the scope of the patent claims and thus cannot constitute patent misuse. If, on the other hand, the practice has the effect of extending the patentee’s statutory rights and does so with an anti-competitive effect, that practice must then be analyzed in accordance with the “rule of reason.” Under the rule of reason, “the finder of fact must decide whether the questioned practice imposes an unreasonable restraint on competition, taking into account a variety of factors, including specific information about the relevant business, its condition before and after the restraint was imposed, and the restraint’s history, nature, and effect.” State Oil Co. v. Khan, 139 L. Ed. 2d 199, 118 S. Ct. 275, 279 (1997) (citing Arizona v. Maricopa County Med. Soc., 457 U.S. 332, 343 & n.13, 73 L. Ed. 2d 48, 102 S. Ct. 2466 (1982)).47

F. Curing Unenforceability Due to Misuse of an Issued U.S. Patent Patents that have been misused are unenforceable.48 However, patent misuse may be cured, and the patents enforced. Patent misuse arises in equity, and a holding of misuse renders the patent unenforceable until the misuse is purged; it does not, of itself, invalidate the patent. See Morton Salt Co. v. G. S. Suppiger Co., 314 U.S. 488, 86 L. Ed. 363, 62 S. Ct. 402 (1942); Senza-Gel Corp. v. Seiffhart, 803 F.2d 661, 668 n.10 (Fed. Cir. 1986).49

47. Virginia Panel, 133 F.3d at 869 (some citations omitted, emphasis added). 48. B. Braun Med., Inc., v. Abbott Labs., 124 F.3d 1419, 1427 (Fed. Cir. 1997); C.R. Bard, 157 F.3d at 1372; Qualcomm Inc. v. Broadcom Corp., 548 F.3d 1004, 1025 (Fed. Cir. 2008). 49. C.R. Bard, 157 F.3d at 1372; Qualcomm, 548 F.3d at 1025 (“[P]atent misuse does not render a patent unenforceable for all time.”).


V. Practice Points A. Evaluations and Opinions of Patent Unenforceability Should Generally Be Avoided Evaluations and opinions of unenforceability of third party patents should generally be avoided. This is because when someone analyzes a third party’s patent, usually the only information available is that which is publicly available. This normally constitutes only the patent itself and its prosecution history in the U.S. Patent Office. A court’s determination of unenforceability is highly fact-dependent—and the evidence necessary to prove unenforceability is rarely publicly available. To determine unenforceability generally requires evidence that only becomes available through discovery in the context of patent litigation. This is particularly true when someone evaluates and opines on patent unenforceability based on inequitable conduct (fraud on the Patent Office in procuring a U.S. patent). Proof of inequitable conduct requires clear and convincing evidence that the applicant (a) made an affirmative misrepresentation of material fact, failed to disclose material information, or submitted false material information; and (b) intended to deceive the Patent Office. The risk of basing an opinion to avoid willful infringement on patent unenforceability due to inequitable conduct was emphasized by the Federal Circuit in Johns Hopkins.50 In that case, the court held that the accused infringer could not have reasonably relied on the opinion of unenforceability to avoid willful infringement because the opinion failed to properly address the patent applicant’s intent to deceive the Patent Office.51

B. Distinguish between Invalidity and Unenforceability Patent invalidity and unenforceability are distinct issues. Patent invalidity is statutorily based and applies on a claim-by-claim basis. Unenforceability is nonstatutory and is based in equity. When a patent is unenforceable, the entire patent is unenforceable. Further, a patent’s claims may be valid but unenforceable.

C. There Are Two Distinct Types of Patent Unenforceability: Inequitable Conduct (Fraud on the Patent Office) and Patent Misuse Two separate actions may lead to a patent being found unenforceable by a court. Inequitable conduct is fraud on the Patent Office. Patent misuse arises

50. Johns Hopkins Univ. v. Cellpro, Inc., 152 F.3d 1342 (Fed. Cir. 1998). 51. Id. at 1364–65.

Practice Points

when a patent owner impermissibly broadens the scope of the patent grant of an issued patent with anticompetitive effect.

D. Inequitable Conduct Is an Intentional Breach of a Patent Applicant’s Duty of Good Faith and Candor to the U.S. Patent Office Unlike the patent laws and patenting systems of most other countries, U.S. patent applicants and their representatives have a duty of good faith and candor to the U.S. Patent Office. Inequitable conduct is the intentional breach of this duty.

E. Proof of Inequitable Conduct Requires Clear and Convincing Evidence of Materiality and Intent Inequitable conduct must be proven by clear and convincing evidence that a patent applicant (a) made an affirmative misrepresentation of material fact, failed to disclose material information, or submitted false material information; and (b) did so with the intent to deceive the U.S. Patent Office.

F. Materiality Can Encompass Any Information Where There Is a Substantial Likelihood That a Reasonable Examiner Would Consider It Important in Deciding Whether to Allow the Application to Issue as a Patent In the context of inequitable conduct, material information is not limited to prior art under Section 102. Materiality can encompass any information where there is a substantial likelihood that a reasonable examiner would consider it important in deciding whether to allow the application to issue as a patent. Examples of information that U.S. courts have found to be material include information about co-pending U.S. patent applications (including Office Actions), declarations submitted to the Patent Office, evidence relating to the priority or inventorship of an application, and characterization of prophetic examples.

G. Materiality and Intent Are Separate Requirements Generally, materiality and intent must be separately proven by clear and convincing evidence.

409


H. In Certain Situations, Intent May Be Inferred from Materiality While materiality and intent must generally be proven separately, in certain situations intent may be inferred from materiality. In order to infer intent from indirect and circumstantial information, the evidence must be clear and convincing. In addition, intent must be the single most reasonable inference that a person is able to draw from the evidence.

I. Even Where Materiality and Intent Have Been Proven by Clear and Convincing Evidence, a Court Still May Not Find a Patent Unenforceable Proof of both intent and materiality by clear and convincing evidence is only the threshold for a court to find a patent to be unenforceable for inequitable conduct. To hold a patent unenforceable, a court must balance the equities to determine whether the applicant’s conduct before the Patent Office was sufficiently egregious to warrant holding the entire patent unenforceable. Thus, inequitable conduct may be proved, but a court may nonetheless refuse to hold the patent to be unenforceable. This is another important reason that evaluations and opinions of U.S. patents rarely discuss or rely on patent unenforceability.

J. Inequitable Conduct May Only Be “Cured” If Done So in the Application (or a Related Application) Before a Patent Is Issued Inequitable conduct can only be cured if done before a patent issues; inequitable conduct cannot be cured after a patent issues. If a patent has not yet issued, inequitable conduct may be cured by notifying the Examiner of the culpable event, indicating the correct information, and indicating that further examination may be necessary. Once a patent has issued from an application having uncured inequitable conduct, the problem cannot be cured. For example, inequitable conduct cannot be cured in a reissue proceeding.

K. Patent Misuse Arises When a Patent Owner Impermissibly Broadens the Scope of the Patent Grant With Anticompetitive Effect An essential feature of patent misuse is the patent owner’s impermissible broadening of the scope of the monopoly of an issued patent with

Practice Points

anticompetitive effects. However, enforcement of a patent within the scope of the claims is not patent misuse.

L. Tying and Extending a Patent’s Term by Requiring PostExpiration Royalties Is Per Se Misuse Under certain specific circumstances, tying (in which a patentee conditions a license under a patent on the purchase of a separate, staple good) and extending the term of a patent by requiring royalties beyond the patent’s term may be per se patent misuse.

M. Section 271(d) of the Patent Statute Sets Forth Actions That Are Not Patent Misuse Section 271(d) of the Patent Statute (35 U.S.C. § 271(d)) sets forth specific acts that do not constitute patent misuse.

N. A Patent is Only Unenforceable Based On Patent Misuse Until the Misuse Is Cured Unlike patent unenforceability based on inequitable conduct (which cannot be cured after a patent issues), unenforceability based on patent misuse may be cured at any time during the term of an issued patent.

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CHAP T ER

11 Evaluating and Opining on Third Party Patents Patent Due Diligence for Mergers, Acquisitions, and Licensing

I. Overview

416

A. Overview of Patent Due Diligence from the Perspective of the Acquiring Party

417

B. Role of Patent Evaluations and Opinions in Patent Due Diligence

417

II. Identify All Key Patents

418

A. Target Company’s Patents 1. Perform an Independent Patent Search

419 419

B. Third Party Patents

420

1. Perform an Independent Patent Search

421

C. Limiting Liability

421

III. Applying the Four Principles of Patent Evaluations and Opinions A. Claim Construction

422 423

1. Claim Construction Is Essential to Virtually Any Patent Evaluation and Opinion

423

2. Claim Construction Must Be Based on a Patent’s Intrinsic Evidence: The Claims, the Specification, and Its Prosecution History in the U.S. Patent Office (Including All Cited Prior Art)

424

B. Infringement Evaluations and Opinions

425

1. Obtain and Verify a Clear and Comprehensive Description of Technology to Be Practiced by the Acquiring Company

426

2. Infringement Evaluations and Opinions Must Consider Both Literal Infringement and Infringement Under the Doctrine of Equivalents

426

413

414 Chapter 11 Evaluating and Opining on Third Party Patents 3. Claim Construction Is Always Required

426

4. Consider Possible Indirect Infringement

427

C. Validity Evaluations and Opinions

427

1. Validity Determinations of Target Company Patents Are Critical

427

2. Claim Construction Is Always Required

428

3. Consider All Possible Means of Invalidity (Including All Types of Anticipation, Enablement, Written Description, Best Mode, and Other Issues)

428

4. Every Claim Must Be Addressed in Invalidity Evaluations and Opinions

429

5. Prior Art Searching

429

6. Limiting Liability

430

D. Enforceability Evaluations and Opinions

430

1. Red Flags for Enforceability Issues

431

IV. Verifying Ownership and Inventorship

432

A. Co-Inventors, Even of Only One Claim, Have Rights to Fully Exploit the Entire Patent Without Seeking Permission from or Accounting to the Other Co-Inventors

432

B. Representations and Warranties Regarding Inventorship

434

V. Reporting Considerations

435

A. What to Put in Writing

436

1. Formal Opinions of Noninfringement and/or Invalidity of Third Party Patents in the Context of Freedom to Operate Opinions, and Opinions of Validity, Enforceability, Inventorship, and Ownership of Target Company Patents

436

2. Other Opinions and Patent Evaluation Results

437

3. Patents and Applications Brought to the Attention of the Target Company

438

B. Limiting Liability VI. Practice Tips A. Patent Due Diligence for the Acquiring Company Typically Involves Both an Evaluation and Opinion of the Target Company’s Patents for Validity, Enforceability, Inventorship, and Ownership, and a Clearance (Freedom to Operate) Evaluation and Opinion of Third Party Patents

439 440

440

Evaluating and Opining on Third Party Patents B. A Competent Evaluation and Opinion Is Critical Regarding the Validity, Enforceability, Infringement (Claim Scope), Inventorship, and Ownership of the Target Company’s Patents

440

1. Must Construe Claims

441

2. Must Examine All Relevant Prosecution Histories

441

3. Must Consider All Claims for Invalidity Evaluations and Opinions

441

4. Prior Art Searching for Validity Analysis

441

5. Must Consider Non-Art Invalidity

442

6. Infringement Evaluations and Opinions Require a Clear Understanding of the Potentially Infringing Subject Matter

442

7. Prior Art Searching for Validity Analysis

442

C. Evaluating Inventorship, Ownership, and Transferability of Ownership of Target Company Patents Is Critical

443

D. Reporting Issues and Limiting Liability

443

415

416 Chapter 11 Evaluating and Opining on Third Party Patents

Usage Note: Patent evaluations and opinions form the necessary backbone and core of patent due diligence investigations for acquiring companies in mergers, acquisitions, and licensing of third party patents. In fact, the result of patent due diligence is a collection of evaluations and opinions of patents as provided for in the various chapters of this treatise. Indeed, the key components of patent due diligence from the perspective of an acquiring company are: (a) patent evaluations on and opinions of a target company’s patents, including those on the scope of the claims, the validity and enforceability of the patents, and the inventorship, ownership, and transferability of ownership of the patents; and (b) evaluations and opinions of third party patents that may affect the ability of the acquiring company to practice the technology of the target company’s patents without infringement. In each situation, it is necessary to preform patent evaluations and opinions that take into account the various issues discussed throughout this treatise, including (but not limited to) claim construction (Chapter 2), infringement (both literal (Chapter 3) and under the doctrine of equivalents (Chapter 4)), indirect infringement (Chapter 5), validity (including anticipation by printed publications (Chapter 6), other forms of anticipation (Chapter 7), obviousness (Chapter 8), and other forms of invalidity (Chapter 9)), enforceability (Chapter 10), clearance (freedom to operate) opinions (Chapter 12), opinions to avoid willful infringement (Chapter 13), post-grant challenges of third party patents (Chapter 15), Sarbanes-Oxley and related corporate due diligence obligations (Chapter 16), patentability determinations (Chapter 17), evaluation of patent portfolio strength and scope for commercial development strategies (Chapter 18), post-grant corrections of patents (Chapter 21), competency of opinions (Chapter 23), and waiver of attorney-client privilege and work product immunity issues (Chapter 24). Therefore, the reader is referred to these chapters for further information on these specific issues.

I. Overview This chapter discusses the role that patent evaluations and opinions play in patent due diligence. However, this chapter is not intended to provide exhaustive coverage of the process of patent due diligence, which is a complex process involving a number of issues. For detailed information on patent due diligence, it is suggested that the reader consult a treatise devoted exclusively to the topic. Additionally, as discussed below, patent invalidity, validity, infringement, and noninfringement opinions form a major component of the work product of patent due diligence investigations. Accordingly, it is important to read this chapter in combination with the other chapters of this treatise pertaining to opinions of patent invalidity, validity, infringement, and noninfringement. Without limitation, it is especially important that the reader consult Chapter 23 (competency of patent opinions) and Chapter 24 (waiver of attorney-client

Overview 417

privilege and work product immunity). Because of the importance of waiver to patent due diligence investigations, including unique issues related to waiver such as the common interest doctrine, Chapter 24 has a section dedicated solely to waiver of attorney-client privilege and work product immunity in the context of patent due diligence. This includes a discussion of the common interest doctrine in patent due diligence.

A. Overview of Patent Due Diligence from the Perspective of the Acquiring Party When an acquiring company is considering obtaining the patent rights held by another company (a target company) whether by merger, acquisition, or licensing, the process by which the acquiring company vets the patent rights of the target company (as well as the third party patent landscape relevant to the technology of the target company’s patents) is known as patent due diligence. While every situation is unique, a general purpose and procedure are typical for most patent due diligence investigations for an acquiring company. The overall purpose of patent due diligence from the perspective of the acquiring company is to provide the acquiring company with two general categories of information: (a) about the target company’s patents; and (b) about third party patents that may affect the ability of the acquiring party to practice the technology of the target company’s patents. The first category may be subdivided into information on the target company’s patents regarding their: (a) scope of claim coverage; (b) validity and enforceability; and (c) inventorship, ownership, and transferability of ownership. The second category generally involves searching for potentially relevant third party patents and conducting clearance (sometimes also referred to as “freedom to operate”) evaluations and opinions.

B. Role of Patent Evaluations and Opinions in Patent Due Diligence Patent evaluations and opinions, including the issues discussed throughout this treatise, form the necessary backbone and core of patent due diligence. In fact, the result of patent due diligence is a formalized collection of evaluations and opinions regarding patents. Indeed, each of the key components of patent due diligence from the perspective of an acquiring company is based on evaluations and opinions of patents. These include: (a) those on a target company’s patents, including on the scope of the claims, the validity and enforceability of the patents, and the inventorship, ownership and transferability of ownership of the patents; and (b) those regarding third party patents that may affect the ability of the acquiring company to practice the technology of the target company’s patents without infringement.


In each situation, it is necessary to perform patent evaluations and opinions that take into account the various issues discussed throughout this treatise, including (but not limited to) claim construction (Chapter 2), infringement (both literal (Chapter 3) and under the doctrine of equivalents (Chapter 4)), indirect infringement (Chapter 5), validity (including anticipation by printed publications (Chapter 6), other forms of anticipation (Chapter 7), obviousness (Chapter 8), and other forms of invalidity (Chapter 9)), enforceability (Chapter 10), clearance (freedom to operate) opinions (Chapter 12), opinions to avoid willful infringement (Chapter 13), post-grant challenges of third party patents (Chapter 15), Sarbanes-Oxley and related corporate due diligence obligations (Chapter 16), patentability determinations (Chapter 17), evaluation of patent portfolio strength and scope for commercial development strategies (Chapter 18), post-grant corrections of patents (Chapter 21), competency of opinions (Chapter 23), and waiver of attorney-client privilege and work product immunity issues (Chapter 24).

II. Identify All Key Patents Of course, it is of the utmost importance in any patent due diligence investigation that the key patents be properly identified. This includes the location and identification of both patents and applications owned by the target company that cover the subject technology as well as those owned by third parties that may affect the ability of the acquiring company to practice the technology of the target company’s patents. When an acquiring company conducts a due diligence investigation, the target company generally is willing to provide a complete list of its patents and patent applications. However (as discussed below), this is not always the case and cannot be relied upon. Therefore, proper patent due diligence should include an independent search for patents and patent applications owned by the target company.1 Identification of key third party patents for clearance opinions is critically important. For example, if not done properly, and/or if potential liability is not properly limited, errors and omissions in locating and identifying any blocking third party patents may be a source of potential liability for attorneys and law firms performing due diligence for an acquiring company. Further,

1. Alternatively, the merger, acquisition, or licensing agreement between the acquiring and target company can address this issue by having the target company represent and warrant to the acquiring company that all patent rights owned by the target company (including any owned by unrecorded assignments or by entities of the target company) to the subject technology are covered by the agreement, including any patents that may issue in the future (e.g., from continuation or divisional applications from target company patents).

Identify All Key Patents 419

even a proper search that misses a key blocking patent can reflect poorly on the attorneys and firm conducting the due diligence investigation.

A. Target Company’s Patents One of the first requests for an acquiring company to make of a target company in a patent due diligence investigation is for a complete list of all U.S. and non-U.S. patents and patent applications owned or licensed by the target company. This request should include all patents owned by the target company whether or not within the scope of the potential patent acquisition. It should also include patents, filed patent applications, draft unfiled patent applications, and invention disclosures. Further, it is important that the request include both U.S. and non-U.S. patents, patent applications, drafts, and the like (“patent materials”) including (but not limited to) international applications such as Patent Cooperation Treaty (“PCT”) applications. Further, the request should include patent materials actually assigned to the target company as well as those owned by the target company, but not yet formally assigned to it (e.g., inventions made by inventors under an obligation of assignment to the target company). Still further, the request should include patents materials co-owned with any third parties. In essence, the request should include all patent rights, whether granted, filed, or unfiled of the target company that either cover or are capable of covering the subject technology, and that are owned in full or in part by the target company, regardless of the formal status of the ownership as recorded in any patent office or other ownership registries. This also includes any patent materials in which the target company has asserted or may assert a contested ownership right. For patent materials that are not formally assigned to the target company and recorded in the records of the issuing patent office, the target company should provide a written explanation of why the patent rights belong to the target company and why the assignment interest has not been formalized and recorded in a patent office or other ownership registry. The company should also describe any plans to file a formal assignment. 1. Perform an Independent Patent Search The acquiring company should neither simply accept the proffered list of patent materials from the target company nor the target company’s assertions as to which patents cover the desired technology. Rather, the acquiring company should conduct an independent search for all patents and patent applications that may be owned by the target company—and every patent should be reviewed for its scope of coverage. This is important because under certain circumstances, a target company may attempt to avoid disclosing patents and/or applications or making invention disclosures that arguably cover the


desired technology in an attempt to exclude them from the transaction. Later, the target company could attempt to assert the non-covered patents against the acquiring company to extract further concessions from the target company. Of course, this situation can be prevented via careful drafting of the agreement between the acquiring company and the target company in the form of representations and warranties that the target company is transferring all of its patent rights in the subject technology to the target company. However, it is still generally good practice to perform early in the due diligence investigation a search for target company patents to determine whether the target company has fully disclosed to the acquiring company all of its patent rights in the subject technology. Searching for and locating non-disclosed and relevant patent rights owned by the target company can provide an important early warning to the acquiring company that the target company may be engaging in evasive and misleading behavior. As discussed in more detail below, identification of target company patents that may cover the desired technology goes beyond simply examining the claims in issued patents. For example, patents and patent applications having claims that do not cover the desired technology, but that include the technology in the written description of the patent, should be examined carefully for the possibility of the target company obtaining claims covering the desired technology in, for example, subsequent continuation or divisional applications. Such patents, especially all related continuation, divisional, continuation-in-part, and the like patent rights, should be included in the transferred patent rights. Moreover, the acquiring company’s attorneys should consider retaining an independent, competent, and reliable outside searching agency to perform an independent search for all patents owned by the target company. As discussed above, this search should include patents having claims covering the desired technology as well as those having specifications capable of supporting claims to the desired technology. The importance in U.S. patent due diligence of identifying and obtaining non-U.S. patents and applications owned by the target company is that it allows the acquiring party an additional means to investigate U.S. patents that may be owned by the target company, but that were not disclosed by the target company to the acquiring company. Many international patents and applications have a U.S. counterpart. This is especially true if the target company is a U.S. company.

B. Third Party Patents The target company should be asked to provide a complete listing of all U.S. and non-U.S. patents and published patent applications known to it that cover (even arguably) any aspect of the subject technology. Additionally, all licensed patents, applications and the like (regardless of the exclusivity of the license, field of use, or territory restrictions) should be disclosed to the acquiring company.

Identify All Key Patents 421

Representations and warranties should be used in the transaction agreement to ensure that the target company complies with this request or bears the responsibility for failure to disclose all potentially relevant third party patents and patent applications. 1. Perform an Independent Patent Search An independent, competent and reliable outside searching agency should always be retained to perform an independent search for all third party U.S. patents and applications that might be relevant to the subject technology. It is especially important that the searching agency be provided with as complete and accurate a description of the subject technology as possible. The key patents of the target company that cover the technology and all patents licensed by the target company should be provided to the searching agency personnel as this will help them to focus their search on the appropriate technology, patent classifications, etc. Further, all known third party patents of interest should also be provided to the searching agency as these too may help the agency define its search. This should include non-U.S. patents as well as they too may help the searching agency define the search parameters, including providing names of assignees and inventors to be searched. Additional sources of sources of patents, inventors, assignees, and patent classes to search often come from patents cited against the target company’s patents during their prosecution both in U.S. and in non-U.S. patent offices. Thus, prior to searching, the prosecution histories of the target company’s patents both in U.S. and in non-U.S. patent offices should be carefully reviewed for third party patents that may cover or relate to the technology of the target company’s patents. Importantly, if the budget allows, it is good practice to engage more than one independent searching agency. No search is perfect, and increasing the number of independent searching agencies may decrease the risk of missing critical blocking third party patents. Furthermore, the due diligence attorneys should conduct their own thorough and complete search for third party U.S. patents and patent applications as outside searching agencies should never be relied upon exclusively to conduct these patent searches. The attorneys conducting the due diligence will always have the most detailed knowledge of the subject technology as well as the relevant patents covering the technology.

C. Limiting Liability The importance cannot be overstated of attempting to identify all potentially blocking third party patents in patent due diligence for an acquiring party. Extreme and exhaustive attention must be paid to this aspect of due diligence. Additionally, it is critical that all target company patents and patent applications

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be identified that claim the subject technology or can claim the technology (e.g., through continuations or divisional applications). However, it is never possible to guarantee an acquiring company that every potential third party patent that may affect the ability to practice the technology of the acquired patents has been located. Similarly, it is never possible to determine conclusively that every patent and patent application covering the subject technology and owned by the target company has been identified. Therefore, patent due diligence reports for acquiring companies should never conclusively state or guarantee that all third party potentially blocking patents have been identified and addressed or that all patents potentially owned by the target company and covering the subject matter of interest have been identified and addressed. Fortunately, knowledgeable counsel and business persons at acquiring companies should never expect such certainty from their due diligence counsel. Indeed, any report having such certainty would likely be viewed by an acquiring company as being suspect, and acceptance and reliance on such a report by an acquiring company may raise issues with the company’s exercise of its duty of due care in the transaction. Liability for potentially missing relevant patents and applications for the due diligence attorneys and firms may be reduced by properly reporting the results of the search. Reporting on the results of due diligence investigations (including those from searches of patents and applications) is discussed in the relevant sections of this chapter below. Generally, however, proper reporting to reduce liability for potential searching errors and omissions involves providing detailed descriptions to the acquiring company of: (a) the information received from the client acquiring company that was relied upon by the searching attorneys, firm, and outside searching agencies; (b) the searching strategies performed and the results obtained; and (c) the existence of any client-imposed searching limitations that may have reduced the scope and thoroughness of the search as compared with a “reasonable search” under the circumstances (e.g., cost and time limitations; limitations on use of independent searching agencies; and forced reliance by the due diligence attorneys and the law firm on search results of others, search strategies of others, or representations by others of relevant patents). Finally, any due diligence report should clearly state that it is not possible for the issuing attorneys and firm to conclusively represent that all relevant patents have been located and that no such representation is being made.

III. Applying the Four Principles of Patent Evaluations and Opinions As discussed throughout this treatise, there are four principles of patent evaluations and opinions that pertain (at least in part) to virtually all situations in

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which it is necessary to evaluate and/or opine on U.S. patents. These four principles are claim construction, infringement and scope of claims, validity, and enforceability. As discussed in Section IV below, there is an additional legal principle, patent inventorship and ownership, that also applies to evaluations and opinions regarding U.S. patents during due diligence aimed at potentially acquiring or licensing third party patents. These four principles are discussed in depth as follows: Claim construction is discussed in Chapter 2; infringement is discussed in Chapters 3–5, validity is discussed in Chapters 6–9, and enforceability is discussed in Chapter 10. The reader is directed to these chapters for a more detailed presentation of this subject matter. The following addresses the application of these principles to patent due diligence for an acquiring company.

A. Claim Construction As discussed in Chapter 2, claim construction is the determination of the proper and legal meaning of a patent’s claims. Claim construction is based upon a determination of the ordinary meaning of claim language to one of ordinary skill in the relevant art at the time of the patent application, taking into consideration any specific meanings given to the claim terms in the specification of the patent or during its prosecution history in the U.S. Patent Office (i.e., the intrinsic evidence).2 1. Claim Construction Is Essential to Virtually Any Patent Evaluation and Opinion As the claims of a patent define the subject matter of the patent grant, claim construction is essential to virtually all evaluations and opinions of U.S. patents, including the evaluations and opinions regarding third parties done in patent due diligence.3 Indeed, without construing a patent’s claims, it is simply not possible to evaluate and opine on the scope of a U.S. patent in patent due diligence. In fact, U.S. courts consistently hold that it is not possible to prepare a competent legal opinion of patent claim scope or invalidity without construing a patent’s claims.4 Rare exceptions to this rule might include situations in which the meaning of a patent’s claims has been agreed to by the parties of a

2. E.g., Phillips v. AWH Corp., 415 F.3d 1303 (Fed. Cir. 2005) (en banc); Markman v. Westview Instruments, Inc., 52 F.3d 967 (Fed. Cir. 1995) (en banc), aff ’d, 517 U.S. 370 (1996); Vitronics Corp. v. Conceptronic, Inc., 90 F.3d 1576 (Fed. Cir. 1996); Innova/Pure Water, Inc. v. Safari Water Filtration Sys., 381 F.3d 1111 (Fed. Cir. 2004). 3. E.g., Phillips, 415 F.3d at 1303; Markman, 52 F.3d at 967; Vitronics, 90 F.3d at 1576; Innova/Pure Water, 381 F.3d at 1111; and Chapter 2 generally. 4. E.g., Critikon, Inc. v. Becton Dickinson Vascular Access, Inc., 120 F.3d 1253, 1259–60 (Fed. Cir. 1997) (finding that opinions were not sufficiently competent to overcome a charge of

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transaction (perhaps based upon a court’s prior construction of the claims) or situations in which only a patent’s term is at issue. 2. Claim Construction Must Be Based on a Patent’s Intrinsic Evidence: The Claims, the Specification, and Its Prosecution History in the U.S. Patent Office (Including All Cited Prior Art) Claim construction is the determination of the meaning of a patent’s claims based on the intrinsic evidence relevant to the patent, which comprises the patent’s claims, specification, and prosecution history in the U.S. Patent Office (including all cited prior art).5 Therefore, it is necessary for anyone evaluating or opining on a U.S. patent to obtain and review its complete prosecution history.6 Importantly, the prosecution history of a U.S. patent includes the prosecution history in the U.S. Patent Office of the application that issued as the subject patent. Additionally, it includes the prosecution histories of other U.S. patents and/or patent applications that are “formally” related to the subject patent, and wherein a common claim term is at issue. Applications that are “formally” related to a patent include: (a) parent and ancestor applications, from which the patent at issue is related as (or via) continuation, divisional, or continuation-in-part applications; (b) sibling applications that are related to the patent at issue as pending from a common ancestor or parent application as (or via) continuation, divisional, or continuation-in-part applications; and (c) child and grandchild applications that are related to the patent at issue as (or via) continuation, divisional, or continuation-in-part applications. Therefore, the prosecution history of a patent may include “formally related” applications having at least one claim term in common with the patent at issue in which the related applications were prosecuted in the U.S. Patent Office before, during, or even after prosecution of the application that issued as the patent at issue.7

willful infringement where the opinions contained “no analysis of specific claims, [and] no interpretation of claim language. . . .”). 5. E.g., Phillips, 415 F.3d at 1313; Vitronics, 90 F.3d at 1582; Nystrom v. Trex Co., Inc., 424 F.3d 1136, 1142 (Fed. Cir. 2005); and Chapter 2 generally (extrinsic evidence may also be considered under certain circumstances). 6. E.g., Markman, 52 F.3d at 980. 7. E.g., Goldenberg v. Cytogen, Inc., 373 F.3d 1158, 1167–68 (Fed. Cir. 2004) (formal relationship required); Microsoft Corp. v. Multi-Tech Sys., Inc., 357 F.3d 1340, 1349 (Fed. Cir. 2004) (statement made during prosecution of related patent operated as a disclaimer with respect to a later-issued patent); Advanced Cardiovascular Sys. v. Medtronic, Inc., 265 F.3d 1294, 1305 (Fed. Cir. 2001) (the prosecution history of a related patent must address “a limitation in common with the patent in suit”); NTP, Inc. v. Research In Motion, Ltd., 418 F.3d 1282, 1293 (Fed. Cir. 2005); Verizon Servs. Corp. v. Vonage Holdings Corp., 503 F.3d 1295, 1306 (Fed. Cir.


It is very important to note this requirement of obtaining and reviewing the complete prosecution histories for all U.S. patents evaluated or opined upon in patent due diligence. Failure to do so may result in evaluations or opinions that may be considered per se insufficient for failure of the issuer to properly construe the patent’s claims based on the whole of the intrinsic evidence. Patent due diligence is often conducted under extreme time pressures, and there is little doubt that obtaining and reviewing the entire prosecution histories of all patents evaluated or opined on may constitute an onerous burden. However, under clear Federal Circuit case law, claim construction must be based on a consideration of the whole of a patent’s intrinsic evidence, which necessarily includes its complete prosecution history. Furthermore, the complete intrinsic evidence also includes any prior art cited in the patent or in the patent’s prosecution history. This too must be considered in any claim construction.

B. Infringement Evaluations and Opinions An acquiring company conducting patent due diligence needs evaluations and opinions regarding patent infringement for two different types of patents and for two different reasons. First, the acquiring company needs evaluations and opinions of infringement of patents owned by the target company. For these patents, the acquiring company needs evaluations and opinions of infringement in order to determine the scope of the patents—that is, what activities by third parties would infringe the patents if performed without permission. Second, the acquiring company needs evaluations and opinions of infringement of third party patents. This is necessary in order to determine whether—and which—third party patents might affect the ability of the acquiring company to practice the technology of the target company’s patents. Thus, both the target company’s patents and third party patents require evaluations and opinions of infringement. For the target company’s patents, the purpose of the infringement evaluation and opinion is to determine what activities by third parties may be blocked by the target company’s patents. For third party patents, the purpose is to determine clearance to practice the technology of the target company’s patents.

2007) (“We have held that a statement made by the patentee during prosecution history of a patent in the same family as the patent-in-suit can operate as a disclaimer.”).

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1. Obtain and Verify a Clear and Comprehensive Description of Technology to Be Practiced by the Acquiring Company A determination of infringement necessarily depends on both a correct and complete construction of the patent’s claims and a complete and accurate understanding of the proposed potentially infringing subject matter. Therefore, it is critical for attorneys performing clearance evaluations and opinions for acquiring companies to obtain—and verify—clear and complete definitions of all subject matter that the acquiring company proposes to practice under the target company’s patents. A misunderstanding on this issue may render a noninfringement evaluation and opinion virtually useless, or worse, inaccurate. 2. Infringement Evaluations and Opinions Must Consider Both Literal Infringement and Infringement Under the Doctrine of Equivalents A claim is infringed if every claim limitation is found in the potentially infringing subject matter either literally or equivalently.8 Therefore, infringement evaluations and opinions of U.S. patents must consider both literal infringement and infringement under the doctrine of equivalents.9 Chapter 3 provides a detailed discussion on evaluating and opining on literal infringement, and Chapter 4 provides one on evaluating and opining on infringement under the doctrine of equivalents. 3. Claim Construction Is Always Required As discussed above, a first and necessary step in virtually all evaluations and opinions of patents is claim construction. Accordingly, claim construction is a necessary first step in evaluating and opining on patent infringement.10 The construed claims are then compared against the potentially infringing subject matter to determine infringement.11

8. E.g., Festo Corp. v. Shoketsu Kinzoku Kogyo Kabushiki Co., 535 U.S. 722, 731–732 (U.S. 2002); Allen Eng’g Corp. v. Bartell Indus., 299 F.3d 1336, 1345 (Fed. Cir. 2002). 9. E.g., Festo Corp., 535 U.S. at 731–732; Allen Eng’g, 299 F.3d at 1345. 10. E.g., Cybor Corp. v. FAS Techs., Inc., 138 F.3d 1448, 1454 (Fed. Cir. 1998) (en banc); WarnerLambert Co. v. Purepac Pharm. Co. (In re Gabapentin Patent Litig.), 503 F.3d 1254, 1259 (Fed. Cir. 2007); Becton Dickinson & Co. v. C.R. Bard, Inc., 922 F.2d 792, 796 (Fed. Cir. 1990). 11. E.g., Cybor Corp., 138 F.3d at 1454; Warner-Lambert, 503 F.3d at 1259; C.R. Bard, Inc., 922 F.2d at 796.


4. Consider Possible Indirect Infringement Direct infringement occurs when an accused technology literally or equivalently contains every limitation of a patent’s claim.12 However, U.S. patent law provides for a number of means by which a U.S. patent may be infringed in addition to direct infringement. These are covered in detail in Chapter 5, and include, for example, inducement of infringement, contributory infringement, and joint infringement. Thus, a conclusion of lack of direct infringement does not conclude a proper infringement evaluation and opinion. In addition to direct infringement, issuers of evaluations and opinions regarding patent infringement must also consider indirect forms of infringement as discussed in Chapter 5.

C. Validity Evaluations and Opinions Similar to infringement determinations in due diligence for acquiring companies, due diligence investigations also require validity evaluations and opinions of two different types of patents and for two different reasons. First, the acquiring company needs evaluations and opinions of the validity of patents owned by the target company. For these patents, the acquiring company needs these to avoid purchasing invalid or potentially invalid patents. Second, the acquiring company may need evaluations and opinions of the validity of third party patents as part of its clearance investigation on practicing the technology of the acquired patents without infringing valid third party patent rights. Thus, both the target company’s patents and third party patents may require evaluations and opinions of patent validity. 1. Validity Determinations of Target Company Patents Are Critical Evaluating and opining on the validity of the target company’s patents is one of the most important—and unforgiving—components of representing an acquiring company in patent due diligence. Indeed, patent validity evaluations and opinions of the target company’s patents are at the very heart of patent due diligence for an acquiring company as it is a direct evaluation and opinion of the validity of the assets to be potentially purchased or licensed in the transaction.

12. E.g., Festo, 535 U.S. at 731–32; Allen Eng’g, 299 F.3d at 1345.


2. Claim Construction Is Always Required As discussed above, a first and necessary step in virtually all evaluations and opinions of patents is claim construction. Accordingly, claim construction is a necessary first step in evaluating and opining on patent validity.13 The construed claims are then evaluated for validity.14 3. Consider All Possible Means of Invalidity (Including All Types of Anticipation, Enablement, Written Description, Best Mode, and Other Issues) A patent’s claims may be invalid under many different—and divergent— grounds. These are discussed in detail in Chapter 6 (anticipation by printed publications), Chapter 7 (other forms of anticipation), Chapter 8 (obviousness), and Chapter 9 (other forms of invalidity). For example, a common form of invalidity is anticipation under 35 U.S.C. § 102(b) based on a printed publication, under which a patent claim is invalid if the publication is prior art to the patent15 and discloses “each and every claim limitation . . . either explicitly or inherently.”16 It is important to note that “a prior art reference may anticipate without disclosing a feature of the claimed invention if that missing characteristic is necessarily present, or inherent, in the single anticipating reference.”17 In addition to anticipation by a printed publication, U.S. patent law provides a number of additional means by which a patent claim may be anticipated. For example, the following nonlimiting examples occurring under certain circumstances may render a patent claim invalid due to anticipation: sale, offer for sale, public use, public knowledge, prior patenting, or abandonment of the invention.18 Still further (as discussed in detail in Chapter 9), U.S. patent law provides other means by which a patent’s claims may be invalid. These include the following nonlimiting examples: lack of an enabling description for the subject matter of the claim,19 lack of sufficient written description to support the claim,20 and lack of description of the best mode of practicing the claimed invention.21

13. 14. 15. 16. 17. 18. 19. 20. 21.

E.g., In re Omeprazole Patent Litig., 483 F.3d 1364, 1371 (Fed. Cir. 2007). Id. See Chapter 6 for details. Omeprazole, 483 F.3d at 1371. Schering Corp. v. Geneva Pharm., Inc., 339 F.3d 1373, 1377 (Fed. Cir. 2003); Leggett & Platt, Inc. v. VUTEk, Inc., 537 F.3d 1349, 1354 (Fed. Cir. 2008). 35 U.S.C.S. § 102 (2009); see Chapter 7 for details. 35 U.S.C.S. § 112, first paragraph (2009). Id. Id.


Therefore, evaluations and opinions of patent validity should consider all possible bases of invalidity. This is particularly important in evaluations and opinions for acquiring companies in patent due diligence where the goal is to rule out all possible means of invalidity and to opine that a patent appears to be valid. 4. Every Claim Must Be Addressed in Invalidity Evaluations and Opinions As discussed in Chapters 6–9, the validity of a patent is determined on a claim-by-claim basis. Therefore, patent evaluations and opinions of invalidity must consider the validity of each claim of a patent separately and in full. This necessarily includes construing the terms of each claim of the patent. This is distinguished from a patent infringement evaluation and opinion, in which it is not always necessary to address infringement of all claims. For example, if it is determined that an independent claim is not infringed, it is not necessary to address infringement of the claims that depend on the noninfringed claim, because claims that depend on a non-infringed claim cannot be infringed by the same subject matter.22 5. Prior Art Searching As mentioned above, anticipation by printed publication is among the most common ways that an issued patent’s claims are found to be invalid. This is likely due, at least in part, to the relative ease of obtaining prior art printed publications and of proving the disclosure of printed publications. For this reason, due diligence investigations for acquiring companies should always include detailed and extensive searches of prior art for printed publications that may invalidate claims of target company patents. The issues involved in searching for potentially invalidating prior art to target company patents are similar to those discussed above for searching for potentially blocking third party patents in due diligence for an acquiring party. For example, at least one—and preferably more than one—independent and responsible searching agency should be engaged to independently search for potentially invalidating prior art. It is extremely important that the search agencies be given as much both general and specific information as possible as to the invention claimed so that the prior art search can be as focused and productive as possible. Furthermore, the attorneys conducting the due diligence investigation generally should conduct their own independent prior art search for potentially invalidating prior art as they are generally the most

22. E.g., Jeneric/Pentron, Inc. v. Dillon Co., Inc., 205 F.3d 1377, 1383 (Fed. Cir. 2000); Wolverine World Wide, Inc. v. Nike, Inc., 38 F.3d 1192, 1199 (Fed. Cir. 1994); Wahpeton Canvas Co., Inc. v. Frontier, Inc., 870 F.2d 1546, 1553 (Fed. Cir. 1989).


knowledgeable about a target company’s patents and, therefore, are generally the most likely to identify potentially invalidating prior art. As with searching for potentially important third party patents, valuable information for use in searching for potentially invalidating prior art that should be given to independent search agencies (and used by due diligence attorneys) includes the patents of the target company that are under scrutiny for potential invalidity, any patents licensed by the target company related to the subject technology, and all known third party patents of interest (e.g., those located in searches for potentially blocking third party patents). Additional sources for searching for invalidating prior art include the prosecution histories of target company’s patents (both in the U.S. and in non-U.S. patent offices), including prior art references cited during prosecution. 6. Limiting Liability The importance of locating invalidating prior art—and in detecting other grounds of invalidity of the target company’s patents—cannot be overstated. Extreme and exhaustive attention must be paid to this aspect of due diligence. However, it is never possible to guarantee an acquiring company that there is no printed prior art in existence that would invalidate one or more claims of a target company patent or that no other means of invalidity could ever effect the patents. Therefore, patent due diligence reports for acquiring companies should never conclusively state or guarantee that the claims of the target company’s patents are valid. Rather (and as discussed in more detail below in the section on reporting), validity results should be reported in the context of the limitations that prevent the drawing of an absolute conclusion that the target company’s patents are valid. For example, proper reporting to reduce liability for potential errors and omissions in searching for invalidating prior art involves providing detailed descriptions to the acquiring company of: (a) the searching strategies performed and the results obtained; and (b) any client-imposed search limitations that may have reduced the scope and thoroughness of the search as compared with a “reasonable search” under the circumstances (for example, but not limited to, cost and time limitations, limitations on use of independent searching agencies, and forced reliance by the due diligence attorneys on search results or search strategies of others). Finally, any invalidity report relating to searches for potentially invalidating prior art should clearly state that it is not possible for the issuing attorneys and firm to conclusively represent that no relevant prior art will be found that may invalidate the target company’s patents.

D. Enforceability Evaluations and Opinions Another key patent law principle relevant to due diligence investigations conducted for acquiring companies is a determination of the enforceability of a


target company’s patents. As discussed in detail in Chapter 10, a U.S. patent may be held to be unenforceable where the patentee engaged in inequitable conduct in procuring the patent in the U.S. Patent Office or engaged in improper anticompetitive conduct related to the patent grant.23 Determining unenforceability based on inequitable conduct before the U.S. Patent Office generally requires a careful review of the patent’s prosecution history (including relevant prior art) and the patentee’s conduct before the Patent Office. As discussed in detail in Chapter 10, unenforceability based on inequitable conduct before the U.S. Patent Office most frequently arises in situations in which a patentee intentionally withheld material prior art from the Examiner in violation of the patentee’s duty of disclosure to the U.S. Patent Office.24 1. Red Flags for Enforceability Issues Although it can be difficult to detect inequitable conduct and to prove that it meets the Federal Circuit’s requirement for unenforceability,25 a finding of inequitable conduct has substantial impact on the patent. Inequitable conduct will render every claim of an otherwise valid patent totally unenforceable.26 This is unlike invalidity, which as discussed above is determined on a claimby-claim basis. Red flags indicating possible inequitable conduct that should be investigated in detail in patent due diligence include whether prior art from related cases having similar claims (including art cited in related non-U.S. applications) was cited in the subject patent application, and whether related, co-pending U.S. patent applications (including Office Actions in related applications concerning similar claimed subject matter) were brought to the attention of the Examiner. Other sources of information that may be material—and, therefore, should be checked for citation to the Patent Office in the patent application of interest—include litigation related to the claimed subject matter (both in the United States and abroad) and data related to the invention

23. See Chapter 10 for details on inequitable conduct and patent unenforceability; e.g., B. Braun Medical, Inc. v. Abbott Laboratories, 124 F.3d 1419, 1427 (Fed. Cir. 1997) (citations and quotations omitted) (“[T]he patent misuse doctrine is an extension of the equitable doctrine of unclean hands, whereby a court of equity will not lend its support to enforcement of a patent that has been misused. Patent misuse arose, as an equitable defense available to the accused infringer, from the desire to restrain practices that did not in themselves violate any law, but that drew anticompetitive strength from the patent right, and thus were deemed to be contrary to public policy. When used successfully, this defense results in rendering the patent unenforceable until the misuse is purged.”). 24. See Chapter 10; e.g., Dayco Prods. v. Total Containment, Inc., 329 F.3d 1358, 1363 (Fed. Cir. 2003). 25. See Chapter 10 (one must show materiality and intent to deceive); e.g., Dayco, 329 F.3d at 1363. 26. E.g., PerSeptive Biosystems, Inc. v. Pharmacia Biotech, Inc., 225 F.3d 1315, 1322 (Fed. Cir. 2000).

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submitted to the FDA or published, especially negative data. Other evidence that may lead to unenforceability for inequitable conduct includes intentional omission of co-inventors, failure to disclose issued patents to standardssetting organizations, declarations submitted that provide false or misleading data or fail to properly disclose the relationship between the declarant and the applicant, and intentional incorrect use of the past tense in describing prophetic examples.

IV. Verifying Ownership and Inventorship In addition to the four principles discussed above that are applicable to virtually all evaluations and opinions of U.S. patents, when evaluating and opining on patents to be acquired, it is of critical importance to evaluate the inventorship, ownership, and assignability of ownership of the target company’s patents. As discussed below, under U.S. law, absent an agreement to the contrary each co-inventor of a U.S. patent has full rights to license, assign, and otherwise exploit the entire patent without any duty to seek permission from or account to the other co-inventors. Therefore, the existence of even one co-inventor on a target company patent who is not under an obligation to assign his or her rights to the target company can effectively destroy the commercial value of that patent.

A. Co-Inventors, Even of Only One Claim, Have Rights to Fully Exploit the Entire Patent Without Seeking Permission from or Accounting to the Other Co-Inventors Under U.S. law, U.S. patents are owned by the inventors unless they assign their patent rights to another entity. Therefore, an important and necessary step in any patent due diligence for an acquiring company is to verify that all of the inventors of target company patents have assigned their full patent rights to the target company. In order to have constructive notice of ownership effective against third parties, patent assignments should be recorded with the U.S. Patent Office.27 Of extreme importance when evaluating and opining on a target company’s patents is the fact that under U.S. law: In the absence of any agreement to the contrary, each of the joint owners of a patent may make, use, offer to sell, or sell the patented invention within the

27. 35 U.S.C.S. § 261 (2009).

Verifying Ownership and Inventorship United States, or import the patented invention into the United States, without the consent of and without accounting to the other owners.28

This means that if a target company’s patent has more than one inventor, every co-inventor must assign his or her full patent rights to the target company. Failure of even one co-inventor to assign those rights to the target company can effectively eliminate the commercial value of the patent to either the target or acquiring company. If even one co-inventor fails to assign rights to the target company, and is not under an obligation to assign such rights, that co-inventor is free to fully commercially exploit the patent without the consent of—and without accounting to—the target company. Practically, in such a case this means the target company has no ability to assign all of the patent rights or to exclusively license them. Indeed, in such a case, the patent has virtually no commercial value because at any time the non-assigning co-inventor may assign or license their rights to any third party to practice the entire patent without infringement and with accounting to the target company. This includes the ability to assign or license the patent to competitors, as well as the ability to dedicate the patent to the public, in which case anyone could practice the patent without infringement and without accounting to the target company. Therefore, it is of paramount importance that one of the first things to be investigated when conducting patent due diligence for an acquiring company is the inventorship and ownership status of the target company’s patents. If a co-inventor contributed to the invention of at least one claim,29 that co-inventor has full legal power to exploit the entire patent. Therefore, inventorship of every claim must be investigated to the utmost. Additionally, even when all named inventors have assigned a patent to the target company, U.S. law provides: Whenever through error a person is named in an issued patent as the inventor, or through error an inventor is not named in an issued patent and such error arose without any deceptive intention on his part, the Director may, on application of all the parties and assignees, with proof of the facts and such other requirements as may be imposed, issue a certificate correcting such error. The error of omitting inventors or naming persons who are not inventors shall not invalidate the patent in which such error occurred if it can be corrected as provided in this section. The court before which such matter is called in question

28. 35 U.S.C.S. § 262 (2009) (emphasis added). 29. E.g., Gemstar-TV Guide Int’l v. ITC, 383 F.3d 1352, 1381–82 (Fed. Cir. 2004); 35 U.S.C.S. § 116, P 1 (2009) (“When an invention is made by two or more persons jointly, they shall apply for patent jointly and each make the required oath, except as otherwise provided in this title. Inventors may apply for a patent jointly even though (1) they did not physically work together or at the same time, (2) each did not make the same type or amount of contribution, or (3) each did not make a contribution to the subject matter of every claim of the patent.”).

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434 Chapter 11 Evaluating and Opining on Third Party Patents may order correction of the patent on notice and hearing of all parties concerned and the Director shall issue a certificate accordingly.30

Further still, even when not all of the parties agree to add a co-inventor, U.S. courts have the power to add co-inventors to U.S. patents when inventorship is proven in court.31 Therefore, an inventorship and ownership analysis of U.S. patent must investigate the possibility of potential inventorship by persons not named on the patent as inventors. Accordingly, the invention disclosures, invention records (including laboratory notebooks and the like) and prosecution histories should always be very carefully reviewed for any evidence of unnamed co-inventors. Even the slightest hint of an inventorship issue should be investigated to the fullest. This includes (but is not limited to) speaking with the named inventors and any potentially unnamed co-inventors. Similarly, the patent’s evidence should be carefully reviewed and evaluated for any indication of joint work with a company other than the target company. Such situations may reveal the presence of unnamed co-inventors on target company patents who have assignment obligations to entities other than the target company. In the event that any inventor or potential inventor is identified who has not assigned his or her patent rights to the target company and either does not have an obligation to do so or has an obligation to assign them to another entity, this finding should immediately be brought to the attention of the acquiring company. While such issues may possibly be addressed by assignments and other means, any inventorship problems raise the possibility of serious, deal-breaking issues. Accordingly, these issues should be handled with the utmost care and expediency. Finally, when confirming inventorship and ownership of the target company’s patents, the ability to assign (or license as the case may be) the target company’s patent rights to the acquiring company must also be investigated and confirmed.

B. Representations and Warranties Regarding Inventorship Because of the potential significance of inventorship and ownership issues when a company is obtaining another company’s patent rights, agreements covering such should always include these representations and warranties by the target company: (a) that the inventorship listed on the patent is the true inventorship of the patent; (b) that all patent rights have been assigned to

30. 35 U.S.C.S. § 256 (2009) (emphasis added). 31. E.g., Fina Tech. v. Ewen, 265 F.3d 1325, 1328 (Fed. Cir. 2001).

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the target company and the target company has full rights to assign all patent rights to the acquiring company; and (c) that the target company warrants and represents that it will bear all responsibilities for any loss of patent rights by the acquiring company due to inventorship or ownership issues affecting the subject patents. As discussed in more detail in the discussion on reporting below, the attorneys and firm for the acquiring company can seek to limit their potential liability related to problems with target company patent inventorship and ownership by providing detailed descriptions to the acquiring company of: (a) the efforts taken by the attorneys to review the evidence for any indications of inventorship and/or ownership issues affecting the target company’s patents; (b) any limitations, including (but not limited to) client-imposed limitations that may have affected the ability of the attorneys to fully investigate inventorship and ownership issues (such as lack of access to review invention records and invention disclosures or to speak with inventors and potentially unnamed co-inventors). Finally, any invalidity report relating to inventorship and/or ownership should clearly state that it is not possible for the issuing attorneys and firm to conclusively represent that there are no potential issues affecting the inventorship and/or ownership of the subject patents, and for this reason the attorneys recommend that any agreements between the acquiring company and the target company contain representations and warranties by the target company addressing any potential issues with inventorship and ownership of the target company’s patents.

V. Reporting Considerations How patent due diligence attorneys and law firms report the results of patent due diligence to the acquiring company is one of the more fluid—and at times vexing—aspects of patent due diligence. Fortunately, reporting the results of formal patent opinions in patent due diligence is one of the least complex aspects of due diligence reporting. This is because the reporting of these opinions generally follows practices for reporting of patent opinions in any context. Some of the more difficult reporting issues in patent due diligence include the following. How does one report potential invalidity or unenforceability issues of target company patents? If the acquisition proceeds, evidence of potential invalidity or unenforceability may cause problems if the patents are enforced. In addition, how does one report potentially blocking third party patents for which noninfringement and/or invalidity opinions are not provided? For example, care must be exercised to avoid potentially providing evidence for enhanced damages for willful infringement.


A. What to Put in Writing Determining what aspects of a patent due diligence report should be delivered to the client in writing is an important aspect of conducting patent due diligence. Many factors typically go into making this determination, including the nature of the advice and the needs and company culture of the acquiring company. 1. Formal Opinions of Noninfringement and/or Invalidity of Third Party Patents in the Context of Freedom to Operate Opinions, and Opinions of Validity, Enforceability, Inventorship, and Ownership of Target Company Patents Formal opinions of patent noninfringement and/or invalidity of third party patents in the context of freedom to operate evaluations, and opinions of validity and enforceability of target company patents in patent due diligence investigations are generally delivered to the acquiring company in written form. Opinions of the inventorship, ownership, and transferability of ownership of target company patents are also typically provided to the acquiring company in writing. With any written opinion, attention should be paid to maintaining the attorney-client privilege and work product immunity of the opinion by keeping it confidential, including restricting its access and distribution. (Please refer to Chapter 24 for important additional information on avoiding waiver of privileges and immunities of patent opinions.) Formal written opinions should also adhere to the Federal Circuit’s guidelines for competent patent opinions (as discussed in detail in Chapter 23). Further, in the context of patent due diligence, it is generally advisable that written opinions on the validity, enforceability, or inventorship and ownership of target company patents include recommendations for representations and warranties to be included in any transaction documentation. The target company should represent to the acquiring company that the patents are valid and enforceable, that the inventorship is accurate, and that the company owns and can transfer all rights of ownership in the subject patents. The target company should also provide suitable warranties in the event that its representations prove to be incorrect. Similarly, it is generally advisable that written opinions of clearance (freedom to operate) include recommendations for representations and warranties to be included in any transaction documentation. The target company should represent to the acquiring company that to the best of its understanding and knowledge, no third party patents affect the ability to practice the technology of the target company’s patents. As discussed below, the target company should also represent that no third party has asserted or brought any patent to


its attention that might be infringed by practicing the technology of the target company’s patents. The target company should also provide suitable warranties in the event that its representations regarding freedom to operate prove to be incorrect. 2. Other Opinions and Patent Evaluation Results Opinions and evaluation reports that might reflect negatively on the acquiring company’s patents are best not put in writing. This includes opinions of invalidity or possible invalidity, and unenforceability or possible unenforceability of target company patents. If the merger, acquisition, or licensing goes through, such opinions and related information may cause issues in subsequent enforcement of the target company’s patents. Therefore, to the extent possible, it is generally best to deliver such information verbally to the acquiring company. However, acquiring companies sometimes demand written reports of all aspects of patent due diligence investigations. This may happen in extremely big due diligence projects performed for large corporate entities. In such a case, potentially negative results can be delivered to the acquiring company in various ways to minimize any potentially negative effect. Reports of potential issues with validity or enforceability of target company patents may be written in terms of “pros and cons,” and may mention the availability of remedial issues, if any. For example, a report of potentially invalidating prior art can be written discussing both the potential of a court’s holding that the target company’s patent is invalid over the art as well as the possibility that a court may not make such a holding. Of course, this can only be done where there are genuine issues of fact and/or law. Fortunately in the case of patent due diligence (as with virtually all U.S. patent law), few issues are ever entirely clear. For example, an issue may exist in the interpretation of a prior art reference, or there may be one as to whether the prior art reference discloses certain subject matter literally or inherently or whether the prior art is enabling. In addition, issues may arise concerning the proper construction of a patent’s claims. In this manner, a written opinion may remain objectively neutral while also raising to the acquiring company important issues involving potential patent invalidity, unenforceability, or inventorship and ownership. In such cases, it may also be helpful for the report to suggest remedial measures to address any potential invalidity, enforceability, or inventorship and ownership issues. For example, for potential prior art validity issues, reissue or reexamination may be suggested as a means to address the issue and achieve more clearly valid claims in the reissued or reexamined patent (see Chapter 21 for a discussion of reissue and reexamination proceedings in the U.S. Patent Office). For issues affecting enforceability, in certain circumstances it may be possible


to “cure” the unenforceability problem of the patent or patent application.32 Similarly, in certain circumstances issues affecting inventorship may be corrected for example in the U.S. Patent Office.33 Another perennially tricky issue in freedom to operate (clearance) opinions and investigations involves how to report the results of third party patent searches that identify patents as being potentially relevant, but that are determined not to be sufficiently relevant to warrant a formal written opinion of noninfringement and/or invalidity. Views on this issue vary among those who practice in the art, ranging from not reporting any such patents, to verbally reporting, and to detailed written reporting of the search strategy, search results, and criteria for determining whether a patent warrants a formal opinion. If the latter course is chosen, one should be extremely careful in explaining why certain patents were not the subject of opinions. Generally, any third party patent identified in a clearance search should be the subject of a formal noninfringement and/or invalidity opinion unless it is completely clear from the face of the patent that there are no potential infringement issues. In the event that any claim construction is required (or the prosecution history needs to be consulted for any reason), a formal opinion of noninfringement and/or invalidity should probably be issued on the patent. One of the primary reasons for exercising extreme caution in this area is the potential for willful infringement. If a patent is identified in a clearance search, but an opinion of noninfringement and/or invalidity is not issued, this may heighten the risk of a finding of willful infringement if the acquiring company loses an infringement lawsuit. In such a case, the patentee may have a basis for arguing that the acquiring party had notice of the patent but recklessly disregarded it by infringing the patent and not seeking advice of counsel as to noninfringement and/or invalidity. 3. Patents and Applications Brought to the Attention of the Target Company Finally, something that should always be reported in writing to the acquiring company in any patent due diligence is whether there are any pending or threatened infringement lawsuits regarding the target company’s technology to be acquired and whether in any context any third party patents or published patent applications have been brought to the attention of the target company regarding the company’s technology. This is because it is universally

32. E.g., B. Braun Med., Inc., v. Abbott Labs., 124 F.3d 1419, 1427 (Fed. Cir. 1997) (patents are “unenforceable until the misuse is purged.”); C.R. Bard. Inc. v. M3 Sys., Inc. 157 F.3d 1340, 1372 (Fed. Cir. 1998) (“Patent Misuse arises in equity, and a holding of misuse renders the patent unenforceable until the misuse is purged; it does not, of itself, invalidate the patent.”); Qualcomm Inc. v. Broadcom Corp., 548 F.3d 1004, 1025 (Fed. Cir. 2008) (“[P]atent misuse does not render a patent unenforceable for all time.”). 33. 35 U.S.C.S. §§ 116, 256 (2009).


true that acquiring companies need to know whether they will be “buying a lawsuit.” Therefore, it is both necessary and critical that during patent due diligence the target company is asked to report any and all facts relevant to any third party suing, threatening to sue, citing, or otherwise bringing to the attention of the target company any U.S. (or international), patent or published patent application. This should include any mention whatsoever of a third party patent or patent application, and should not be limited to, for example, overt threats of infringement. It is important that, in addition to issued U.S. patents, published U.S. patent applications be included in this inquiry. This is because U.S. patent law provides for provisional infringement damages that cover infringement during the time before issuance of a U.S. patent when an infringer receives actual notice of a published U.S. patent application, a U.S. patent issues from the application with claims substantially identical to the claims of the application, and a court finds infringement.34 It is highly recommended that all patent due diligence investigations for the acquiring party include a written report on the issue of whether the target company has any ongoing or threatened patent litigation or has otherwise been put on notice of potential infringement of any third party patents regarding the technology the acquiring company seeks to practice. Further, this report should include a recommendation that any deal with the target company contain representations and warranties by the target company representing that it has reported all such circumstances and warranting that it will remedy any failure to report any such instances.

B. Limiting Liability Written opinions should be rendered with the goal of limiting potential liabilities to the issuing attorneys and firm. Limiting liabilities in specific situations are discussed above. Generally, opinions on the validity, enforceability, or inventorship and ownership of target company patents should include explanations that while every effort was made to detect issues negatively affecting validity, enforceability, or inventorship and ownership—and none were detected that are not addressed—it is not possible to conclude with certainty that none may be detected. This should include an explanation of efforts made to identify potential issues and any limitations imposed by the client that might have limited the ability to identify such issues. These may include limitations by the client on searching for prior art, limited access to internal company documents (such as invention disclosures), and limited access to key personnel such as inventors and potential co-inventors.

34. 35 U.S.C.S. § 154(d) (2009).


Other important factors to consider discussing in any written due diligence report include: (a) notice that the report is not for business or investment advice; (b) notice that the report is not a representation or warranty, and is neither intended for nor should be relied upon by any entity other than the acquiring party; and (c) express notice that the report is protected under attorney-client privilege and work product immunity, and including reminders to the client of steps to take to retain these privileges and immunities. Of course, provision of this information in writing must be done within the considerations above as to what results of a due diligence investigation should be given to the client in writing. However, generally it is possible to provide sufficient liability-limiting discussions in writing without conflicting with the considerations discussed above for issues that are best left unwritten.

VI. Practice Tips A. Patent Due Diligence for the Acquiring Company Typically Involves Both an Evaluation and Opinion of the Target Company’s Patents for Validity, Enforceability, Inventorship, and Ownership, and a Clearance (Freedom to Operate) Evaluation and Opinion of Third Party Patents Patent due diligence for an acquiring company (i.e., a company seeking to acquire patent rights from a target company by merger, acquisition, or licensing) typically requires both an evaluation and opinion on the validity, enforcement, and inventorship and ownership of the target company’s patents, as well as a clearance (freedom to operate) evaluation and opinion of third party patents that may affect the ability of the acquiring company to practice the technology of the target company’s patents. Additionally, acquiring companies typically also desire an evaluation and opinion of potential infringement of the target company’s patents in order to determine the scope of coverage that the target company’s patents provide (i.e., what activities by third parties are blocked by the target company’s patents).

B. A Competent Evaluation and Opinion Is Critical Regarding the Validity, Enforceability, Infringement (Claim Scope), Inventorship, and Ownership of the Target Company’s Patents It is critical that all evaluations and opinions of the target company’s patents follow the rules set forth by the Federal Circuit for competent opinions. These are discussed in Chapter 23.

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1. Must Construe Claims Virtually any patent evaluation and opinion must construe the patent’s claims. Therefore, claim construction is necessary for evaluations and opinions of patent validity, enforceability, infringement (claim scope), and inventorship and ownership. 2. Must Examine All Relevant Prosecution Histories Any patent evaluation and opinion that must construe a patent’s claims must include a review of the entire prosecution history of the patent. This includes the prosecution histories of all patent applications that are related to the patent at issue and have a common claim term, including parent, sibling, and child applications. An evaluation and opinion that does not consider all relevant prosecution histories may not be legally competent or sufficient. 3. Must Consider All Claims for Invalidity Evaluations and Opinions If no infringement of the independent claims is found, infringement evaluations and opinions may consider only the independent claims. This is because there can be no infringement of a dependent claim if the independent claim from which it depends is not infringed. However, patent validity must be addressed on a claim-by-claim basis. This means that every claim of a patent must be construed, evaluated, and opined on in a validity evaluation and opinion. 4. Prior Art Searching for Validity Analysis Evaluations and opinions of patent validity and invalidity frequently find patents to be invalid based on published prior art. Therefore, it is critical that invalidity and validity evaluations and opinions include at least one competent and thorough search for prior art publications. Ideally, a validity or invalidity evaluation and opinion should include one or more independent prior art searches conducted by one or more outside searching agencies. The attorneys conducting the due diligence should also perform their own independent prior art search. Generally, as the due diligence attorneys are the most familiar with the patent and prior art, they are in the best position to search for and evaluate potentially invalidating prior art. Further, it is critical that all search agencies be given as much information as possible about the patent claims at issue. This includes information on the patent and its claims, the prosecution history of the patent, all prior art cited in the prosecution history, and the prosecution histories and cited prior art of related applications, both U.S. and international.


5. Must Consider Non-Art Invalidity In addition to invalidity based on printed publications, validity and invalidity evaluations and opinions must take into consideration all possible means of patent invalidity. This includes (but is not limited to) invalidity based on lack of adequate written description, lack of enablement, lack of disclosure of best mode, or existence of double patenting (including obvious-type double patenting). 6. Infringement Evaluations and Opinions Require a Clear Understanding of the Potentially Infringing Subject Matter Infringement evaluations and opinions require a clear and thorough understanding of the potentially infringing subject matter. An infringement evaluation and opinion is only as good as the information on which it is based. Therefore, opinions of infringement or noninfringement must accurately describe the potentially infringing subject matter, and should caution that any deviation from the described subject matter may not be covered by the opinion. 7. Prior Art Searching for Validity Analysis Clearance (freedom to operate) evaluations and opinions must include at least one competent and thorough search for potentially infringing third party patents. Ideally, an infringement or noninfringement evaluation and opinion should include one or more independent patent searches conducted by one or more outside search agencies. The attorneys conducting the due diligence should also perform their own independent patent search. Generally, the due diligence attorneys are the most familiar with the potentially infringing technology and the third party patent landscape. Therefore, the due diligence attorneys are often in the best position to search for and evaluate third party patents for potential infringement. It is critical that all search agencies be given as much information as possible about the potentially infringing activity. As mentioned above, an infringement evaluation is only as good as the description of the potentially infringing subject matter—and the same applies to searches for potentially infringed third party patents. Moreover, searchers for potentially infringed third party patents should be given as much information as possible about the types of third party patents that are most likely to be infringed by the practice of the technology of the target company’s patents. This includes information on the target company’s patents, including the patents and their claims, the prosecution history of the patents, all prior art cited in the prosecution history, and the prosecution histories and cited prior art of related applications, both U.S. and international.

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Additionally, information should be provided describing any technology to be practiced that is not explicitly covered by the target company’s patents.

C. Evaluating Inventorship, Ownership, and Transferability of Ownership of Target Company Patents Is Critical Patent due diligence investigations for an acquiring company must include a thorough evaluation of inventorship, ownership, and transferability of ownership issues of target company patents. The presence of even one co-inventor on a target company patent who does not have an obligation to assign his or her patent rights to the target company may render the patent commercially worthless. Further, patent due diligence should necessarily include investigations into the potential of unnamed co-inventors being added to target company patents.

D. Reporting Issues and Limiting Liability Reports of patent due diligence for the acquiring company typically include formal written opinions of noninfringement and/or invalidity of third party patents related to the freedom to operate (clearance) investigation, as well as formal written opinions of infringement (claim scope), validity, enforceability, and inventorship and ownership of the target company’s patents. Due diligence attorneys should carefully consider the form of delivery of other patent due diligence evaluation and opinion issues. This includes any information that may negatively affect the target company’s patents (e.g., information about potential invalidity or unenforceability of target company patents). Written opinions of negative evaluations and opinions should be avoided where possible. Alternatively, they may be characterized in “pro and con” style to remain objectively neutral while still giving the acquiring company notice of potential issues affecting the target company’s patents. Where appropriate, reports, evaluations, and opinions should also suggest remedial measures; for example, for target company patents these could include engaging in reissue and reexamination for newly discovered potentially invalidating prior art, “curing” potential unenforceability, correcting potentially incorrect inventorship, and assigning unassigned inventor’s rights. Patent due diligence reports should always include written discussions and notices of any actual or threatened litigation or notices of potential infringement of third party patents or patent applications by the practice of the target company’s technology. Where appropriate, patent due diligence reports, evaluations, and opinions should also include suggestions for suitable representations and warranties by


the target company to cover potential issues such as problems with the target company’s patents or infringement of third party patents. Patent due diligence reports, evaluations, and opinions should include detailed information limiting potential liability of the due diligence attorneys and firm, such as detailed descriptions of the project requested by the acquiring company, how the project was carried out, and any limitations imposed by the acquiring company on the ability of the due diligence attorneys and firm to conduct a thorough and complete evaluation and opinion. Finally, patent due diligence reports, evaluations, and opinions should include reminders of associated attorney-client privilege and work product immunity. Information should be provided to the acquiring company on waiver as well as how to retain these privileges and immunities. Because certain unique aspects of attorney-client privilege and work product immunity may apply in the context of patent due diligence (such as the common interest doctrine), this chapter should be read in conjunction with Chapter 24, which discusses patent evaluation and opinion privileges and immunities, including special considerations associated with patent due diligence. (For example, Chapter 24 discusses the common interest doctrine.)

CHAP T ER

12 Evaluating and Opining on Third Party Patents Evaluations and Opinions of Patents for Clearance (Freedom to Operate), Noninfringement, Invalidity, and Unenforceability

I. Overview of Evaluations and Opinions of Third Party Patents for Clearance (Freedom to Operate), Noninfringement, and Invalidity Purposes

448

II. Clearance Evaluations and Opinions

449

A. Necessary Limitations on the Scope of Any Patent Clearance Evaluation and Opinion

449

B. Use of the Term Clearance Evaluation and Opinion instead of Freedom to Operate

450

C. Patent Searching

450

1. Accurately Understanding and Communicating to the Client the Subject Matter of the Proposed Technology and Its Limitations

451

2. Perform Multiple Independent Patent Searches

451

3. Provide the Search Agencies with Detailed but Focused Information on the Subject Matter to Be Searched

452

D. Reporting and Limiting Liability III. Claim Construction Is Required for Evaluations and Opinions of Patent Noninfringement, Invalidity, and Unenforceability

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A. Claim Construction Is Essential to Virtually All Patent Evaluations and Opinions, Including Noninfringement, Invalidity, and Unenforceability

455

B. Claim Construction Must Be Based on a Patent’s Intrinsic Evidence: The Claims, the Specification, and Its Prosecution History in the U.S. Patent Office, Including All Cited Prior Art

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446 Chapter 12 Evaluating and Opining on Third Party Patents IV. Noninfringement Evaluations and Opinions

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A. Obtain and Verify a Clear and Comprehensive Description of Technology to Be Practiced

457

B. Infringement Evaluations and Opinions Must Consider Both Literal Infringement and Infringement Under the Doctrine of Equivalents

457

C. Claim Construction Is Always Required

457

D. Consider Possible Indirect Infringement

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E. Reporting Considerations

458

V. Invalidity Evaluations and Opinions

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B. Consider All Possible Means of Invalidity, Including All Types of Anticipation, Enablement, Written Description, Best Mode, and Other Issues

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C. Every Claim Must Be Addressed in Invalidity Evaluations and Opinions

461

D. Prior Art Searching

461

E. Limiting Search-Related Liability

462

F. Reporting Considerations

463

VI. Enforceability Evaluations and Opinions

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465

B. Every Claim Need Not Be Addressed in Unenforceability Evaluations and Opinions

465

C. Potential Weaknesses of Unenforceability Evaluations and Opinions

465

D. Potential Unenforceability Issues

466

E. Limiting Liability

467

F. Reporting Considerations

467

VII. Practice Points

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A. Be Aware of Necessary Limitations on Any Patent Clearance Evaluation or Opinion and Expressly Include These in Writing

467

B. Use the Term Clearance Evaluations and Opinions, Not Freedom to Operate

468

C. Third Party Patent Searching Is Critical in Patent Clearance Evaluations and Opinions

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1. Accurately Understand and Confirm with the Client in Writing the Client’s Proposed Technology

469

Evaluating and Opining on Third Party Patents 2. Use Multiple Independent Search Agencies and Perform an Independent Search

469

3. Provide All Search Agencies with Identical, Detailed, and Focused Descriptions of the Proposed Technology and Related Materials

469

D. Claim Construction Must Be Done for Virtually Every Noninfringement, Invalidity, and Unenforceability Evaluation and Opinion

470

E. Level of Certainty of Reporting

470

F. Noninfringement Evaluations and Opinions Require a Clear, Definite Description of the Client’s Proposed Technology and Should Be Expressly Limited to This Subject Matter

471

G. Patent Noninfringement Evaluations and Opinions Must Consider Both Literal Infringement and Infringement Under the Doctrine of Equivalents, As Well As Indirect Infringement

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H. Special Considerations for Invalidity and Unenforceability Evaluations and Opinions Performed in Patent Due Diligence for an Acquiring Company

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1. Searching for Potentially Invalidating Prior Art

472

2. All Forms of Patent Invalidity and Unenforceability Must Be Considered

472

I. Issues Unique to Patent Unenforceability Evaluations and Opinions

473

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Usage Note: Other chapters of this treatise that relate to this one include claim construction (Chapter 2), infringement (both literal (Chapter 3) and under the doctrine of equivalents (Chapter 4)), indirect infringement (Chapter 5), validity (including anticipation by printed publications (Chapter 6), other forms of anticipation (Chapter 7), obviousness (Chapter 8), other forms of invalidity (Chapter 9)), enforceability (Chapter 10), opinions to avoid willful infringement (Chapter 13), competency of opinions (Chapter 23), and waiver of attorneyclient privilege and work product immunity issues (Chapter 24). Therefore, the reader of this chapter is referred to these chapters for further information on these specific issues.

I. Overview of Evaluations and Opinions of Third Party Patents for Clearance (Freedom to Operate), Noninfringement, and Invalidity Purposes This chapter discusses evaluations and opinions of third party patents for clearance (freedom to operate), noninfringement, invalidity, and unenforceability. Clearance evaluations and opinions, also called “freedom to operate” evaluations and opinions,1 are typically conducted when a company is considering practicing a certain technology and needs to know in advance whether third party patents may be infringed by that technology. Another use of patent clearance evaluations and opinions is as a part of patent due diligence when a company is considering acquiring a patented technology and seeks to determine whether the practice of the acquired technology may infringe third party patents. Clearance evaluations and opinions typically involve searching for third party patents that may cover a proposed technology. Any patents located in searches that may cover a proposed technology are evaluated for potential noninfringement by the proposed technology, and may also be evaluated for potential invalidity and unenforceability. Noninfringement evaluations and opinions are typically conducted when a company seeks to confirm that a proposed technology does not infringe

1. As discussed below, it is preferable to refer to these evaluations and opinions as clearance evaluations and opinions rather than freedom to operate evaluations and opinions. This is because well-drafted clearance evaluations and opinions are restricted and limited by certain expressly defined facts and presumptions; therefore, they represent clearance of third party patents in expressly defined circumstances. Use of the term freedom to operate may communicate a broader evaluation and opinion, perhaps even conveying that the evaluation and opinion assures complete freedom to operate against all third party patents, which, in fact, can never be the case.

Clearance Evaluations and Opinions

specific third party patents. As such, noninfringement evaluations and opinions typically lack the search component of clearance opinions. However, once specific third party patents have been identified for noninfringement evaluation, they may be a part of clearance opinions. As with noninfringement evaluations and opinions, invalidity and unenforceability evaluations and opinions are typically conducted when a company seeks to determine whether a proposed technology infringes any valid and enforceable claims of a third party patent. Thus, like noninfringement evaluations and opinions, invalidity and unenforceability evaluations and opinions typically lack the search component of clearance opinions. However, they too may be a part of clearance opinions once specific third party patents have been identified and a company seeks to determine whether these patents may be invalid or unenforceable.

II. Clearance Evaluations and Opinions A. Necessary Limitations on the Scope of Any Patent Clearance Evaluation and Opinion The key feature of patent clearance evaluations and opinions (both from the point of view of delivering what a client requires and expects and that of limiting potential liability for the attorneys and law firm conducting the evaluation and opinion) is searching for third party patents that might be infringed by a client’s proposed technology. In order to manage client expectations and provide clients with meaningful clearance advice on which they may rely (as well as to limit potential liability on the part of attorneys and law firms providing patent clearance advice), it is critical that patent clearance evaluations and opinions clearly define and limit the scope of the clearance advice provided. A well-drafted patent clearance evaluation and opinion clearly sets forth the precise limitations of the evaluation and opinion. Most importantly, this will include a detailed description of the subject matter for which the clearance evaluation and opinion (including its necessary searching for third party patents) has been performed. Further, the evaluation and opinion should include an express statement that the evaluation and opinion is strictly limited to the subject matter exactly as described, and that the evaluation and opinion cannot be relied upon if there are any changes to the subject matter exactly as it is described in the evaluation and opinion. Moreover (and as discussed below) no amount of searching can ever guarantee that every third party patent that potentially covers any aspect of a proposed technology can be located. There are always inherent uncertainties in searching for potentially infringed U.S. patents. Therefore, a well-drafted

449


clearance evaluation and opinion provides express disclaimers on the accuracy and completeness of patent search results and any client reliance on them.

B. Use of the Term Clearance Evaluation and Opinion instead of Freedom to Operate Because as discussed above, patent clearance evaluations and opinions must necessarily be limited in scope, it is preferable to refer them as patent clearance evaluations and opinions as opposed to freedom to operate evaluations and opinions, a term that is sometimes used in the art. Well-drafted patent clearance evaluations and opinions are clearly and expressly restricted and limited in scope and meaning by specifically defined facts, including the precise definition of the proposed technology covered and an explanation of the inherent lack of certainty in searching for and identifying all possible third party patent issues. Use of the term freedom to operate to refer to patent clearance evaluations and opinions may communicate to the client a broader evaluation and opinion than is, in fact, provided or even possible. Indeed, this term may even convey to a client that the evaluation and opinion assures complete freedom to operate a proposed technology against all potential third party patents. As discussed herein, it is not possible to provide a patent clearance evaluation or opinion having this scope and level of certainty. Thus, to avoid creating this impression, and to be consistent with the express limitations and restrictions placed on a well-drafted patent clearance evaluation or opinion, it is preferable not to refer to patent clearance evaluations and opinions as freedom to operate evaluations and opinions.

C. Patent Searching As mentioned above, a critical aspect of patent clearance evaluations and opinions is the search for third party patents that might cover aspects of a proposed technology and, thus, might affect the ability of a client to practice a proposed technology. Indeed, this search is at the heart of patent clearance evaluations and opinions. Because of this, it is extraordinarily important that all patent clearance evaluations and opinions expressly and explicitly define the subject matter to be searched—and caution that the results of the evaluation and opinion are expressly limited to this subject matter. Further, because searching for third party patents is inherently imperfect, it is essential that all clearance evaluations and opinions explain the inherent limitations in searching, and caution that no evaluation and opinion could ever guarantee that every possible third party patent of interest has been located and evaluated.


1. Accurately Understanding and Communicating to the Client the Subject Matter of the Proposed Technology and Its Limitations A critically important issue for all patent clearance evaluations and opinions is to understand and to define expressly and explicitly, in writing, the precise scope of the client’s proposed technology. This is of paramount importance as the precise definition of the proposed subject matter forms the definition of the subject matter searched for third party patents. Moreover, patent clearance evaluations and opinions must expressly caution, in writing, that the results of the clearance evaluation or opinion are limited solely to the technology exactly as described, and that any deviation from the described technology is not covered by the evaluation or opinion. Doing this provides the client with notice of the extent to which the clearance evaluation and opinion may be relied upon. This includes clearly notifying the client that even small changes to the proposed technology will affect the client’s ability to rely on the clearance evaluation and opinion. This is extremely important as it is common for changes to occur in a proposed technology as it is being developed for implementation in the marketplace. Absent strong cautionary language in a clearance evaluation or opinion, clients may presume that minor changes in a proposed technology are still covered by a clearance evaluation or opinion. Further, an express and precise definition of the proposed technology assures that the attorneys and law firm preparing and issuing the evaluation and opinion understood the client’s proposed technology. Finally, and as discussed below, clearly and explicitly defining the proposed technology and cautioning that any changes to the defined technology are not covered by the evaluation and opinion will help to limit potential liability of the individual attorneys and law firm preparing and issuing the clearance evaluation and opinion. 2. Perform Multiple Independent Patent Searches For all patent clearance evaluations and opinions, at least two or more independent, competent, and reliable outside searching agencies should always be retained to perform independent searches for third party U.S. patents and patent applications that might be relevant to a client’s proposed technology. Importantly, because no search can be perfect, increasing the number of independent searching agencies performing these searches should increase the chances that as many third party patents of interest will be located as possible while decreasing the risk of missing potentially significant blocking third party patents. Therefore, a good practice dictates the use of at least two or more independent searching agencies in clearance searches for third party patents. This important aspect of performing clearance evaluations and opinions may add costs to a project; however, the benefits it brings in helping to

451

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assure thorough searching generally far outweighs these additional costs. For this reason, even cost-sensitive clients should be strongly encouraged to allow the use of at least two independent outside agencies to search for third party patents of interest in patent clearance evaluations and opinions. Still further, in addition to the use of at least two independent outside search agencies, the attorneys who are conducting the clearance evaluation and opinion should themselves also perform a complete and thorough search for third party patents of interest as it is a good practice never to rely solely upon searches performed by outside agencies. The attorneys conducting a clearance evaluation and opinion will always have the most detailed knowledge of the client’s proposed technology, as well as the relevant art, U.S. patent classifications, and other issues important to these searches. Moreover, when more than one search agency is used, it is a good practice to provide all agencies with identical, complete information on the proposed technology so that each agency may perform separate searches based on the same information. Due to factors such as costs, clearance searches are sometimes divided into aspects of the proposed technology with separate search agencies being asked to independently search for third party patents for only subsections of a proposed technology. However, it is preferable to have each outside search agency perform an independent search on the entire technology because of the redundancy of results that this should create. This intentional redundancy of search results assists the attorneys performing the clearance evaluation and opinion in determining, for example, whether each independent search was sufficiently thorough and complete. If so, the results of each search should identify essentially the same third party patents of interest. Further, when two or more independent searches—and the clearance attorney’s own searches—identify essentially the same third party patents, the attorneys conducting the clearance evaluation and opinion may be reasonably certain that the search was as thorough as possible, and likely identified the key third party patents of interest. When multiple independent searches on identical subject matter identify disparate results, this should indicate to the attorneys performing the clearance evaluation and opinion that additional searching is necessary. 3. Provide the Search Agencies with Detailed but Focused Information on the Subject Matter to Be Searched It is very important that the search agencies be given as much detailed, but focused, information about the client’s proposed technology as possible. This includes a detailed description of the technology as well as information regarding any arts and patent classifications in which relevant third party patents may be identified. In addition, information that may assist search agencies includes known patents that cover the technology (both third party and client patents), prior art describing the technology, and names of third party


individuals and companies known or believed to be involved in the technology and related technologies. Much of this information may be obtained from the client and from any patents (both U.S. and international) the client may have on the subject matter, including the prosecution histories (U.S. and international) of these patents and the prior art cited therein. It is also important that search agencies be given as much information as possible limiting and focusing the scope of the technology to be searched. This includes information on aspects of the technology (if any) that are not to be included in the clearance evaluation and opinion. The best search results come from providing searching agencies the most detailed, yet focused, information possible on the client’s proposed technology.

D. Reporting and Limiting Liability A well-drafted patent clearance evaluation and opinion clearly sets forth its precise limitations. Perhaps most importantly, these include a detailed description of the subject matter for which the clearance evaluation and opinion is being performed, including its necessary searching for third party patents. The evaluation and opinion should also include an express statement that it is strictly limited to the subject matter exactly as described. Moreover, because no amount of searching can ever guarantee that every third party patent that potentially covers any aspect of a proposed technology can be located, a welldrafted clearance evaluation and opinion provides express disclaimers on the reliability of the third party patent search results. For example, patent clearance evaluations and opinions should never conclusively state or guarantee that all third party U.S. patents that could potentially affect a client’s ability to practice a proposed technology have been identified and addressed. Fortunately, knowledgeable counsel and businesspersons at client companies should never expect such certainty from patent clearance evaluations and opinions. Indeed, any clearance evaluation or opinion having such certainty would likely be viewed by an experienced client as being suspect. In fact, acceptance and reliance on such an evaluation or opinion by a client may raise issues with the client’s exercise of its duty of due care in investigating clearance prior to, for example, practicing a proposed technology. Generally, proper reporting to reduce liability for potential searching errors and omissions involves providing detailed descriptions, in writing, to the client of: (a) the information received from the client as to the client’s proposed technology, which information was used and relied upon in the searches and to which the clearance evaluation and opinion is necessarily limited; and (b) any limitations placed on the search by the client (for example, but not limited to, cost and time limitations, limitations on use of independent searching agencies, or forced reliance by the attorneys and law firm on search results of others, search strategies of others, or representations by others of relevant patents).

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Additionally, any patent clearance evaluation and opinion should clearly state that it is not possible for the issuing attorneys and firm to conclusively represent that all relevant patents have been located and that no such representation is being made. Finally, it is important that any patent clearance evaluation or opinion clearly inform the client that the report and its conclusions are strictly limited to the proposed technology as expressly and explicitly described in the report, and that any deviation from this technology is not covered by the clearance evaluation or opinion. Generally, clearance evaluations and opinions are tied with evaluations and opinions of patent noninfringement, invalidity, or unenforceability of any third party patents that are located in the searching and identified as potentially raising issues. These evaluations and opinions are discussed below in Sections IV through VI, respectively. It is also important to bear in mind that one should not address in writing potential patent infringement issues for which there is not a solid noninfringement, invalidity, or unenforceability position. Therefore, whenever third party patents are located in a patent clearance search that may arguably cover a client’s proposed technology, but a solid noninfringement, invalidity, or unenforceability position is lacking on which a written opinion may be issued to the client, such patents should only be discussed verbally with the client. In such cases, patent counsel and clients may discuss potentially licensing, acquiring, or designing around these third party patents.

III. Claim Construction Is Required for Evaluations and Opinions of Patent Noninfringement, Invalidity, and Unenforceability Prior to addressing patent evaluations and opinions of noninfringement, invalidity, and unenforceability in Sections IV through VI below, this section discusses claim construction, as that is a necessary requirement of virtually all evaluations and opinions of patent noninfringement, invalidity, and unenforceability. As discussed in Chapter 2, claim construction is the determination of the proper legal meaning of a patent’s claims. It is based upon a determination of the meaning of claim language to one of ordinary skill in the relevant art at the time of the patent application, taking into consideration any specific meanings given to the claim terms in the specification of the patent or during its prosecution history in the U.S. Patent Office (i.e., the intrinsic evidence).2

2. E.g., Phillips v. AWH Corp., 415 F.3d 1303 (Fed. Cir. 2005) (en banc); Markman v. Westview Instruments, Inc., 52 F.3d 967 (Fed. Cir. 1995) (en banc), aff ’d, 517 U.S. 370 (1996); Vitronics

Claim Construction Is Required for Evaluations and Opinions 455

A. Claim Construction Is Essential to Virtually All Patent Evaluations and Opinions, Including Noninfringement, Invalidity, and Unenforceability As a patent’s claims define the subject matter of the patent grant, claim construction is essential to virtually all evaluations and opinions of U.S. patents, including those on clearance, noninfringement, invalidity, and unenforceability.3 Indeed, without a determination of the proper meaning of a patent’s claims, it is simply not possible to evaluate and opine on patents for these four purposes. In fact, U.S. courts consistently hold that it is not possible to prepare a competent legal opinion of noninfringement or invalidity without properly construing a patent’s claims.4 Rare exceptions to this rule might include situations in which only a patent’s term—and not its claims—is at issue.

B. Claim Construction Must Be Based on a Patent’s Intrinsic Evidence: The Claims, the Specification, and Its Prosecution History in the U.S. Patent Office, Including All Cited Prior Art Claim construction involves determining the meaning of a patent’s claims based on the intrinsic evidence relevant to the patent, which comprises the patent’s claims, specification, and prosecution history in the U.S. Patent Office, including all cited prior art.5 Therefore, it is necessary to obtain and review the complete prosecution history of any patent for which one is evaluating or opining on in any manner related to the claims.6 Importantly, the prosecution history of a U.S. patent includes the prosecution history in the U.S. Patent Office of the application that issued as the subject patent. Additionally, it includes the prosecution histories of other U.S. patents and/or patent applications that are “formally” related to the subject patent for which a common claim term is at issue. Applications that are formally related to a patent include: (a) parent and ancestor applications from which the patent at issue is related as, or via, continuation, divisional, or

3. 4.

5. 6.

Corp. v. Conceptronic, Inc., 90 F.3d 1576 (Fed. Cir. 1996); Innova/Pure Water, Inc. v. Safari Water Filtration Sys., 381 F.3d 1111 (Fed. Cir. 2004). See Chapter 2; e.g., Phillips, 415 F.3d at 1303; Markman, 52 F.3d at 967; Vitronics, 90 F.3d at 1576; Innova/Pure Water, 381 F.3d at 1111. E.g., Critikon, Inc. v. Becton Dickinson Vascular Access, Inc., 120 F.3d 1253, 1259–60 (Fed. Cir. 1997) (finding that opinions were not sufficiently competent to overcome a charge of willful infringement where the opinions contained “no analysis of specific claims, [and] no interpretation of claim language. . . .”). E.g., Phillips, 415 F.3d at 1313; Vitronics, 90 F.3d at 1582; Nystrom v. Trex Co., Inc., 424 F.3d 1136, 1142 (Fed. Cir. 2005). E.g., Markman, 52 F.3d at 980.

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continuation-in-part applications from the parent or ancestor applications; (b) sibling applications to the patent at issue that are related to the patent at issue by pending from a common ancestor or parent application as, or via, continuation, divisional, or continuation-in-part applications; and (c) child and grandchild applications that are related to the patent at issue as, or via, continuation, divisional, or continuation-in-part applications. Therefore, the prosecution history of a patent may include “formally related” applications having at least one claim term in common with the patent at issue, in which the related applications were prosecuted in the U.S. Patent Office before, during, or even after prosecution of the application that issued as the patent at issue.7 Furthermore, the intrinsic evidence also includes prior art cited in the patent or in the patent’s prosecution history. Thus, this prior art must also be considered in construing a patent’s claims.

IV. Noninfringement Evaluations and Opinions Evaluations and opinions of noninfringement of U.S. patents involve an objective determination that based on proper application of U.S. patent law, a reasonable U.S. court should hold that a specifically defined technology does not infringe certain claims of a U.S. patent, either literally or under the doctrine of equivalents. Noninfringement evaluations and opinions are commonly performed as part of patent clearance evaluations and opinions when specific U.S. patents have been identified as potentially covering a proposed technology and a company seeks an evaluation and opinion that a reasonable court should hold that its proposed technology does not infringe the patent. Noninfringement evaluations and opinions are performed in other situations as well, such as when a company becomes aware of a third party patent that might cover its current or proposed technology. As discussed in Chapter 13, in such cases, if a company practices the subject technology and subsequently

7. E.g., Goldenberg v. Cytogen, Inc., 373 F.3d 1158, 1167–68 (Fed. Cir. 2004) (formal relationship required); Microsoft Corp. v. Multi-Tech Sys., Inc., 357 F.3d 1340, 1349 (Fed. Cir. 2004); Advanced Cardiovascular Sys. v. Medtronic, Inc., 265 F.3d 1294, 1305 (Fed. Cir. 2001) (the prosecution history of a related patent must address “a limitation in common with the patent in suit”); Microsoft Corp. v. Multi-Tech Sys., Inc., 357 F.3d 1340, 1349 (Fed. Cir. 2004) (statement made during prosecution of related patent operated as a disclaimer with respect to a later-issued patent.); NTP, Inc. v. Research In Motion, Ltd., 418 F.3d 1282, 1293 (Fed. Cir. 2005); Verizon Servs. Corp. v. Vonage Holdings Corp., 503 F.3d 1295, 1306 (Fed. Cir. 2007) (“We have held that a statement made by the patentee during prosecution history of a patent in the same family as the patent-in-suit can operate as a disclaimer. Microsoft Corp. v. MultiTech Sys., Inc., 357 F.3d 1340, 1349 (Fed. Cir. 2004) (statement made during prosecution of related patent operated as a disclaimer with respect to a later-issued patent)”).

Noninfringement Evaluations and Opinions 457

loses a lawsuit for infringement of the patent, the company may avoid a finding of willful infringement (i.e., objective recklessness) by a showing of reasonable reliance on an objective and competent opinion of noninfringement.

A. Obtain and Verify a Clear and Comprehensive Description of Technology to Be Practiced A correct determination of noninfringement necessarily depends on both a correct and complete construction of the patent’s claims and a complete and accurate understanding of the proposed potentially infringing subject matter. Therefore, it is critical for attorneys performing noninfringement evaluations and opinions to obtain—and verify—a clear and complete definition of all subject matter that a client wishes to practice that might infringe a third party patent. A misunderstanding on this issue may render a noninfringement evaluation and opinion virtually useless, or worse, inaccurate.

B. Infringement Evaluations and Opinions Must Consider Both Literal Infringement and Infringement Under the Doctrine of Equivalents A claim is infringed if every claim limitation is found in the potentially infringing subject matter either literally or equivalently.8 Therefore, noninfringement evaluations and opinions of U.S. patents must take into consideration both literal infringement and infringement under the doctrine of equivalents.9 Chapter 3 provides a detailed discussion on evaluating and opining on literal infringement, and Chapter 4 provides one on evaluating and opining on infringement under the doctrine of equivalents.

C. Claim Construction Is Always Required As discussed above, a first and necessary step in virtually all evaluations and opinions of patents is claim construction, which is also a necessary first step in evaluating and opining on patent noninfringement.10 The construed claims

8. E.g., Festo Corp. v. Shoketsu Kinzoku Kogyo Kabushiki Co., 535 U.S. 722, 731–32 (U.S. 2002); Allen Eng’g Corp. v. Bartell Indus., 299 F.3d 1336, 1345 (Fed. Cir. 2002). 9. E.g., Festo, 535 U.S. at 731–32; Allen Eng’g, 299 F.3d at 1345. 10. E.g., Cybor Corp. v. FAS Techs., Inc., 138 F.3d 1448, 1454 (Fed. Cir. 1998) (en banc); WarnerLambert Co. v. Purepac Pharm. Co. (In re Gabapentin Patent Litig.), 503 F.3d 1254, 1259


are then compared against the potentially infringing subject matter to determine infringement.11

D. Consider Possible Indirect Infringement Direct infringement occurs when an accused technology literally or equivalently contains every limitation of a patent’s claim.12 However, U.S. patent law provides for a number of other means by which a U.S. patent may be infringed in addition to direct infringement. These are covered in detail in Chapter 5; they include inducement of infringement, contributory infringement, and joint infringement. Thus, a conclusion of lack of direct infringement does not conclude a proper noninfringement evaluation and opinion. In addition to direct infringement, evaluations and opinions of patent noninfringement must also consider indirect forms of infringement (as discussed in Chapter 5).

E. Reporting Considerations Evaluations and opinions on patent noninfringement need not, and, in fact, preferably do not contain absolute determinations and opinions. As discussed throughout this treatise, U.S. patent law is complex and constantly evolving, and evaluations and opinions of patent noninfringement are necessarily based on facts that rarely allow one to conclude issues with certainty. Indeed, the Federal Circuit Court of Appeals has recognized that “[a]n opinion of counsel, of course, need not unequivocally state that the client will not be held liable for infringement. An honest opinion is more likely to speak of probabilities than certainties.”13 Appendices A, B, and C provide examples of patent noninfringement and invalidity opinions, including ways in which to express the level of certainty of conclusions.

(Fed. Cir. 2007); Becton Dickinson & Co. v. C.R. Bard, Inc., 922 F.2d 792, 796 (Fed. Cir. 1990). 11. E.g., Cybor, 138 F.3d at 1454; Warner-Lambert, 503 F.3d at 1259; Becton Dickinson, 922 F.2d at 796. 12. E.g., Festo, 535 U.S. at 731–32; Allen Eng’g, 299 F.3d at 1345. 13. Read Corp. v. Portec, Inc., 970 F.2d 816, 829 n.9 (Fed. Cir. 1992).

Invalidity Evaluations and Opinions

V. Invalidity Evaluations and Opinions Evaluations and opinions of invalidity of U.S. patents involve an objective determination that based on proper application of U.S. patent law, a reasonable U.S. court should hold that one or more claims of a specific U.S. patent are invalid. Because there is no infringement liability for infringement of invalid claims, invalidity evaluations and opinions are commonly performed as part of patent clearance evaluations and opinions. They are used when specific U.S. patents have been identified as potentially covering a proposed technology and a company seeks an evaluation and opinion that a reasonable court should hold that its proposed technology does not infringe any valid claim of a patent. As with noninfringement evaluations and opinions, invalidity evaluations and opinions are performed in other situations as well, such as when a company becomes aware of a third party patent that might cover its current or proposed technology. As discussed in Chapter 13, in such cases, if a company practices the subject technology and subsequently loses a lawsuit for infringement of the patent, the company may avoid a finding of willful infringement (i.e., objective recklessness) by a showing of reasonable reliance on an objective and competent opinion that practicing the technology would not infringe any valid claims. Further, opinions of patent noninfringement and invalidity are sometimes combined in situations in which a proposed technology does not infringe certain claims of a patent and the same or other claims are invalid. The net effect of such combined evaluations and opinions is an opinion that a reasonable court should hold that practicing a specific technology should not infringe any valid claim of a specific patent. As discussed in detail in Chapter 11, another situation in which invalidity evaluations and opinions are conducted is in the context of patent due diligence for an acquiring company. In these situations, the acquiring company is considering whether it is likely a reasonable U.S. court would find the claims of the patents it seeks to acquire to be valid. These evaluations and opinions are conducted in order for an acquiring company to avoid acquiring potentially invalid patents.

A. Claim Construction Is Always Required As discussed above, a first and necessary step in virtually all evaluations and opinions of patents is claim construction, which is also a necessary first step in evaluating and opining on patent invalidity.14 The construed claims are

14. E.g., In re Omeprazole Patent Litig., 483 F.3d 1364, 1371 (Fed. Cir. 2007).

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then evaluated for invalidity by comparing them with the prior art (for art-based invalidity) or, for example, with the specification (for invalidity based on issues such as lack of enablement or written description).15

B. Consider All Possible Means of Invalidity, Including All Types of Anticipation, Enablement, Written Description, Best Mode, and Other Issues A patent’s claims may be invalid under many different—and divergent—grounds. These are discussed in detail in Chapter 6 (anticipation by printed publications), Chapter 7 (other forms of anticipation), Chapter 8 (obviousness), and Chapter 9 (other forms of invalidity). For example, a common form of invalidity is anticipation under 35 U.S.C. § 102(b) based on a printed publication. A patent claim is invalid under 35 U.S.C. § 102(b) by a printed publication if the publication is prior art to the patent16 and discloses “each and every claim limitation . . . either explicitly or inherently.”17 Moreover, “a prior art reference may anticipate without disclosing a feature of the claimed invention if that missing characteristic is necessarily present, or inherent, in the single anticipating reference.”18 In addition to anticipation by a printed publication, U.S. patent law provides a number of additional means by which a patent claim may be anticipated. For example, the following non-limiting examples occurring under certain circumstances19 may render a patent claim invalid due to anticipation: sale, offer for sale, public use, public knowledge, prior patenting, or abandonment of the invention. Still further (as discussed in detail in Chapter 9), U.S. patent law provides other means by which a patent’s claims may be invalid. These include the following nonlimiting examples: lack of an enabling description for the subject matter of the claims,20 lack of sufficient written description to support the claims,21 and lack of description of the best mode of practicing the claimed invention.22 Therefore, evaluations and opinions of patent validity should take into consideration all possible bases of invalidity. This is particularly important in evaluations and opinions for acquiring companies in patent due diligence

15. 16. 17. 18. 19. 20. 21. 22.

Id. See Chapter 6 for details. Omeprazole, 483 F.3d at 1371. Schering Corp. v. Geneva Pharm., Inc., 339 F.3d 1373, 1377 (Fed. Cir. 2003). See Chapter 7 for details. 35 U.S.C.S. § 112, P 1 (2009). Id. Id.

Invalidity Evaluations and Opinions

where the goal is to rule out all possible means of invalidity and to opine that a patent appears to be valid.

C. Every Claim Must Be Addressed in Invalidity Evaluations and Opinions As discussed in Chapters 6–9, the validity of a patent is determined on a claim-by-claim basis. Therefore, patent evaluations and opinions of invalidity must take into consideration the validity of each claim of a patent separately and in full. This necessarily includes construing the terms of each claim. This is distinguished from a patent infringement evaluation and opinion, wherein it is not always necessary to address infringement of all claims. For example, if it is determined that an independent claim is not infringed, it is not necessary to address infringement of the claims that are dependent on the non-infringed claim because those claims cannot be infringed by the same subject matter.23

D. Prior Art Searching As mentioned above, anticipation by printed publication is among the most common means by which an issued patent’s claims are found to be invalid. This is likely due (at least in part) to the relative ease of obtaining prior art printed publications and of proving the disclosure and date of printed publications. For this reason, those creating invalidity evaluations and opinions should always perform detailed and extensive searches of prior art for printed publications that may invalidate claims of the patent(s) under review. This searching is especially important when (as discussed in detail in Chapter 11), one is evaluating a patent for validity in the context of patent due diligence for an acquiring company. Under these circumstances, a key aspect of the due diligence is searching for any prior art that may potentially invalidate patents the company is considering acquiring. The issues involved in searching for potentially invalidating prior art to a U.S. patent are similar to those discussed above for searching for potentially blocking third party patents when conducting clearance evaluations and opinions. For example, preferably two or more independent and responsible search agencies should be engaged to independently search for potentially invalidating prior art. It is extremely important that the search agencies be

23. E.g., Jeneric/Pentron, Inc. v. Dillon Co., Inc., 205 F.3d 1377, 1383 (Fed. Cir. 2000); Wolverine World Wide, Inc. v. Nike, Inc., 38 F.3d 1192, 1199 (Fed. Cir. 1994); Wahpeton Canvas Co., Inc. v. Frontier, Inc., 870 F.2d 1546, 1553 (Fed. Cir. 1989).

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given as much both general and specific information as possible as to the invention claimed so that the prior art search can be broad, yet as focused as possible. Furthermore, the attorneys conducting the invalidity evaluation and opinion generally should also conduct their own independent prior art search for potentially invalidating prior art. The attorneys preparing an invalidity evaluation and opinion are generally the most knowledgeable about a client’s proposed technology and, therefore, are generally the most likely to identify potentially invalidating prior art to specific patents. As with searching for potentially important third party patents in clearance evaluations and opinions, valuable information for use in searching for potentially invalidating prior art that should be given to independent agencies and used by the evaluating and opining attorneys includes: (a) the patent under scrutiny; (b) any patents related to the patent under scrutiny (both U.S. and non-U.S. patents); (c) third party patents (both U.S. and related non-U.S. patents) located in searches for potentially blocking third party patents in related clearance evaluations and opinions, if any; and (d) any prior art (both U.S. and non-U.S.) cited in the prosecution histories of the patent under scrutiny and those of any related patents (both U.S. and non-U.S.).

E. Limiting Search-Related Liability Especially in the context of searching for potentially invalidating prior art when evaluating potential target patents for validity in patent due diligence, the importance of locating invalidating prior art and in detecting other grounds of invalidity of a target company’s patents cannot be overstated. However, it is never possible to guarantee an acquiring company in patent due diligence—or indeed in any context—that there is no printed prior art in existence that would invalidate one or more claims of a target company patent or that no other means of invalidity could ever affect the patent. Therefore (as discussed in Chapter 13), patent due diligence reports for acquiring companies should never conclusively state or guarantee that the claims of a target company’s patents are valid. Rather (and as discussed in more detail in Chapter 13), validity results in patent due diligence should be reported in the context of the limitations that prevent the drawing of an absolute conclusion that a target company’s patents are valid. Similarly, when evaluating a third party patent for potential invalidity in other contexts (such as clearance evaluations and opinions), when invalidity cannot be found for a third party patent of interest, it is never possible to guarantee a client that no prior art or other means of invalidity can not be found that will invalidate the patent. On the other hand, once invalidating prior art has been found in a search, if the invalidity position is strong, the issues of search-related liability are minimized. Regardless, in no situations should attorneys assure clients that the results of any prior art or patent search are absolute.

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F. Reporting Considerations Evaluations and opinions on patent invalidity need not and, in fact, preferably do not constitute absolute determinations and opinions. As discussed throughout this treatise, U.S. patent law is complex and constantly evolving, and evaluations and opinions of validity of U.S. patents are necessarily based on facts that rarely allow one to conclude issues with certainty. Indeed, the Federal Circuit Court of Appeals has recognized that “[a]n opinion of counsel, of course, need not unequivocally state that the client will not be held liable for infringement. An honest opinion is more likely to speak of probabilities than certainties.”24 Appendices A, B, and C provide examples of patent noninfringement and invalidity opinions, including ways in which to express the level of certainty of conclusions.

VI. Enforceability Evaluations and Opinions Evaluations and opinions of enforceability of U.S. patents involve an objective determination that based on proper application of U.S. patent law, a reasonable U.S. court should hold that the U.S. patent is unenforceable. As discussed in detail in Chapter 10, U.S. courts generally hold patents unenforceable when patentees have engaged in inequitable conduct (also know as fraud on the Patent Office) in obtaining a U.S. patent or have engaged in illegal expansion of an issued patent’s rights.25 As discussed in detail in Chapter 10, unenforceability most frequently arises in situations in which a patentee intentionally withholds known material prior art from the Examiner in violation of the patentee’s duty of disclosure to the U.S. Patent Office.26 As also discussed in Chapter 10, a patent that is unenforceable is not, for that reason, invalid.27 Rather, the patent cannot be enforced in court. However, the practical effect of a court determining that a U.S. patent is unenforceable is similar to that of a court holding that all of a patent’s claims are invalid. If a

24. Read Corp. v. Portec, Inc., 970 F.2d 816, 829 n.9 (Fed. Cir. 1992). 25. However, even if a court finds inequitable conduct, it is not compelled to hold that a patent is unenforceable. Kemin Foods, L.C. v. Pigmentos Vegetales Del Centro S.A. De C.V., 464 F.3d 1339, 1346 (Fed. Cir. 2006) (“Even when a court finds that the patentee failed to disclose material information to the PTO and acted with deceptive intent, the court retains discretion to decide whether the patentee’s conduct is sufficiently culpable to render the patent unenforceable.”); Hoffmann-La Roche, Inc. v. Promega Corp., 323 F.3d 1354, 1359, 1372 (Fed. Cir. 2003). 26. See Chapter 10; e.g., Dayco Prods. v. Total Containment, Inc., 329 F.3d 1358, 1363 (Fed. Cir. 2003). 27. See Chapter 10; e.g., Minn. Mining & Mfg. Co. v. Johnson & Johnson Orthopaedics, Inc., 976 F.2d 1559, 1569 (Fed. Cir. 1992).


court holds that a patent is unenforceable for conduct relating to even one claim of a patent, the entire patent is unenforceable.28 Therefore, as with a patent having all invalid claims, an unenforceable patent cannot be infringed because the claims cannot be enforced by the patentee in an infringement action. Because unenforceable claims cannot be asserted in an infringement action, unenforceability evaluations and opinions are sometimes performed as part of patent clearance evaluations and opinions. When specific U.S. patents have been identified as potentially covering a proposed technology, a company may seek an evaluation and opinion that a reasonable court should hold that its proposed technology does not infringe any enforceable claim of a patent. As with noninfringement and invalidity evaluations and opinions, unenforceability evaluations and opinions are performed in other situations as well, such as when a company becomes aware of a third party patent that may cover its current or proposed technology. As discussed in Chapter 10, in such cases, if a company practices the subject technology and is sued for infringement of the patent (i.e., a court allows the patentees to enforce the patent) and loses, the company may avoid a finding of willful infringement (i.e., objective recklessness) by a showing of reasonable reliance on the opinion. Reasonable reliance by the company on an objective and competent opinion that practicing the technology would not infringe any enforceable claims is a defense to willful infringement. However, as discussed below, there are unique limitations on unenforceability evaluations and opinions, and for these reasons, they are infrequently used as a defense against willful infringement. Further, because a court’s holding of patent unenforceability renders all claims of a patent unenforceable, it is not necessary to combine opinions and evaluations of unenforceability with opinions and evaluations of noninfringement or invalidity. However, sometimes these opinions are combined in situations where one opines that a patent may be both unenforceable and have certain claims that are also not infringed or are invalid. Also, as discussed briefly below (and in detail in Chapter 10), because opinions of unenforceability are difficult to prove, they are rarely issued as stand-alone opinions as a defense against possible willful infringement. Instead, in the context of providing opinions as defenses to willful infringement, unenforceability issues are frequently mentioned as potential additional issues within the context of noninfringement or invalidity opinions that themselves are sufficient to form a defense to willful infringement. As discussed in detail in Chapter 11, another situation in which unenforceability evaluations and opinions are conducted is in the context of patent due diligence for an acquiring company. In these situations, the acquiring company

28. E.g., PerSeptive Biosystems, Inc. v. Pharmacia Biotech, Inc., 225 F.3d 1315, 1322 (Fed. Cir. 2000).


is considering whether the claims of a patent it seeks to acquire might be found by a court to be unenforceable. These opinions are conducted in order for acquiring companies to avoid purchasing potentially unenforceable patent rights.

A. Claim Construction Is Always Required As discussed above, a first and necessary step in virtually all evaluations and opinions of patents is claim construction. Accordingly, claim construction is a necessary first step in evaluating and opining on patent enforceability.29 The construed claims are then evaluated for potential unenforceability.30 Because a holding of inequitable conduct in the procurement of a patent—leading to a potentially unenforceable patent—requires a court to find that the patentee intentionally and fraudulently made a material misrepresentation or omission to the Patent Office, one must construe the patent’s claims, sometimes as the existed during prosecution, to determine whether any representation or omission to the Patent Office was material.31 As discussed in detail in Chapter 10, materiality is related to the patentability of a patent’s properly construed claims.32

B. Every Claim Need Not Be Addressed in Unenforceability Evaluations and Opinions As discussed in Chapter 10, a patent that is unenforceable (e.g., for fraud on the Patent Office due to a material misrepresentation to even a single claim) is unenforceable as to every claim.33 Therefore, an unenforceability evaluation and opinion need only construe and consider the claimed subject matter to which the potential unenforceability applies.

C. Potential Weaknesses of Unenforceability Evaluations and Opinions As discussed in detail in Chapter 10, opinions of patent unenforceability are subject to a number of limitations and special considerations that do not

29. E.g., Li Second Family L.P. v. Toshiba Corp., 231 F.3d 1373, 1380 (Fed. Cir. 2000); Minn. Mining, 976 F.2d at 1569. 30. E.g., Li Second Family, 231 F.3d at 1380; Minn. Mining, 976 F.2d at 1569. 31. Kemin Foods, L.C. v. Pigmentos Vegetales Del Centro S.A. De C.V., 464 F.3d 1339, 1346 (Fed. Cir. 2006); Hoffmann-La Roche, Inc. v. Promega Corp., 323 F.3d 1354, 1372 (Fed. Cir. 2003). 32. See Chapter 10; e.g., Kemin Foods, 464 F.3d at 1346; Hoffmann-La Roche, 323 F.3d at 1372. 33. E.g., PerSeptive Biosystems, Inc. v. Pharmacia Biotech, Inc., 225 F.3d 1315, 1322 (Fed. Cir. 2000).


apply to opinions of patent noninfringement and invalidity. For example, proof of inequitable conduct requires proving knowledge and intent on the part of the patentee to commit fraud on the Patent Office.34 In the context of patent prosecution, this includes showing that the patentee intentionally misrepresented or omitted a fact that would have been material to patentability.35 Patent unenforceability is generally difficult to show with reasonable certainty in the context of evaluations and opinions because certain elements necessary to proving unenforceability (such as knowledge and intent on the part of a patentee to defraud the Patent Office) are difficult to demonstrate without access to litigation-related discovery. For example, knowledge in the context of inequitable conduct cannot be presumed, and subjective knowledge must be proven.36 Frequently, the evidence necessary to prove intent is not available outside of discovery within the context of patent litigation. Additionally (as also discussed in Chapter 10), in certain limited situations, inequitable conduct and patent misuse can be “cured.”37 For these reasons, inequitable conduct rarely forms the basis for an opinion if, for example, the opinion is to be used to counter a charge of willful infringement. More typically, patent unenforceability might be raised in a patent noninfringement or invalidity evaluation or opinion as a possible additional issue to be explored should infringement litigation ensue on the subject patent.

D. Potential Unenforceability Issues Issues to investigate when evaluating a patent for potential unenforceability include whether prior art from related cases having similar claims (including art cited in related non-U.S. applications) was cited in the subject patent application, and whether related, co-pending U.S. patent applications (including Office Actions in related applications concerning similar claimed subject matter) were brought to the attention of the Examiner. Other sources of information that may be material (and, therefore, should be checked for citation to the Patent Office in the patent of interest) include litigation related to the claimed subject matter (in both the United States and abroad) and data related to the invention submitted to the FDA or published, especially negative data.

34. E.g., Kimberly-Clark v. Johnson & Johnson, 745 F.2d 1437, 1450 (Fed. Cir. 1984); Dayco Prods. v. Total Containment, Inc., 329 F.3d 1358, 1363 (Fed. Cir. 2003). 35. See Chapter 10; e.g., Kimberly-Clark, 745 F.2d at 1450; Dayco, 329 F.3d at 1363. 36. E.g., Kimberly-Clark, 745 F.2d at 1450. 37. See Chapter 10; e.g., Rohm & Haas Co. v. Crystal Chemical Co., 722 F.2d 1556, 1572 (Fed. Cir. 1983).

Practice Points

Other evidence that may lead to a patent being held unenforceable for inequitable conduct includes intentional omission of co-inventors, failure to disclose issued patents to standards-setting organizations, declarations submitted that provide false or misleading data, failure to properly disclose the relationship between a declarant and an applicant, and intentionally incorrect use of past tense in describing prophetic examples.

E. Limiting Liability Because of the difficulties in opining that a patent is unenforceable due to inequitable conduct (as briefly mentioned above and discussed in detail in Chapter 10), it is typically not advisable to issue opinions of unenforceability (at least not as the sole issue) when those opinions may be relied upon by the client as a defense to willful infringement.

F. Reporting Considerations Evaluations and opinions on patent unenforceability need not and preferably do not contain absolute determinations and opinions. As discussed throughout this treatise, U.S. patent law is complex and constantly evolving, and evaluations and opinions of inequitable conduct (indeed, even more so than for validity and noninfringement) are necessarily based on facts that rarely allow one to conclude issues with certainty. The Federal Circuit Court of Appeals has recognized that “[a]n opinion of counsel, of course, need not unequivocally state that the client will not be held liable for infringement. An honest opinion is more likely to speak of probabilities than certainties.”38

VII. Practice Points A. Be Aware of Necessary Limitations on Any Patent Clearance Evaluation or Opinion and Expressly Include These in Writing A key and critical aspect of every patent clearance evaluation and opinion is searching for third party patents that might be infringed by the client’s

38. Read Corp. v. Portec, Inc., 970 F.2d 816, 829 n.9 (Fed. Cir. 1992).

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proposed technology. Therefore, proper, competent, and thorough searching is critical to patent clearance evaluations and opinions—and must be done. However, there are inherent weaknesses in searching, such that no clearance evaluation or opinion should ever assert or guarantee that the search results reflect every possible third party patent that might potentially affect the client’s proposed technology. Well-drafted patent clearance evaluations and opinions expressly state, in writing, the limitations inherent in searching for third party patents and indicate that the evaluation or opinion cannot guarantee that every third party patent that might affect the client’s proposed technology has been identified. Further, well-drafted patent clearance evaluations and opinions state, in writing, the exact scope of the technology understood to be the client’s proposed technology and used for the searching and evaluating, and further state that the evaluation or opinion does not extend to any other subject matter.

B. Use the Term Clearance Evaluations and Opinions, Not Freedom to Operate Because (as discussed immediately above) all well-drafted patent clearance evaluations and opinions should be strictly and expressly limited (including never guaranteeing that all potential third party patents of interest have been located and addressed), a good practice is to refer to these works as clearance evaluations and opinions rather than freedom to operate evaluations and opinions. The term freedom to operate is sometimes used in the art to refer to patent clearance evaluations and opinions. However, use of this term should be avoided because it may create the impression that the evaluation and opinion is less limited in scope than, in fact, it is. Indeed, the term freedom to operate may even imply an evaluation and opinion that a client may operate a proposed technology free from any possible third party patent issues. A patent clearance evaluation or opinion should never assert that this is the case.

C. Third Party Patent Searching Is Critical in Patent Clearance Evaluations and Opinions Generally, the most important issue in patent clearance evaluations and opinions is searching for third party U.S. patents that might be infringed by a client’s proposed technology. Therefore, this aspect of these evaluations and opinions must be executed with the utmost diligence and care.

Practice Points

1. Accurately Understand and Confirm with the Client in Writing the Client’s Proposed Technology A critical aspect of searching for third party patents in clearance evaluations and opinions is to be certain that the attorneys and agencies executing the searching understand, in detail, the client’s proposed technology on which the clearance evaluation and opinion is based. The best way to assure this is to confirm with the client in writing before any searching begins that the attorneys’ understanding of the technology to be evaluated and opined upon is complete and correct. Then, this exact same definition should be included in final written reporting, and (as discussed above) the final report should be expressly limited to the technology as expressly defined. 2. Use Multiple Independent Search Agencies and Perform an Independent Search Because of the importance of searching to patent clearance evaluations and opinions, two or more outside search agencies should be used to search for third party patents. Further, the attorneys conducting the clearance evaluation or opinion should also conduct their own independent search. Still further, each independent search should be a full and complete search. A good practice is to avoid parsing the search into subsections of the client’s proposed technology and, instead, have each agency search for the complete scope of the client’s proposed technology. This form of searching creates intentional redundancy of results that serves to guide the attorneys conducting the search as to its thoroughness. For example, if each independent search retrieves essentially the same third party patents, the evaluating and opining attorneys may conclude that the searches were as complete as possible and that the search results are probably within the unavoidable errors inherent in searching. On the other hand, disparate search results indicate that further searching is required until the results are sufficiently redundant. 3. Provide All Search Agencies with Identical, Detailed, and Focused Descriptions of the Proposed Technology and Related Materials Each search agency should be given the description of the client’s proposed technology as discussed above. Additionally, the agencies should be given as much focused information as possible to enhance their searching. This includes, for example, known prior art within the field of the search, as well as the names of individuals and companies known or believed to be active within

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the field of the search. Additional information that might be helpful includes any patents or patent applications that the client may have in the proposed technology and prior art (both U.S. and non-U.S.) that may have been cited against such patents and applications, either in the U.S. Patent Office or in non-U.S. patent offices.

D. Claim Construction Must Be Done for Virtually Every Noninfringement, Invalidity, and Unenforceability Evaluation and Opinion Claim construction must be performed for virtually any patent noninfringement, invalidity, or unenforceability evaluation or opinion. (Claim construction is discussed briefly above and in detail in Chapter 2.) A patent’s claims are construed by evaluating the ordinary meaning of the terms to one of skill in the pertinent art. Then, this meaning is viewed taking into consideration whether any special definition may have been given to the terms by the patent’s specification, other claims, or its prosecution history in the U.S. Patent Office, including prior art cited in the prosecution history or patent (the patent’s “intrinsic evidence”). In construing claims, all of the intrinsic evidence must be evaluated. This includes the complete prosecution history of the patent, which can include the prosecution histories of related patent applications, including those filed before (e.g., parent applications), with (e.g., sibling applications), or even after (e.g., child applications) the application that issued as the subject patent. The Federal Circuit has held that noninfringement and invalidity opinions that do not properly construe a patent’s claims may not be competent for purposes of avoiding willful infringement. Therefore, complete and proper claim construction is essential for all patent noninfringement, invalidity, and unenforceability evaluations and opinions. This includes in all cases a review of all of the intrinsic evidence, including the prosecution histories of every patent application that may be related to the patent at issue. For example, it is not acceptable to attempt to cut costs or save time by not obtaining and reviewing all relevant prosecution histories.

E. Level of Certainty of Reporting U.S. courts and well-informed clients understand that because of the inherent uncertainties in evaluating and opining on patent clearance, noninfringement, invalidity, and unenforceability (including inherent uncertainties in facts, law, and searching capabilities), these evaluations and opinions are

Practice Points

virtually never entirely certain. Therefore, competent opinions of patent clearance, noninfringement, invalidity, or unenforceability are “more likely [than not] to speak of probabilities than certainties.”39

F. Noninfringement Evaluations and Opinions Require a Clear, Definite Description of the Client’s Proposed Technology and Should Be Expressly Limited to This Subject Matter For patent noninfringement evaluations and opinions, it is critical that the attorneys performing the analysis have a clear and complete understanding and description of the client’s proposed technology. It is equally important that evaluations and opinions of noninfringement explicitly recite the exact description of the subject matter upon which the evaluation or opinion is based, and expressly limit, in writing, all conclusions to the recited subject matter. It is also important that patent noninfringement evaluations and opinions clearly state that they are limited to the potentially infringing subject matter exactly as described and that they do not apply to any subject matter that deviates in any manner from that explicitly described.

G. Patent Noninfringement Evaluations and Opinions Must Consider Both Literal Infringement and Infringement Under the Doctrine of Equivalents, As Well As Indirect Infringement Competent patent noninfringement evaluations and opinions must consider both literal infringement and infringement under the doctrine of equivalents. Further, in addition to direct infringement, indirect infringement (such as inducement to infringe and contributory infringement) must also be considered.

39. Id.

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H. Special Considerations for Invalidity and Unenforceability Evaluations and Opinions Performed in Patent Due Diligence for an Acquiring Company When a patent invalidity or unenforceability evaluation or opinion is being conducted in the context of patent due diligence for an acquiring company, the project goal is to determine whether a patent that might be acquired is invalid or unenforceable. In such cases, searches for potentially invalidating prior art and examination of all possible forms of patent invalidity and unenforceability become critically important. 1. Searching for Potentially Invalidating Prior Art When conducting a patent noninfringement evaluation or opinion in performing patent due diligence for an acquiring company, searching for potentially invalidating prior art becomes of central importance. The considerations are similar to those discussed above for searching for third party patents in patent clearance evaluations and opinions. These include using at least two or more outside, independent search agencies as well as independent searching by the attorneys conducting the evaluation and opinion, and ensuring that the results of the searches are reported to the client in a manner that reflects the inherent uncertainties in searching. For example, the results should expressly note that it is not possible to represent or guarantee that all potentially invalidating prior art has been located. 2. All Forms of Patent Invalidity and Unenforceability Must Be Considered When evaluating and opining on patent invalidity or unenforceability for purposes of evaluating whether a patent is valid and enforceable in the context of patent due diligence for an acquiring company, it is essential that the patent be analyzed for every possible type of invalidity and unenforceability. This includes anticipation by printed publication, as well as other forms of invalidity such as other types of anticipation, obviousness, written description, best mode, enablement, and claim indefiniteness. For potential patent unenforceability, it includes an evaluation for potential inequitable conduct in procuring the patent in the U.S. Patent Office (including but not limited to knowing and intentional failure to cite material prior art or knowing and intentional submissions of false or misleading declarations, and improper use of prophetic examples). It also includes potential patent misuse, such as impermissibly extending an issued patent’s term by requiring royalty payments beyond the expiration of the patent.

Practice Points

I. Issues Unique to Patent Unenforceability Evaluations and Opinions Evaluations and opinions of patent unenforceability have a number of unique issues not found in evaluations and opinions of patents based on other issues such as invalidity or noninfringement. As discussed above, unenforceability of third party patents is generally difficult to prove with reasonable certainty in the context of evaluations and opinions because certain elements necessary to doing so, such as knowledge and intent on the part of a patentee to defraud the Patent Office, are difficult to demonstrate without access to litigation-related discovery. For example, knowledge in the context of inequitable conduct cannot be presumed; subjective knowledge must be proven.40 For these reasons, opinions of patent unenforceability rarely, if ever, should form the sole basis of an opinion as a defense against potential willful patent infringement.

40. E.g., Kimberly-Clark, 745 F.2d at 1450.

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CHAP T ER

13 Evaluating and Opining on Third Party Patent Rights Opinions for Avoiding Willful Infringement

I. Overview: The Evolving Landscape Regarding the Legal Necessity of Opinions for Avoidance of Willful Infringement

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II. Willful Infringement and Enhanced Damages

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A. 35 U.S.C. § 284, Second Paragraph

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B. The Read Factors

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C. Advice of Counsel

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III. Underwater Devices: Duty of Care, Negligence

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IV. In re Seagate: Objective Recklessness

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V. Post-Seagate Federal Circuit Decisions and the Role of Opinions

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VI. Qualcomm: Inducement, Specific Intent, and the Role of Seagate

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A. Inducement of Infringement Requires Proof of Specific Intent

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B. Seagate Does Not Apply to Inducement: Opinion of Counsel Is Relevant to Inducement of Infringement

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A. The Remaining Importance of Opinions of Counsel Post-Seagate

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B. Seagate Does Not Apply to Inducement of Infringement

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C. Conclusion: Opinions of Counsel Remain Important in All Cases of Potential Infringement

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476 Chapter 13 Evaluating and Opining on Third Party Patent Rights

Usage Note: This chapter covers opinions for avoidance of willful infringement. Other chapters of relevance to this topic include Chapters 23 (competency of opinions) and 24 (waiver of attorney-client privilege and work product immunity) as well as Chapters 2–10 (patent law principles including claim construction, patent infringement, patent validity, and patent enforceability).

I. Overview: The Evolving Landscape Regarding the Legal Necessity of Opinions for Avoidance of Willful Infringement The law regarding the role of opinions of counsel in avoiding willful infringement is undergoing dramatic changes. For example, in 2007 an en banc Federal Circuit case turned asunder long-standing and well-settled law on the use of opinions for avoiding willful infringement, only to have the implications of its ruling modified a year later by another Federal Circuit case. Prior to August 2007, the Federal Circuit precedent was clear that where a potential infringer has actual notice of another’s patent rights, he has an affirmative duty to exercise due care to determine whether or not he is infringing. See Milgo Electronic Corp. v. United Business Communications, Inc., 623 F.2d 645, 666 (10th Cir. 1980), cert. denied, 449 U.S. 1066, 66 L. Ed. 2d 610, 101 S. Ct. 794 (1980). Such an affirmative duty includes, inter alia, the duty to seek and obtain competent legal advice from counsel before the initiation of any possible infringing activity. See General Electric, supra, at 1073–74; Marvel Specialty Co. v. Bell Hosiery Mills, Inc., 386 F.2d 287 (4th Cir. 1967), cert. denied, 390 U.S. 1030, 20 L. Ed. 2d 286, 88 S. Ct. 1409 (1968).1

However, in In re Seagate, a unanimous en banc Federal Circuit overruled this long-standing precedent, holding: [T]he duty of care announced in Underwater Devices sets a lower threshold for willful infringement that is more akin to negligence. This standard fails to comport with the general understanding of willfulness in the civil context, Accordingly, we overrule the standard set out in Underwater Devices and hold that proof of willful infringement permitting enhanced damages requires at least a showing of objective recklessness. Because we abandon the affirmative duty of

1. Underwater Devices v. Morrison-Knudsen Co., 717 F.2d 1380, 1390 (Fed. Cir. 1983), overruled, In re Seagate Tech., LLC, 497 F.3d 1360, 1365 (Fed. Cir. 2007) (en banc).

Willful Infringement and Enhanced Damages due care, we also reemphasize that there is no affirmative obligation to obtain opinion of counsel.2

Then, just as the bar was adjusting to the Seagate sea change, the Federal Circuit held in Qualcomm that Seagate did not apply to inducement of infringement. Qualcomm’s argument essentially rests on the proposition that Seagate altered the standard for establishing the intent element of inducement. Qualcomm contends that because in Seagate we “abandon[ed] the affirmative duty of due care” to avoid infringement and “reemphasize[d] that there is no affirmative obligation to obtain opinion of counsel,” . . . that opinion-of-counsel evidence is no longer relevant in determining the intent of an alleged infringer in the inducement context. We disagree. Although Qualcomm is correct that there is no affirmative duty to seek opinion of counsel regarding infringement, . . . it is incorrect in arguing that Seagate altered the state of mind requirement for inducement. [A] lack of culpability for willful infringement does not compel a finding of non-infringement under an inducement theory. . . . Because opinion-of-counsel evidence, along with other factors, may reflect whether the accused infringer “knew or should have known” that its actions would cause another to directly infringe, we hold that such evidence remains relevant to the second prong of the intent analysis.3

The following section explains the enhanced damages allowed for willful infringement of patents and the historical development of opinions of counsel as a defense against willful infringement. Detailed discussions of the current state of the law as set forth in Seagate and Qualcomm follow.

II. Willful Infringement and Enhanced Damages Direct patent infringement4 is a strict liability offense in which the state of mind of the infringer is immaterial.5 However, the accused infringer’s state of

2. Seagate, 497 F.3d at 1371 (emphasis added). 3. Broadcom Corp. v. Qualcomm, Inc., 543 F.3d 683, 699 (Fed. Cir. 2008) (citations omitted, bracketing in original, emphasis added). 4. Direct infringement is the infringement of a patent’s claims by one entity; it is codified at 35 U.S.C. § 271(a). Direct infringement differs from indirect infringement (such as inducement of infringement by another), which is codified under 35 U.S.C. § 271(b) and discussed in Chapter 5. 5. E.g., Seagate, 497 F.3d at 1368 (“[P]atent infringement is a strict liability offense. . . .”).

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mind becomes important when direct infringement is proven and a court is considering whether to award enhanced damages for willful infringement.6

A. 35 U.S.C. § 284, Second Paragraph U.S. patent statute 35 U.S.C. § 284, second paragraph, provides for the possibility of a court awarding a patent owner enhanced damages when a valid claim of a patent has been infringed. The statute states that “the court may increase the damages up to three times the amount found or assessed.”7 Unfortunately, this is all that the patent statutes have to say about enhanced damages. However, as explained by the Federal Circuit in Seagate, U.S. courts have fashioned detailed tests for determining when to award enhanced damages under Section 284, historically using “willful infringement” as the touchstone for awarding enhanced damages. Although a trial court’s discretion in awarding enhanced damages has a long lineage in patent law, the current statute, similar to its predecessors, is devoid of any standard for awarding them. Absent a statutory guide, we have held that an award of enhanced damages requires a showing of willful infringement. This well-established standard accords with Supreme Court precedent. See Aro Mfg. Co. v. Convertible Top Replacement Co., 377 U.S. 479, 508, 84 S. Ct. 1526, 12 L. Ed. 2d 457, 1964 Dec. Comm’r Pat. 760 (1961) (enhanced damages were available for willful or bad faith infringement); see also Dowling v. United States, 473 U.S. 207, 227 n.19, 105 S. Ct. 3127, 87 L. Ed. 2d 152 (1985) (enhanced damages are available for “willful infringement”); Seymour v. McCormick, 57 U.S. 480, 489, 14 L. Ed. 1024 (1853) (“wanton or malicious” injury could result in exemplary damages). . . . This court fashioned a standard for evaluating willful infringement in Underwater Devices Inc. v. Morrison-Knudsen Co., 717 F.2d 1380, 1389–90 (Fed. Cir. 1983): “Where . . . a potential infringer has actual notice of another’s patent rights, he has an affirmative duty to exercise due care to determine whether or not he is infringing. Such an affirmative duty includes, inter alia, the duty to seek and obtain competent legal advice from counsel before the initiation of any possible infringing activity.” (citations omitted). This standard was announced shortly after the creation of the court, and at a time “when widespread disregard of patent rights was undermining the national innovation incentive.” Knorr-Bremse

6. Id. (“Because patent infringement is a strict liability offense, the nature of the offense is only relevant in determining whether enhanced damages are warranted.”). 7. 35 U.S.C.S. § 284, P 2 (2009).

Willful Infringement and Enhanced Damages Systeme Fuer Nutzfahrzeuge GmbH v. Dana Corp., 383 F.3d 1337, 1343 (Fed. Cir. 2004) (en banc).8

As further explained by the court: Over time, our cases evolved to evaluate willfulness and its duty of due care under the totality of the circumstances, and we enumerated factors informing the inquiry. E.g., Read Corp. v. Portec, Inc., 970 F.2d 816, 826–27 (Fed. Cir. 1992); Rolls-Royce Ltd. v. GTE Valeron Corp., 800 F.2d 1101, 1110 (Fed. Cir. 1986).9

B. The Read Factors In Read Corp. v. Portec, the Federal Circuit emphasized that willful infringement is to be determined by evaluating the “defendant’s conduct based on all of the facts and circumstances.”10 The Read court set forth nine factors to consider in determining whether an infringer’s conduct viewed under the totality of the circumstances was sufficiently willful to trigger enhanced damages under Section 284: (1) whether the infringer deliberately copied the ideas or design of another; (2) whether the infringer, when he knew of the other’s patent protection, investigated the scope of the patent and formed a good-faith belief that it was invalid or that it was not infringed[;] (3) the infringer’s behavior as a party to the litigation[;] (4) [d]efendant’s size and financial condition. St. Regis Paper Co. v. Winchester Carton Corp., 410 F. Supp. 1304, 1309 (D. Mass. 1976) (“Double damages [appropriate]. If defendant were the giant and plaintiff the small independent, I would make it treble. . . .”); Bott v. Four Star Corp., 229 USPQ 241, 254 (E.D. Mich. 1985) (“[a] threefold increase in damages would severely affect [defendant’s] financial condition.”), vacated and remanded for clarification of damage amount, 807, F.2d 1567, 807 F.2d 1567 (Fed. Cir. 1986); Lightwave Technologies, Inc. v. Corning Glass Works, 19 USPQ2d 1838, 1849 (S.D.N.Y. 1991) (Defendant “can withstand some increase in damages, but not treble damages.”); Kori Corp. v. Wilco Marsh Buggies and Draglines, Inc., 561 F. Supp. 512, 533 (E.D. La. 1982) (Exemplary damages “should not unduly prejudice the defendants’ non-infringing business.”), aff ’d, 761 F.2d 649 (Fed. Cir.), cert. denied, 474 U.S. 902, 88 L. Ed. 2d 229, 106 S. Ct. 230 (1985)[;]

8. Seagate, 497 F.3d at 1368–69 (some citations omitted). 9. Id. at 1369. 10. Read Corp. v. Portec, Inc., 970 F.2d 816, 826 (Fed. Cir. 1992).

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Chapter 13 Evaluating and Opining on Third Party Patent Rights (5) [c]loseness of the case. Modine Mfg. Co. v. The Allen Group, 917 F.2d at 543 (No abuse of discretion to award no enhanced damages on the ground that willfulness was “sufficiently close on the evidence.”); Crucible, Inc. v. Stora Kopparbergs Bergslags AB, 701 F. Supp. 1157, 1164 (W.D. Pa. 1988) (“Because the court still considers the [willfulness] question to be a close one . . . double, and not treble damages are appropriate.”)[;] (6) [d]uration of defendant’s misconduct. Bott v. Four Star Corp., 229 USPQ 241, 255 (E.D. Mich. 1985) (For sales prior to the appellate court’s affirmance of the liability judgment, damages increased by 20%; for sales after the affirmance, damages doubled.), vacated and remanded for clarification of damage amount, 807 F.2d 1567 (Fed. Cir. 1986)[;] (7) [r]emedial action by the defendant. Intra Corp. v. Hamar Laser Instruments, Inc., 662 F. Supp. 1420, 1439, 4 (E.D. Mich. 1987) (Damages only doubled because defendant “voluntarily ceased manufacture and sale of infringing systems during the pendency of this litigation. . . .”), aff ’d without opinion, 862 F.2d 320 (Fed. Cir. 1988), cert. denied, 490 U.S. 1021 (1989)[;] (8) [d]efendant’s motivation for harm. American Safety Table Co. v. Schreiber, 415 F.2d 373, 379 (2d Cir. 1969) (“Defendants’ infringing acts, although deliberate and with knowledge of plaintiff ’s rights, could not be termed pernicious due to prevailing ‘economic pressure in the form of customer dissatisfaction.’”), cert. denied, 396 U.S. 1038, 24 L. Ed. 2d 682, 90 S. Ct. 683 (1970)[; and] (9) whether defendant attempted to conceal its misconduct. Russell Box Co. v. Grant Paper Box Co., 203 F.2d 177, 183 (1st Cir.) (Enhanced damages supported in part by findings “that the defendant had failed to preserve its records and had failed to cooperate as it should at the trial on the issue of damages.”), cert. denied, 346 U.S. 821, 98 L. Ed. 347, 74 S. Ct. 37.11

C. Advice of Counsel In determining willfulness, courts began to consider closely whether an infringer had consulted and reasonably relied upon an objective and competent opinion by patent counsel of noninfringement and/or invalidity of the infringed patent. Reliance on a competent opinion of noninfringement and/ or patent invalidity may be used by the infringer as evidence of good faith to negate a finding of willful infringement. As explained by the Seagate court: In light of the duty of due care, accused willful infringers commonly assert an advice of counsel defense. Under this defense, an accused willful infringer aims to establish that due to reasonable reliance on advice from counsel, its continued accused activities were done in good faith. Typically, counsel’s opinion

11. Id. at 827 (some citations omitted).

Willful Infringement and Enhanced Damages concludes that the patent is invalid, unenforceable, and/or not infringed. Although an infringer’s reliance on favorable advice of counsel, or conversely his failure to proffer any favorable advice, is not dispositive of the willfulness inquiry, it is crucial to the analysis. E.g., Electro Med. Sys., S.A. v. Cooper Life Scis., Inc., 34 F.3d 1048, 1056 (Fed. Cir. 1994) (“Possession of a favorable opinion of counsel is not essential to avoid a willfulness determination; it is only one factor to be considered, albeit an important one”).12

However, and as examined in more detail in Chapter 24 (waiver of attorneyclient privilege and work product immunity), reliance on opinions of counsel in situations involving potential willful infringement has raised a host of issues. These include waiver of the attorney-client privilege and work-product immunity pertaining to the opinion, as well as the adverse inferences that may be drawn when an infringer has an opinion but does not produce it in court. When a defendant has been found to infringe a patent and is facing charges of willful infringement, if the defendant has an opinion of counsel of noninfringement and/or invalidity, the infringer may rely on this opinion as evidence of lack of willfulness. However, as discussed in Chapter 24, attorney opinions generally are protected by attorney-client privilege and work product immunity. Reliance on an opinion of counsel as evidence of nonwillfulness generally results in waiver of at least the attorney-client privilege associated with the opinion. Therefore, a patent infringer having an opinion and facing a charge of willful infringement often must decide between relying on the opinion and waiving privilege or not relying on the opinion and retaining the privileges associated with the opinion. Following Underwater Devices, a line of Federal Circuit cases arose that held that an adverse inference could be drawn by a court where an infringer “has not even asserted that it sought advice of counsel when notified of the allowed claims and [the patentee’s] warning, or at any time before it began this litigation,” and a infringer’s “silence on the subject, in alleged reliance on the attorney-client privilege, would warrant the conclusion that it either obtained no advice of counsel or did so and was advised that its importation and sale of the accused products would be an infringement of valid U.S. patents.”13 The Federal Circuit developed a general rule allowing adverse inferences in such cases: “[A] court must be free to infer that either no opinion was obtained or, if an opinion were obtained, it was contrary to the infringer’s desire to initiate or continue its use of the patentee’s invention.”14

12. Seagate, 497 F.3d at 1369. 13. Kloster Speedsteel AB v. Crucible Inc., 793 F.2d 1565, 1580 (Fed. Cir. 1986), overruled, KnorrBremse Systeme Fuer Nutzfahrzeuge GmbH v. Dana Corp., 383 F.3d 1337 (Fed. Cir. 2004) (en banc). 14. Id.

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As noted by the Federal Circuit in its en banc Knorr-Bremse decision, the focus of these adverse inference cases “was not on attorney-client relationships, but on disrespect for law.”15 “However, implementation of this precedent has resulted in inappropriate burdens on the attorney-client relationship” by forcing infringers to rely on opinions of counsel and waive privilege or face an adverse inference.16 As explained by the Seagate court: Since Underwater Devices, we have recognized the practical concerns stemming from our willfulness doctrine, particularly as related to the attorney-client privilege and work product doctrine. For instance, Quantum Corp. v. Tandon Corp., 940 F.2d 642, 643 (Fed. Cir. 1991), observed that “[p]roper resolution of the dilemma of an accused infringer who must choose between the lawful assertion of the attorney-client privilege and avoidance of a willfulness finding if infringement is found, is of great importance not only to the parties but to the fundamental values sought to be preserved by the attorney-client privilege.” We cautioned there that an accused infringer “should not, without the trial court’s careful consideration, be forced to choose between waiving the privilege in order to protect itself from a willfulness finding, in which case it may risk prejudicing itself on the question of liability, and maintaining the privilege, in which case it may risk being found to be a willful infringer if liability is found.” Id. at 643–44. We advised that in camera review and bifurcating trials in appropriate cases would alleviate these concerns. Id. However, such procedures are often considered too onerous to be regularly employed.17

Therefore, in order to address the adverse inference cases, the Federal Circuit’s en banc Knorr-Bremse case answered three specific questions, effectively doing away with adverse inferences in the context of opinions and willful infringement: QUESTION 1 When the attorney-client privilege and/or work-product privilege is invoked by a defendant in an infringement suit, is it appropriate for the trier of fact to draw an adverse inference with respect to willful infringement? The answer is “no.” Although the duty to respect the law is undiminished, no adverse inference shall arise from invocation of the attorney-client and/or work product privilege. . . . We now hold that [the rule of no adverse inferences in non-patent cases] applies to the same extent in patent cases as in other areas of law. A defendant

15. Knorr-Bremse, 383 F.3d at 1343. 16. Id. 17. Seagate, 497 F.3d at 1369–70.

Willful Infringement and Enhanced Damages may of course choose to waive the privilege and produce the advice of counsel. However, the assertion of attorney-client and/or work-product privilege and the withholding of the advice of counsel shall no longer entail an adverse inference as to the nature of the advice. . . . QUESTION 2 When the defendant had not obtained legal advice, is it appropriate to draw an adverse inference with respect to willful infringement? The answer, again, is “no.” The issue here is not of privilege, but whether there is a legal duty upon a potential infringer to consult with counsel, such that failure to do so will provide an inference or evidentiary presumption that such opinion would have been negative. . . . [T]he failure to obtain an exculpatory opinion of counsel shall no longer provide an adverse inference or evidentiary presumption that such an opinion would have been unfavorable. . . . [QUESTION 3] Should the existence of a substantial defense to infringement be sufficient to defeat liability for willful infringement even if no legal advice has been secured? The answer is “no.” Precedent includes this factor with others to be considered among the totality of circumstances, stressing the “theme of whether a prudent person would have sound reason to believe that the patent was not infringed or was invalid or unenforceable, and would be so held if litigated,” SRI Int’l v. Advanced Tech. Lab., 127 F.3d 1462, 1465 (Fed. Cir. 1997). However, precedent also authorizes the trier of fact to accord each factor the weight warranted by its strength in the particular case. We deem this approach preferable to abstracting any factor for per se treatment, for this greater flexibility enables the trier of fact to fit the decision to all of the circumstances. We thus decline to adopt a per se rule.18

The Seagate court succinctly summarized these holdings of Knorr-Bremse as follows: Recently, in Knorr-Bremse, we addressed another outgrowth of our willfulness doctrine. Over the years, we had held that an accused infringer’s failure to produce advice from counsel “would warrant the conclusion that it either obtained no advice of counsel or did so and was advised that its [activities] would be an infringement of valid U.S. Patents.” Knorr-Bremse, 383 F.3d at 1343 (quoting Kloster Speedsteel AB v. Crucible Inc., 793 F.2d 1565, 1580 (Fed. Cir. 1986)). Recognizing that this inference imposed “inappropriate burdens on the attorney-client relationship,” id., we held that invoking the attorney-client privilege

18. Knorr-Bremse, 383 F.3d at 1344–47.

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484 Chapter 13 Evaluating and Opining on Third Party Patent Rights or work product protection does not give rise to an adverse inference, id. at 1344–45. We further held that an accused infringer’s failure to obtain legal advice does not give rise to an adverse inference with respect to willfulness. Id. at 1345–46.19

III. Underwater Devices: Duty of Care, Negligence While expressly overruled by Seagate,20 Underwater Devices nonetheless is an important case to understand in the context of willful infringement. In Underwater Devices, the Federal Circuit held that where a potential infringer has actual notice of another’s patent rights, he has an affirmative duty to exercise due care to determine whether or not he is infringing. See Milgo Electronic Corp. v. United Business Communications, Inc., 623 F.2d 645, 666 (10th Cir. 1980), cert. denied, 449 U.S. 1066, 66 L. Ed. 2d 610, 101 S. Ct. 794 (1980). Such an affirmative duty includes, inter alia, the duty to seek and obtain competent legal advice from counsel before the initiation of any possible infringing activity. See General Electric, supra, at 1073–74; Marvel Specialty Co. v. Bell Hosiery Mills, Inc., 386 F.2d 287 (4th Cir. 1967), cert. denied, 390 U.S. 1030, 20 L. Ed. 2d 286, 88 S. Ct. 1409 (1968).21

The Seagate court explained that the Underwater Devices view of willfulness was announced shortly after the creation of the court, and at a time “when widespread disregard of patent rights was undermining the national innovation incentive.” KnorrBremse Systeme Fuer Nutzfahrzeuge GmbH v. Dana Corp., 383 F.3d 1337, 1343 (Fed. Cir. 2004) (en banc) (citing Advisory Committee on Industrial Innovation Final Report, Dep’t of Commerce (Sep. 1979)). Indeed, in Underwater Devices, an attorney had advised the infringer that “[c]ourts, in recent years, have—in patent infringement cases—found [asserted patents] invalid in approximately 80% of the cases,” and on that basis the attorney concluded that the patentee would not likely sue for infringement. 717 F.2d at 1385.22

19. Seagate, 497 F.3d at 1369–70. 20. Id. at 1365. 21. Underwater Devices v. Morrison-Knudsen Co., 717 F.2d 1380, 1390 (Fed. Cir. 1983), overruled, Seagate, 497 F.3d at 1365. 22. Seagate, 497 F.3d at 1369.

In re Seagate: Objective Recklessness 485

The Seagate court further explained that the Underwater Devices standard for willful infringement is “akin to negligence” as opposed to recklessness (which, as explained below, the Seagate court held is the proper standard for willful infringement).23

IV. In re Seagate: Objective Recklessness In In re Seagate, a unanimous en banc Federal Circuit expressly overruled Underwater Devices and held: [T]he duty of care announced in Underwater Devices sets a lower threshold for willful infringement that is more akin to negligence. This standard fails to comport with the general understanding of willfulness in the civil context, Accordingly, we overrule the standard set out in Underwater Devices and hold that proof of willful infringement permitting enhanced damages requires at least a showing of objective recklessness. Because we abandon the affirmative duty of due care, we also reemphasize that there is no affirmative obligation to obtain opinion of counsel.24

The court added: We fully recognize that “the term [reckless] is not self-defining.” Farmer v. Brennan, 511 U.S. 825, 836, 114 S. Ct. 1970, 128 L. Ed. 2d 811 (1994). However, “[t]he civil law generally calls a person reckless who acts . . . in the face of an unjustifiably high risk of harm that is either known or so obvious that it should be known.” Id. (citing Prosser and Keeton § 34, pp. 213–14; Restatement (Second) of Torts § 500 (1965)). Accordingly, to establish willful infringement, a patentee must show by clear and convincing evidence that the infringer acted despite an objectively high likelihood that its actions constituted infringement of a valid patent. See Safeco, 127 S. Ct. at 2215 (“It is [a] high risk of harm, objectively assessed, that is the essence of recklessness at common law.”). The state of mind of the accused infringer is not relevant to this objective inquiry. If this threshold objective standard is satisfied, the patentee must also demonstrate that this objectively-defined risk (determined by the record developed in the infringement proceeding) was either known or so obvious that it should have been known to the accused infringer. We leave it to future cases to further develop the application of this standard.25

23. Id. 24. Id. at 1371 (emphasis added). 25. Id. (emphasis added).

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Therefore, the proper test for determining willful infringement for awarding enhanced damages under 35 U.S.C. § 284, second paragraph, is whether a patentee can, “show by clear and convincing evidence that the infringer acted despite an objectively high likelihood that its actions constituted infringement of a valid patent,” and that, regardless of the actual state of mind of the infringer, the “objectively defined risk (determined by the record developed in the infringement proceeding) was either known or so obvious that it should have been known to the accused infringer.”26 Further, in determining objective willfulness, reliance by the infringer on an opinion of counsel is irrelevant as “[t]he state of mind of the accused infringer is not relevant to [the objective recklessness] inquiry.”27 Further, “if this threshold objective standard is satisfied, [and] the patentee [can] also demonstrate that this objectively-defined risk . . . was either known or so obvious that it should have been known to the accused infringer,”28 the infringement was willful and the court may award enhanced damages.

V. Post-Seagate Federal Circuit Decisions and the Role of Opinions At least two Federal Circuit decisions issued after Seagate indicate that it remains advisable for potential infringers to obtain competent opinions of patent counsel of noninfringement and/or invalidity in order to avoid willful infringement. In each case, the Federal Circuit found that an infringer obtaining and relying on a competent opinion of noninfringement and/or invalidity of the infringed patent was evidence that the infringement was not reckless under the new Seagate standard of willfulness. In Finisar Corp. v. DirecTV Group, Inc., the Federal Circuit found that a competent opinion of counsel “concluding either that DirecTV did not infringe the ’505 patent or that it was invalid would provide a sufficient basis for DirecTV to proceed without engaging in objectively reckless behavior with respect to the ’505 patent.”29 In particular, the court stated: In In re Seagate Technology, LLC, 497 F.3d 1360, 1371 (Fed. Cir. 2007) (en banc), this court held that “proof of willful infringement permitting enhanced damages requires at least a showing of objective recklessness.” Moreover this court imposes “no affirmative obligation to obtain opinion of counsel.” Id.

26. 27. 28. 29.

Id. Id. Id. Finisar Corp. v. DirecTV Group, Inc., 523 F.3d 1323, 1339 (Fed. Cir. 2008).

Post-Seagate Federal Circuit Decisions and the Role of Opinions DirecTV obtained an opinion of counsel, which concluded that DirecTV did not infringe the ’505 patent, but took no position on validity. Based on that opinion, DirecTV proceeded to practice its system. The district court faulted DirecTV in part for not obtaining an opinion on validity, weighing its failure to do so in Finisar’s favor on the question of willfulness. But the ’505 patent would only have been a problem for DirecTV if DirecTV infringed it and it was valid. See Graco, Inc. v. Binks Mfg. Co., 60 F.3d 785, 793 (Fed. Cir. 1995) (“There is no requirement that an opinion must address validity to negate a finding of willful infringement.”) (citation omitted) (emphasis in original). Thus a competent opinion of counsel concluding either that DirecTV did not infringe the ’505 patent or that it was invalid would provide a sufficient basis for DirecTV to proceed without engaging in objectively reckless behavior with respect to the ’505 patent.30

In Lexion Med., LLC v. Northgate Techs., Inc., the Federal Circuit held, “[w]e do not think it was objectively reckless for Northgate to obtain and rely on the opinion of counsel. . . .”31 The court stated: On appeal, Lexion contends that the district court clearly erred in finding that Northgate’s post-verdict sales did not constitute willful infringement. We disagree with Lexion, and affirm the district court’s determination of no willful infringement. Under our decision in In re Seagate Tech., LLC, 497 F.3d 1360 (Fed. Cir. 2007), proof of willful infringement requires at least a showing of objective recklessness, id. at 1371. We do not think it was objectively reckless for Northgate to obtain and rely on the opinion of counsel, which had predicted a favorable outcome in view of the renewed motion for JMOL then pending before the district court. Although the district court ultimately denied that motion, Northgate’s reliance on that opinion was nonetheless justified, as we have vacated the judgment of infringement and remanded for further proceedings based upon our new claim construction.32

Therefore, despite the change in law created by Seagate, opinions of counsel of noninfringement and/or invalidity appear to remain important in avoiding willful infringement findings and enhanced damages. Although Seagate held that there is no longer an affirmative obligation for a potential infringer to obtain a noninfringement and/or invalidity opinion, and that the lack of such an opinion cannot be used to create an adverse inference, Federal Circuit cases following Seagate have clearly held that the an infringer obtaining and

30. Id. (emphasis added). 31. Lexion Med., LLC v. Northgate Techs., Inc., 292 Fed. Appx. 42, 51 (Fed. Cir. 2008) (unpublished). 32. Id. (emphasis added).

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relying on a noninfringement and/or invalidity opinion may provide sufficient evidence for the infringer to avoid willfulness under the objective recklessness standard of Seagate.

VI. Qualcomm: Inducement, Specific Intent, and the Role of Seagate Seagate applies to direct infringement. About one year after it was decided, the Federal Circuit held in Qualcomm that Seagate does not apply to the indirect infringement of inducement to infringe under 35 U.S.C. § 271(b).33

A. Inducement of Infringement Requires Proof of Specific Intent As discussed in Chapter 5, inducement of infringement under 35 U.S.C. § 271(b) is a form of indirect infringement. Unlike direct infringement, which is a strict liability offense in which the state of mind of the infringer is immaterial except for possible willful infringement, inducement to infringe is a specific intent offense and requires proof that the accused infringer possessed the specific intent to encourage another’s infringement. As explained by the Qualcomm court: “In order to prevail on an inducement claim, the patentee must establish ‘first that there has been direct infringement, and second that the alleged infringer knowingly induced infringement and possessed specific intent to encourage another’s infringement.’ ” ACCO Brands, Inc. v. ABA Locks Mfr. Co., 501 F.3d 1307, 1312 (Fed. Cir. 2007) (quoting Minn. Mining & Mfg. Co. v. Chemque, Inc., 303 F.3d 1294, 1304–05 (Fed. Cir. 2002)).34

As also explained in Qualcomm: The relevant standard for establishing the intent element of inducement was clarified by this Court in DSU, 471 F.3d at 1304–06 (en banc in relevant part). In DSU, we upheld a jury instruction providing that “[t]he defendant must have intended to cause the acts that constitute the direct infringement and must have known or should have known tha[t] its action would cause the direct infringement.” Id. at 1305. In so doing, we held that “inducement requires evidence of

33. Broadcom Corp. v. Qualcomm, Inc., 543 F.3d 683 (Fed. Cir. 2008); 35 U.S.C.S. § 271(b) (2009). 34. Id. at 697 (emphasis added).

Qualcomm: Inducement, Specific Intent, and the Role of Seagate culpable conduct, directed to encouraging another’s infringement, not merely that the inducer had knowledge of the direct infringer’s activities.” Id. at 1306 (citing Metro-Goldwyn-Mayer Studios, Inc. v. Grokster, Ltd., 545 U.S. 913, 936–37, 125 S. Ct. 2764, 162 L. Ed. 2d 781 (2005)). We further noted that “[t]he plaintiff has the burden of showing that the alleged infringer’s actions induced infringing acts and that he knew or should have known his actions would induce actual infringements.” DSU, 471 F.3d at 1306 (quoting Manville Sales Corp. v. Paramount Sys., Inc., 917 F.2d 544, 553 (Fed. Cir. 1990)).35

B. Seagate Does Not Apply to Inducement: Opinion of Counsel Is Relevant to Inducement of Infringement Because of the importance of proving the state of mind of the infringer (i.e., specific intent) for proving inducement of infringement, the Federal Circuit in Qualcomm refused to apply the holding of Seagate to inducement of infringement.36 In particular, the Federal Circuit held that when inducement is at issue, reliance by an accused infringer on an opinion of counsel of noninfringement and/or invalidity should be considered as part of the totality of the circumstances in determining whether the accused infringer possessed the requisite specific intent to induce the infringement by another. As stated by the court: Qualcomm argues, however, that the district court erred in allowing the inducement verdicts to stand in light of its instruction to consider failure to obtain an opinion of counsel as a factor in determining whether Qualcomm had the requisite level of intent to induce infringement of Broadcom’s patents. Qualcomm’s argument essentially rests on the proposition that Seagate altered the standard for establishing the intent element of inducement. Qualcomm contends that because in Seagate we “abandon[ed] the affirmative duty of due care” to avoid infringement and “reemphasize[d] that there is no affirmative obligation to obtain opinion of counsel,.” . . . That is, Qualcomm argues that opinion-of-counsel evidence is no longer relevant in determining the intent of an alleged infringer in the inducement context. We disagree.37

The court explained: Although Qualcomm is correct that there is no affirmative duty to seek opinion of counsel regarding infringement, and that it is improper to allow an “adverse

35. Id. at 697–98 (bracketing in original, emphasis added). 36. Id. at 699. 37. Id. at 698–99 (bracketing in original).

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490 Chapter 13 Evaluating and Opining on Third Party Patent Rights inference or evidentiary presumption that such an opinion would have been unfavorable,” Knorr-Bremse Systeme Fuer Nutzfahrzeuge GmbH, 383 F.3d 1337 at 1346, it is incorrect in arguing that Seagate altered the state of mind requirement for inducement. Our en banc holding in DSU remains the relevant authority on that point. [A] lack of culpability for willful infringement does not compel a finding of non-infringement under an inducement theory. . . . While inducement “requires more than just intent to cause the acts that produce direct infringement,” and also requires “that the alleged infringer knowingly induced infringement and possessed specific intent to encourage another’s infringement,” DSU, 471 F.3d at 1306, this intent may be established through circumstantial evidence, see Id. Moreover, “[t]he requisite intent to induce infringement may be inferred from all of the circumstances.” Water Techs. Corp. v. Calco, Ltd., 850 F.2d 660, 669 (Fed. Cir. 1988). Additionally, we noted in DSU that this intent may be established where an alleged infringer who “knew or should have known his actions would induce actual infringements,” is shown to have induced infringing acts through his actions. 471 F.3d at 1306 (emphasis added) (adopting the same two-part test articulated in Manville, 917 F.2d at 553).38

Referring specifically to the role of an opinion of counsel in proving inducement to infringe, the Qualcomm court concluded: [T]he “affirmative intent to cause direct infringement,” id., required by DSU may be shown—just as the jury was instructed in DSU itself—by establishing first that the defendant “intended to cause the acts that constitute the direct infringement,” and second that the defendant “kn[ew] or should have known [that] its action would cause the direct infringement,” DSU, 471 F.3d at 1305. Because opinion-of-counsel evidence, along with other factors, may reflect whether the accused infringer “knew or should have known” that its actions would cause another to directly infringe, we hold that such evidence remains relevant to the second prong of the intent analysis. Moreover, we disagree with Qualcomm’s argument and further hold that the failure to procure such an opinion may be probative of intent in this context. It would be manifestly unfair to allow opinion-of-counsel evidence to serve an exculpatory function, as was the case in DSU itself, see 471 F.3d at 1307, and yet not permit patentees to identify failures to procure such advice as circumstantial evidence of intent to infringe.39

38. Id. at 699 (bracketing in original). 39. Id. (bracketing in original, emphasis added).

Practice Points

VII. Practice Points A. The Remaining Importance of Opinions of Counsel Post-Seagate Seagate did not hold that opinions of counsel are not important in a court’s determination of whether infringement was willful under the objectively reckless standard and hence, whether enhanced damages may be awarded. Rather, Seagate held that there is no longer an affirmative obligation for a potential infringer to obtain a noninfringement and/or invalidity opinion, and that the lack of such an opinion cannot create an adverse inference. Immediately following Seagate, some commentators suggested that Seagate marked the end of the need for opinions of noninfringement and/or invalidity to avoid willful infringement. However, this is not how the Federal Circuit cases following Seagate have clearly held as they indicate that evidence of an infringer obtaining and relying on a competent opinion of noninfringement and/or invalidity can be sufficient for an infringer to avoid willfulness under the objective recklessness standard of Seagate.40 Therefore, following Seagate, the prudent potential infringer should continue to obtain and rely on competent noninfringement and/or invalidity opinions of counsel.

B. Seagate Does Not Apply to Inducement of Infringement It is important to remember that Seagate does not apply to inducement of infringement. Therefore, when inducement of infringement is possible, it is important that the potential infringer obtain and rely on a competent opinion of noninfringement and/or invalidity. It is also important to keep in mind that for inducement of infringement, courts may still draw an adverse inference from the failure of an infringer to rely on an opinion of counsel of patent noninfringement and/or invalidity.

C. Conclusion: Opinions of Counsel Remain Important in All Cases of Potential Infringement While the law of reliance on opinions of counsel to avoid willful infringement is changing, no cases have held that obtaining and relying on competent

40. Finisar Corp. v. DirecTV Group, Inc., 523 F.3d 1323, 1339 (Fed. Cir. 2008); Lexion Med., LLC v. Northgate Techs., Inc., 292 Fed. Appx. 42, 51 (Fed. Cir. 2008) (unpublished).

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opinions of noninfringement and/or invalidity is improper. In fact, all cases appear to be consistent with the long-held belief in the importance of obtaining and relying on these opinions whenever patent infringement is a possibility. Therefore, to guard against enhanced damages for patent infringement, prudent patent counsel should continue to advise clients to obtain and rely on opinions of noninfringement and/or invalidity—and prudent businesspeople should continue to acquire and rely on such opinions.

CHAP T ER

14 Evaluating and Opining on Third Party Patent Rights Prefiling Rule 11 and Section 285 Investigations in Declaratory Judgment Actions, ANDA Paragraph IV Certifications, Avoidance of Preliminary Injunctions, and Readiness in “Rocket Docket” Jurisdictions and ITC Investigations

I. Overview

495

II. Patent Evaluations and Opinions for Rule 11 and Section 285 Prefiling Investigations

495

A. Rule 11

495

B. Role of Patent Evaluations and Opinions in Rule 11 Sanctions

496

C. Section 285

501

D. Role of Patent Evaluations and/or Opinions in Section 285 Sanctions

502

III. Patent Evaluations and Opinions for ANDA Paragraph IV Certifications

504

A. Overview of the Hatch-Waxman Act

505

B. ANDA Paragraph IV Certification

507

C. Accountability for Proper ANDA Paragraph IV Certification

508

IV. Patent Evaluations and Opinions for Avoiding Preliminary Injunctions A. Assessing the Likelihood of Success on the Merits Requires an Infringement and Validity Analysis

493

515 516

494 Chapter 14 Evaluating and Opining on Third Party Patent Rights V. Patent Evaluations and Opinions for Readiness in “Rocket Docket” Jurisdictions and ITC Investigations

519

A. “Rocket Docket” Jurisdictions

519

B. ITC Patent Infringement Investigations

520

VI. Practice Points

521

A. Prefiling Infringement Evaluations and Opinions Should Be Done to Comply with Rule 11 and Section 285

521

B. ANDA Paragraph IV Certification Requires a Competent Noninfringement and/or Invalidity Evaluation and Opinion

522

C. A Noninfringement and/or Invalidity Opinion May Be Used to Avoid a Preliminary Injunction— But Try to Retain Separation of Opinion Counsel and Trial Counsel

522

D. Beware of, and Be Prepared for, “Rocket Docket” Jurisdictions and ITC Investigations

523

Patent Evaluations and Opinions for Rule 11 and Section 285 495

Usage Note: As discussed in this chapter, prefiling patent evaluations and opinions to avoid sanctions under Rule 11 and Section 825 require at least infringement analyses, including claim construction and application of construed claims to potentially infringing products or processes. Other chapters of relevance to this topic include Chapters 2–10 (patent law principles including claim construction, patent infringement, patent validity, and patent enforceability).

I. Overview Conducting a thorough evaluation, and if necessary opinion, of third party patents should be standard practice prior to challenging the validity and/or infringement of these patents. This will help to identify weaknesses in third patent rights as well as those in one’s case against them that will significantly strengthen a patent challenge and avoid pitfalls. Additionally, prior to filing a declaratory judgment action of noninfringement, it is necessary to at least conduct a patent infringement analysis, including claim construction and application of the construed claims to the potentially infringed product or process. This chapter discusses evaluating and opining on third party patents in the context of common challenges to them: declaratory judgment actions, defensive patent litigation in “rocket docket” and ITC jurisdictions, ANDA Paragraph IV certifications, and avoidance of preliminary injunctions in defensive patent litigation. Chapter 15 discusses evaluating and opining on third party patents in U.S. Patent Office post-grant challenges.

II. Patent Evaluations and Opinions for Rule 11 and Section 285 Prefiling Investigations In patent litigation, two separate rules provide sanctions for bad faith, frivolous litigation: Federal Rules of Civil Procedure Rule 11 (common to all federal lawsuits), and 35 U.S.C. § 285 (unique to patent litigation). While these rules are similar, there are differences as well. Importantly (as discussed below), prefiling evaluations and opinions as to patent infringement play a key role in a court’s determination of whether to apply sanctions under either rule.

A. Rule 11 As explained by the Federal Circuit in Q-Pharma: Rule 11(b) requires an attorney to conduct a reasonable inquiry into the law and facts before filing a pleading in a court and to certify that the claims contained

496 Chapter 14 Evaluating and Opining on Third Party Patent Rights therein are not frivolous, legally unreasonable, without factual foundation, or asserted for an improper purpose. Rule 11(c) then permits a district court to impose sanctions on a party and its attorneys for violation of subdivision (b). In the context of patent infringement actions, we have interpreted Rule 11 to require, at a minimum, that an attorney interpret the asserted patent claims and compare the accused device with those claims before filing a claim alleging infringement.1

As further explained by the court in Q-Pharma: In deciding issues not unique to our exclusive jurisdiction, we apply the law of the regional circuit in which the district court sits. See Midwest Indus., Inc. v. Karavan Trailers Inc., 175 F.3d 1356, 1359 (Fed. Cir. 1999) (en banc in relevant part). We therefore apply the law of the [relevant] Circuit to the question of sanctions under Rule 11. See Antonious v. Spalding & Evenflo Cos., 275 F.3d 1066, 1072 (Fed. Cir. 2002).2

Regarding the procedural aspects of Rule 11, Federal Circuit cases hold: Once a litigant moves based upon non-frivolous allegations for a Rule 11 sanction, the burden of proof shifts to the non-movant to show it made a reasonable pre-suit inquiry into its claim. View Eng’g, 208 F.3d at 986 (“In bringing a claim of infringement, the patent holder, if challenged, must be prepared to demonstrate to both the court and the alleged infringer exactly why it believed before filing the claim that it had a reasonable chance of proving infringement.”).3

B. Role of Patent Evaluations and Opinions in Rule 11 Sanctions The Federal Circuit “has construed Rule 11, in the context of patent infringement actions, to require that an attorney interpret the pertinent claims of the patent in issue before filing a complaint alleging patent infringement.”4 This standard has been reiterated by the Federal Circuit. For example: [S]anctions were warranted because the patentee had not performed any claim construction analysis or an infringement analysis prior to filing its counter-

1. Q-Pharma, Inc. v. Andrew Jergens Co., 360 F.3d 1295, 1300–1301 (Fed. Cir. 2004) (emphasis added); Antonious v. Spalding & Evenflo Cos., 275 F.3d 1066, 1072 (Fed. Cir. 2002); View Eng’g, Inc. v. Robotic Vision Sys., Inc., 208 F.3d 981, 986 (Fed. Cir. 2000); Judin v. United States, 110 F.3d 780, 784 (Fed. Cir. 1997); S. Bravo Sys., Inc. v. Containment Techs. Corp., 96 F.3d 1372, 1375 (Fed. Cir. 1996). 2. Q-Pharma 360 F.3d at 1299 (emphasis added); Digeo, Inc. v. Audible, Inc., 505 F.3d 1362, 1367–68 (Fed. Cir. 2007). 3. Digeo, 505 F.3d at 1368. 4. Antonious, 275 F.3d at 1072 (emphasis added); Judin, 110 F.3d at 784; S. Bravo, 96 F.3d at 1375.

Patent Evaluations and Opinions for Rule 11 and Section 285 497 claim for infringement. In fact, we emphasized that “the presence of an infringement analysis plays the key role in determining the reasonableness of the pre-filing inquiry made in a patent infringement case under Rule 11.”5

The court added: Again, our case law makes clear that the key factor in determining whether a patentee performed a reasonable pre-filing inquiry is the presence of an infringement analysis. View Eng’g, 208 F.3d at 986; see also Antonious, 275 F.3d at 1073–74; Judin, 110 F.3d at 784; S. Bravo Sys., 96 F.3d at 1375.6

Further, the court has held that: “Although the attorney may consult with the client, Rule 11 requires that the attorney not rely solely on the client’s claim interpretation, but instead perform an independent claim analysis.”7 As explained by the Federal Circuit: Before filing counterclaims of patent infringement, Rule 11, we think, must be interpreted to require the law firm to, at a bare minimum, apply the claims of each and every patent that is being brought into the lawsuit to an accused device and conclude that there is a reasonable basis for a finding of infringement of at least one claim of each patent so asserted. The presence of an infringement analysis plays the key role in determining the reasonableness of the pre-filing inquiry made in a patent infringement case under Rule 11. Morrison performed neither a formal nor an informal analysis of any sort. This cannot be found to be a reasonable inquiry for the purpose of filing patent infringement claims. A patent suit can be an expensive proposition. Defending against baseless claims of infringement subjects the alleged infringer to undue costs—precisely the scenario Rule 11 contemplates. Performing a pre-filing assessment of the basis of each infringement claim is, therefore, extremely important. In bringing a claim of infringement, the patent holder, if challenged, must be prepared to demonstrate to both the court and the alleged infringer exactly why it believed before filing the claim that it had a reasonable chance of proving infringement. Failure to do so should ordinarily result in the district court expressing its broad discretion in favor of Rule 11 sanctions, at least in the absence of a sound excuse or considerable mitigating circumstances.8

Thus, three key factors come into play in determining whether a declaratory judgment plaintiff alleging lack of patent infringement properly complies with Rule 11: (a) was a reasonable infringement analysis (including claim

5. Q-Pharma 360 F.3d at 1302 (quoting View Eng’g, 208 F.3d at 986) (citations omitted, emphasis added). 6. Id. (emphasis added). 7. Antonious, 275 F.3d at 1072. 8. View Eng’g, 208 F.3d at 986 (emphasis added).

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construction) performed? (b) was the claim construction applied against the allegedly infringing product or process? and (c) was the infringement analysis done before the lawsuit was filed? Regarding the first factor, in Antonious, the Federal Circuit found that an adequate claim construction analysis had been performed, even though the court adopted a different construction: The Finnegan Henderson attorneys independently construed the patent claims before filing suit against Spalding; there is no suggestion that they simply relied on Mr. Antonious for their claim analysis. Thus, Finnegan Henderson may be sanctioned for violating Rule 11(b)(2) only if a reasonable attorney would have concluded that the claim construction proposed by the Finnegan Henderson attorneys was frivolous. . . . Spalding raised substantial arguments in rebutting Finnegan Henderson’s claim construction, including arguments based on the text of the patent, the prosecution history, and Mr. Antonious’s own testimony. Agreeing with Spalding, the district court rejected Finnegan Henderson’s proffered construction of the claim language and concluded that the limitation requiring the hosel to “extend[] into” the peripheral mass is not satisfied if, as in the Intimidator clubs, the hosel merely “tangentially touches” the portion of the club head asserted to be the peripheral mass. It is not necessary for us to decide whether Finnegan Henderson’s proffered construction was correct. It is enough to conclude, as we do, that in light of the alternative dictionary definition and the quoted passage from the 279 patent, the claim construction that Finnegan Henderson advanced in the district court was not frivolous.9

Regarding the second factor, however, the Antonious court remanded the case for the court to determine whether the claim construction had been reasonably applied against all of the allegedly infringing products.10 The patentee alleged infringement by 21 golf clubs.11 However, prior to alleging infringement of the 21 clubs, the patentee’s attorneys had only compared the construed claims with a single club.12 The Federal Circuit stated: To be sure, when a number of different products are charged with infringement it is not always necessary for the plaintiff ’s attorneys to inspect each product separately to verify the facts on which the plaintiff bases its infringement allegations. At a minimum, however, the evidence uncovered by the patent holder’s

9. 10. 11. 12.

Antonious, 275 F.3d at 1072–73 (emphasis added). Id. at 1076–77. Id. at 1074. Id. at 1075.

Patent Evaluations and Opinions for Rule 11 and Section 285 499 investigation must be sufficient to permit a reasonable inference that all the accused products infringe.13

In remanding the case, the court indicated: In this case, Finnegan Henderson admits that, apart from the single Intimidator driver brought to it by Mr. Antonious, it did not cut open and inspect any of the other Intimidator metal woods before filing suit against Spalding, and that when it submitted the October 30 letter, it still had not cut open and inspected any other of the specifically identified Intimidator metal woods. Thus, the Finnegan Henderson attorneys had no direct knowledge that any of the accused Intimidator metal woods (other than the driver brought to it by Mr. Antonious) met the “extends into and connects with a portion of said peripheral mass” limitation of claim 1, even under Finnegan Henderson’s proposed claim construction. Instead, the Finnegan Henderson attorneys inferred that the club heads of each of the other accused Intimidator metal woods had an interior structure similar to that of the driver that they had cut open. On remand, the trial court must decide whether that inference was reasonable, given the other information the Finnegan Henderson attorneys had at the time. . . . The record is unclear as to whether the Finnegan Henderson attorneys had other evidence on October 30 from which an objectively reasonable attorney would have inferred that each of the accused Intimidator metal woods had a interior structure that infringed claim 1 of the 279 patent as construed by the Finnegan Henderson attorneys. After determining what evidence the Finnegan Henderson attorneys had in their possession on October 30 regarding the structure of the 21 accused Intimidator woods, the district court must determine whether the inference of infringement was objectively reasonable. In sum, to the extent that the district court based its sanctions order on the court’s conclusion that Finnegan Henderson’s construction of claim 1 of the 279 patent was frivolous, we disagree. With respect to the question of the adequacy of Finnegan Henderson’s prefiling factual investigation, the district court did not determine whether the evidence the Finnegan Henderson attorneys had in their possession when the October 30 letter was submitted would have led a reasonable attorney to believe that each of the 21 accused Spalding Intimidator metal woods satisfied the “extends into and connects with a portion of said peripheral mass” limitation in claim 1 of the 279 patent, under the Finnegan Henderson attorneys’ construction of that claim language. We therefore vacate the order of the district court and remand for the court to determine whether the Finnegan Henderson investigation was sufficiently thorough that, under Finnegan Henderson’s proposed claim construction, its factual conclusions

13. Id.

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Chapter 14 Evaluating and Opining on Third Party Patent Rights regarding the infringement assertions satisfied the Rule 11(b)(3) prefiling investigation requirement.14

Also regarding the second factor, in Judin the Federal Circuit held that the district court had abused its discretion in not awarding sanctions under Rule 11 where the patentee had not attempted to obtain a sample of the accused product and had not compared the accused device with the patent claims prior to filing suit.15 Finally, with regard to the second factor, in Q-Pharma the Federal Circuit held that the patentee had satisfied the requirement of comparing the construed claims with the accused product, where the patentee compared the construed claims with advertizing statements about the accused product that the court found were sufficiently detailed to allow an infringement analysis: Jergens’ next contention is that Q-Pharma’s pre-filing infringement analysis was inadequate in that it relied solely on Jergens’ advertising statements and did not include a chemical analysis of the accused product. While it is true that Q-Pharma could have conducted a more thorough investigation before filing suit, we conclude that its pre-filing infringement analysis was supported by a sufficient evidentiary basis. Q-Pharma acquired a sample of the Curel (R) CoQ[10] lotion and reviewed its advertising and labeling, which listed the product’s ingredients and repeatedly touted the therapeutic effects of CoQ[10]. Q-Pharma concluded, however, that chemical analyses identifying the actual percentage of CoQ[10] in the accused product would not likely have changed its infringement analysis. Given Q-Pharma’s nonfrivolous interpretation of claim 1 as requiring no specified minimum amount of CoQ[10] and Jergens’ forthright assertions regarding the therapeutic effects of CoQ[10] in the accused product, we conclude that it was reasonable for Q-Pharma to believe that the accused product contained a “therapeutically effective amount” of CoQ[10] as the “principal active ingredient.”16

Regarding the third factor, in Judin, the Federal Circuit affirmed Rule 11 sanctions in part where an adequate infringement analysis was not done prior to filing the complaint: By viewing the accused devices at a distance Judin was able to determine that they had a light source and a rounded tip through which the light passed, and that the light was focused in a pinpoint. That may have been sufficient to put

14. Id. at 1075–77 (emphasis added). 15. Judin v. United States, 110 F.3d 780, 784 (Fed. Cir. 1997). 16. Q-Pharma, Inc. v. Andrew Jergens Co., 360 F.3d 1295, 1301–2 (Fed. Cir. 2004).

Patent Evaluations and Opinions for Rule 11 and Section 285 501 Judin on inquiry about whether the Government was using a device that infringed his patent. But Rule 11 requires more. It requires that the inquiry be undertaken before the suit is filed, not after. Defendants have no choice when served with a complaint if they wish to avoid a default. They must undertake a defense, and that necessarily involves costs. Rule 11 prohibits imposing those costs upon a defendant absent a basis, well-grounded in fact, for bringing the suit. In this case, prior to the filing of the suit, neither Judin or his counsel had made a reasonable effort to ascertain whether the accused devices satisfied the two key claim limitations, either literally or under the doctrine of equivalents. No adequate explanation was offered for why they failed to obtain, or attempted to obtain, a sample of the accused device from the Postal Service or a vendor so that its actual design and functioning could be compared with the claims of the patent.17

C. Section 285 In addition to, and separate from Rule 11, 35 U.S.C. § 285 in the U.S. patent statute allows for sanctions to be imposed for bad faith in patent litigation.18 Unlike Rule 11 (discussed above), the Federal Circuit “appl[ies] Federal Circuit case law to the § 285 analysis, as it is unique to patent law.”19 As explained by the Federal Circuit: The determination of whether a case is exceptional and, thus, eligible for and warranting an award of attorney fees under § 285 is a two-step process in which the district court must (1) determine whether there is clear and convincing evidence that a case is exceptional, a factual determination reviewed for clear error, and (2) if so, then determine in its discretion whether an award of attorney fees is justified. . . . If there is clear and convincing evidence that a plaintiff has brought a baseless or frivolous suit against an accused infringer, that is a sufficient basis to require a district court to deem the case exceptional under § 285. See Forest Labs., Inc. v. Abbott Labs., 339 F.3d 1324, 1329–30 (Fed. Cir. 2003) (“Although a lawsuit pursued in bad faith is a sufficient basis for imposing attorney fees under § 285, such bad faith requires not misleading pre-litigation conduct, but vexatious, unjustified, or frivolous litigation”).20

17. Judin, 110 F.3d at 784 (emphasis added). 18. 35 U.S.C.S. § 285 (2009). 19. Digeo, Inc. v. Audible, Inc., 505 F.3d 1362, 1366 (Fed. Cir. 2007); Pharmacia & Upjohn Co. v. Mylan Pharms., Inc., 182 F.3d 1356, 1359 (Fed. Cir. 1999). 20. Digeo, 505 F.3d at 1366–67; Superior Fireplace Co. v. Majestic Prods. Co., 270 F.3d 1358, 1378 (Fed. Cir. 2001).


Further, Federal Circuit has stated: A case may be deemed exceptional when there has been some material inappropriate conduct related to the matter in litigation, such as willful infringement, fraud or inequitable conduct in procuring the patent, misconduct during litigation, vexatious or unjustified litigation, conduct that violates Fed. R. Civ. P. 11, or like infractions. See, e.g., Cambridge Prods. Ltd. v. Penn Nutrients Inc., 962 F.2d 1048, 1050–51 (Fed. Cir. 1992); Beckman Instruments, Inc., v. LKB Produkter AB, 892 F.2d 1547, 1551 (Fed. Cir. 1989).21

Still further, the Federal Circuit has set forth a two-prong test for determining whether a case is exceptional under Section 258: Absent misconduct in conduct of the litigation or in securing the patent, sanctions may be imposed against the patentee only if both (1) the litigation is brought in subjective bad faith, and (2) the litigation is objectively baseless.22

Also unlike Rule 11 sanctions, in which the burden is on the accused party to prove it made a reasonable inquiry, to successfully obtain sanctions under Section 285, “the burden is on [accusing party] to prove by clear and convincing evidence that the case is exceptional by showing that [the accused party] brought a frivolous lawsuit. . . .”23 Moreover, as explained by the Federal Circuit: The law “recognizes a presumption that the assertion of a duly granted patent is made in good faith . . . ; this presumption is overcome only by affirmative evidence of bad faith.” Golan v. Pingel Enter., Inc., 310 F.3d 1360, 1371 (Fed. Cir. 2002) (citations omitted). To avoid summary judgment, a party claiming bad faith patent enforcement “must present affirmative evidence sufficient for a reasonable jury to conclude that the patentee acted in bad faith, in light of the burden of clear and convincing evidence that will adhere at trial.” Id.24

D. Role of Patent Evaluations and/or Opinions in Section 285 Sanctions The Federal Circuit has held that absent misconduct in conduct of the litigation or in securing the patent, reliance by a party asserting infringement, noninfringement, or invalidity (e.g., a declaratory judgment plaintiff assert-

21. Brooks Furniture Mfg. v. Dutailier Int’l, Inc., 393 F.3d 1378, 1381–82 (Fed. Cir. 2005). 22. Id.; Prof ’l Real Estate Investors v. Columbia Pictures Indus., 508 U.S. 49, 60–61 (1993); Forest Labs., Inc. v. Abbott Labs., 339 F.3d 1324, 1329–31 (Fed. Cir. 2003). 23. Digeo, 505 F.3d at 1369. 24. Springs Window Fashions LP v. Novo Indus., L.P., 323 F.3d 989, 999 (Fed. Cir. 2003).


ing noninfringement and/or invalidity) on an objectively competent opinion of patent infringement, noninfringement, or invalidity is sufficient to prevent sanctions under Section 285. For example, in Brooks, the Federal Circuit held that a declaratory judgment defendant who brought unsuccessful counterclaims of patent infringement was not subject to attorney fees under Section 285 because the party had “reasonably relied on opinions of counsel that there probably was infringement.”25 In making its holding in Brooks, the Federal Circuit reversed district court sanctions under Section 285, noting that the district court described the infringement opinion relied on by the declaratory judgment defendant/counterclaimant as follows: “At first glance, one might actually find this opinion to be reasonable, comprehensive and competent,” and that the attorney “also adequately considered the prior art in this instance,” that the attorney “detailed the components and embodiments” of the patent and application he was considering, and that he “provided a detailed review of the proper procedure one must follow in determining infringement, and then lengthy application of this procedure in comparing the Brooks and Town Square chairs to Dutailier’s designs.” . . . the attorney “adequately analyzed the scope of the patent claims.” . . .26

However, despite this description of the adequacy of the infringement opinion, the Brooks district court found that the declaratory judgment defendant/counterclaimant’s reliance on the opinion was unreasonable because the opinion did not “mention every detail of the patented or the accused design.”27 In reversing the district court, the Federal Circuit held: The fact that an infringement opinion may not have mentioned every detail of the patented or the accused design does not necessarily render the opinion wrong or unreliable. The district court described the attorney’s opinion as appearing to be “reasonable, comprehensive and competent.” Such an opinion cannot be transformed into the opposite extreme of unreliability and incompetence, simply because the court reached a different conclusion on the merits of infringement. Bringing an infringement action does not become unreasonable in terms of ’285 if the infringement can reasonably be disputed. Infringement is often difficult to determine, and a patentee’s ultimately incorrect view of how a court will find does not of itself establish bad faith. . . . We conclude that there was not clear and convincing evidence of bad faith by Dutailier in charging Brooks with infringement and in pressing this charge in litigation.28

25. 26. 27. 28.

Brooks, 393 F.3d at 1383. Id. Id. at 1384. Id.


Regarding the court’s two-prong test for sanctions under Section 285, the Federal Circuit concluded: “Since we conclude that the first requirement (subjective bad faith) is not satisfied here, we need not decide whether the second (objectively baseless) standard was met.”29 In concluding, the Federal Circuit in Brooks again emphasized: “Although the entirety of a patentee’s conduct may be considered, enforcement of patent rights that are reasonably believed to be infringed does not entail special penalty when the patentee is unsuccessful.”30

III. Patent Evaluations and Opinions for ANDA Paragraph IV Certifications The landmark Hatch-Waxman Act (“Act”) is a complex set of federal laws and regulations intended to ease and increase the entry of generic pharmaceuticals into the U.S. marketplace and to restore some of the patent protection for brand name drug pioneer drugs that is lost during FDA premarketing approval. Part of the Hatch-Waxman Act allows generic drug companies to obtain expedited FDA approval of generic drugs by relying on certain FDA approval data submitted for the pioneer drugs by the original FDA applicant. In this process, a generic drug manufacturer submits to the FDA an Abbreviated New Drug Application (“ANDA”). An ANDA may be submitted under various scenarios, with one of the more common ones involving where the related pioneer drug is still considered by the brand name manufacturer to be protected by one or more U.S. patents. The FDA lists patents that brand name drug manufacturers consider cover their products in a list known as the Orange Book. In the case in which an ANDA is filed and there is at least one patent in force and listed in the Orange Book as covering the pioneering drug or its use, an ANDA must be submitted with a Paragraph IV certification. This certification must set forth in detail why the ANDA applicant asserts that the patents listed in the Orange Book as covering the drug are invalid and/or are not infringed by the proposed generic drug. Therefore, preparing and filing an ANDA with a Paragraph IV certification requires an evaluation and opinion of patent invalidity and/or noninfringement of the patents listed in the Orange Book.

29. Id. at 1381. 30. Id. at 1384; cf. Yamanouchi Pharm. Co. v. Danbury Pharmacal, Inc., 231 F.3d 1339, 1347 (Fed. Cir. 2000) (awarding attorneys fees under Section 285 where the “legal opinion contained an acknowledged error in chemistry, which was critical to its conclusion of obviousness.”).

Patent Evaluations and Opinions for ANDA Paragraph IV Certifications 505

A. Overview of the Hatch-Waxman Act In Mylan Pharmaceuticals, the Federal Circuit adeptly describes the HatchWaxman Act,31 including Orange Book patent listings, ANDAs, and Paragraph IV certifications: Under the FFDCA, a pharmaceutical company seeking to manufacture a new drug is required to file a New Drug Application (“NDA”) for consideration by the FDA. 21 U.S.C. § 355(a) (1994). Preparing an NDA is frequently a timeintensive and costly process, because among other things, it must contain detailed clinical studies of the drug’s safety and efficacy. See id. § 355(b)(1) (Supp. V 1999). The NDA must also include a list of patents which claim the drug: The applicant shall file with the application the patent number and the expiration date of any patent which claims the drug for which the applicant submitted the application or which claims a method of using such drug and with respect to which a claim of patent infringement could reasonably be asserted if a person not licensed by the owner engaged in the manufacture, use, or sale of the drug. . . . Upon approval of the application, the Secretary shall publish information submitted under [this section]. Id. If the FDA approves the NDA, it publishes a listing of the drug and patents on the drug’s approved aspects in Approved Drug Products with Therapeutic Equivalence Evaluations, otherwise known as the “Orange Book.” Id. § 355(j)(7)(A)(iii) (1994); id. § 355(b)(1); see also 21 C.F.R. § 314.53(c)(2) (2001). Because an applicant may not receive original approval for all aspects of the drug as described in the original NDA submission, once the NDA is approved, the applicant must amend the patent submission to list only the patents that meet the listing criteria for the approved drug product. 21 C.F.R. § 314.53(c)(2)(ii) (2001). Under the Drug Price Competition and Patent Term Restoration Act of 1984, Pub. L. No. 98–417, 98 Stat. 1585 (1984), codified at 21 U.S.C. §§ 355, 360cc, and 35 U.S.C. §§ 156, 271, 282 (the “Hatch-Waxman Amendments” to the FFDCA and to Title 35 of the U.S. Code relating to patents), a pharmaceutical manufacturer seeking approval to market a generic version of a previously approved drug may submit an abbreviated new drug application (“ANDA”) to the FDA. 21 U.S.C. § 355(j) (1994). An ANDA offers an expedited approval process for generic drug manufacturers. Instead of filing a full NDA with new safety and efficacy studies, in an ANDA a generic manufacturer may rely in part on the pioneer manufacturer’s work by submitting data demonstrating the generic product’s bioequivalence with the previously approved drug. See id. § 355 (j)(2)(A)

31. The complete name of the Hatch-Waxman Act is the Hatch-Waxman Amendments to the Federal Food, Drug, and Cosmetic Act (“FFDCA”), which also included amendments to Title 35, the U.S. patent statute.

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Chapter 14 Evaluating and Opining on Third Party Patent Rights (Supp. V 1999). These provisions of the Hatch-Waxman Amendments “emerged from Congress’ efforts to balance two conflicting policy objectives: to induce name brand pharmaceutical firms to make the investments necessary to research and develop new drug products, while simultaneously enabling competitors to bring cheaper, generic copies of those drugs to market.” Abbott Labs. v. Young, 920 F.2d 984, 991 (D.C. Cir. 1990) (Edwards, J., dissenting on other grounds). Thus, Title I of the Act was intended to “make available more low cost generic drugs by establishing a generic drug approval procedure for pioneer drugs first approved after 1962.” H.R. Rep. No. 98–857, pt. 1 at 14 (1984), reprinted in 1984 U.S.C.C.A.N. 2647, 2647. Title II, on the other side of the scale, was intended to benefit pioneer drug manufacturers by “restoring . . . some of the time lost on patent life while the product is awaiting pre-market approval.” H.R. Rep. No. 98-857, pt. 1 at 15, 1984 U.S.C.C.A.N. at 2648. The Hatch-Waxman provisions concerning patent infringement are part of this balance. Under 35 U.S.C. § 271(e)(1), it is not infringement to conduct otherwise infringing acts necessary to prepare an ANDA. 35 U.S.C. § 271(e)(1) (Supp. V 1999) (“It shall not be an act of infringement to make, use, offer to sell, or sell . . . a patented invention . . . solely for uses reasonably related to the development and submission of information under a Federal law which regulates the manufacture, use, or sale of drugs.”). Under section 271(e)(2), however, a generic drug manufacturer infringes by filing an ANDA to obtain FDA approval for the purpose of marketing a generic drug product claimed in a patent before the patent expires. 35 U.S.C. § 271(e)(2) (1994) (“It shall be an act of infringement to submit . . . [an ANDA] . . . if the purpose of such submission is to obtain [FDA] approval . . . to engage in the commercial manufacture, use, or sale of a drug . . . claimed in a patent before the expiration of such patent.”) (emphasis added). Despite this provision, not all ANDA applicants can be sued immediately for infringement; moreover, they cannot sue immediately for declaratory judgment with respect to the patent, as further discussed below. As part of the ANDA process, an applicant seeking to market a generic version of a listed drug must make a certification as to each patent listed in the Orange Book which “claims the listed drug . . . or which claims a use for such listed drug for which the applicant is seeking approval.” 21 U.S.C. § 355(j)(2)(A)(vii) (1994). Further, according to regulations enacted by the FDA, an applicant whose ANDA is pending when a pioneer drug manufacturer lists additional patents in the Orange Book must make certifications as to the new patents, unless the additional patents are submitted more than thirty days after they were issued. 21 C.F.R. § 314.94(a)(12)(vi) (2001). In either case, the applicant must certify either that: (I) no such patent information has been submitted to the FDA; (II) the patent has expired; (III) the patent is set to expire on a certain date; or (IV) such patent is invalid or will not be infringed by the manufacture, use, or sale of the new generic drug for which the ANDA is submitted. 21 U.S.C. § 355(j)(2)(A)(vii)(I–IV) (1994). These are commonly referred to as Paragraph I, II, III, and IV certifications. Further, if one of

Patent Evaluations and Opinions for ANDA Paragraph IV Certifications 507 the listed patents is a method-of-use patent which does not claim a use for which the applicant is seeking approval, the applicant must make a statement to that effect (a “Section viii Statement”). Id. § 355(j)(2)(A)(viii). An ANDA containing a Paragraph I or II certification may be approved without additional delay. See 21 U.S.C. § 355(j)(5)(B)(i) (Supp. V 1999). An ANDA containing a Paragraph III certification indicates that the applicant does not intend to market the drug until after the expiration of the patent, and the approval of the ANDA cannot be made final until the patent expires. Id. § 355(j)(5)(B)(ii). When an ANDA contains a Paragraph IV certification, the ANDA applicant must give notice to the patentee and must provide detailed bases for its belief that the patent is invalid, unenforceable, or not infringed. Id. § 355(j)(2)(B)(i); 21 C.F.R. § 314.95(c)(6) (2001). The patentee is then given forty-five days to sue the ANDA applicant for infringement. 21 U.S.C. § 355(j)(5)(B)(iii) (Supp. V 1999). If the patentee does not file suit, the application may be approved. If the patentee files suit within that period, the FDA may not approve the ANDA until the expiration of the patent, judicial resolution of the infringement suit, a judicial determination that the patent is invalid or unenforceable, or thirty months from the patentee’s receipt of notice, whichever is earliest. Id.; 21 C.F.R. § 314.107(b) (1)(iv) (2001). The court in which the suit is pending may order a shorter or longer stay on the approval time if “either party to the action fails to reasonably cooperate in expediting the action.” 21 U.S.C. § 355(j)(5)(B)(iii) (Supp. V 1999). Moreover, the availability of declaratory judgment actions is limited: “Until the expiration of forty-five days from the date the notice made under paragraph (2)(B)(i) is received, no action may be brought under section 2201 of Title 28, for a declaratory judgment with respect to the patent.” Id. These provisions give the pioneer manufacturer the first opportunity to file suit against the ANDA applicant for infringement, and may substantially delay the ANDA approval during the pendency of the litigation.32

B. ANDA Paragraph IV Certification As explained above, a drug company seeking FDA approval to market and sell a generic version of a previously FDA-approved drug may file an ANDA that relies on the previously approved FDA application. An ANDA must be accompanied by one or more of four different certifications33 that address issues

32. Mylan Pharms., Inc. v. Thompson, 268 F.3d 1323, 1325–27 (Fed. Cir. 2001) (emphasis added); Apotex, Inc. v. Thompson, 347 F.3d 1335, 1337–40 (Fed. Cir. 2003). 33. Where multiple patents are listed in the Orange Book for a single drug, an ANDA applicant may file an ANDA with different certifications for different patents in the Orange Book. For example, if the Orange Book lists an expired patent, and a patent that is still in force but that the ANDA applicant believes is invalid, the ANDA would be filed with a Paragraph II

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with patents that may be listed in the Orange Book for the pioneer drug. The certifications are: (a) the applicant certifies that no patents are listed in the Orange Book for the pioneer drug, (b) the applicant certifies that a patent in the Orange Book has expired, (c) the applicant certifies that a patent is set to expire on a certain date, or (d) the applicant certifies that a patent listed in the Orange Book is invalid or will not be infringed by the manufacture, use, or sale of the new generic drug for which the ANDA is submitted. As stated by the Federal Circuit in Apotex: Under FDA policy, an ANDA applicant must make a certification for every patent listed in the Orange Book for the particular approved drug to which the ANDA relates. When an ANDA applicant certifies that the patent is invalid or will not be infringed (a so-called “paragraph IV certification”), it must provide notice to the patentee and the holder of the approved NDA that it has submitted such a certification. Id. § 355(j)(2)(B)(i). In addition, the ANDA applicant must supply a detailed statement of the factual and legal basis for its opinion of invalidity or noninfringement. Id. § 355(j)(2)(B)(ii). The ANDA applicant must also provide such a statement if it amends its ANDA to include a paragraph IV certification. Id. § 355(j)(2)(B)(iii).34

Therefore, to comply with FDA regulations, prior to filing an ANDA with a Paragraph IV certification, a noninfringement and/or invalidity evaluation or opinion must be performed for any patents to which the Paragraph IV certification applies. This should include the elements required in any competent evaluation or opinion on a U.S. patent, including: (a) an evaluation of the specification, claims, prior art, prosecution history, and extrinsic evidence if necessary and appropriate; (b) claim construction based on the intrinsic and, if necessary and appropriate, extrinsic evidence; and (c) application of the construed claims to the generic drug for purposes of determining noninfringement, including both literal infringement and infringement under the doctrine of equivalents, and/or application of the construed claims to the prior art and/or support in the specification for determining patent validity.

C. Accountability for Proper ANDA Paragraph IV Certification “[T]he mere fact that a company has filed an ANDA application or certification cannot support a finding of willful infringement for purposes of awarding

certification for the expired patent and a Paragraph IV certification for the patent that remains in force. 34. Apotex, 347 F.3d at 1338 (emphasis added).


attorney’s fees.”35 On the other hand, while “[t]he act of filing an ANDA constitutes a ‘highly artificial’ act of infringement under 35 U.S.C. § 271(e)(2),”36 Section 271(e)(4) “permits attorney’s fees to be awarded [under 35 U.S.C. § 285] to the prevailing party in ‘exceptional cases.’ ”37 The relevant part of Section 271(e)(4) provides: The remedies prescribed by subparagraphs (A), (B), and (C) are the only remedies which may be granted by a court for an act of infringement described in paragraph (2) [infringement by filing an ANDA], except that a court may award attorney fees under section 285.38

The Federal Circuit has explained: Section 285 permits attorney’s fees to be awarded to the prevailing party in “exceptional cases.” This court has recognized many types of misconduct that may create an exceptional case for purposes of awarding fees, including inequitable conduct before the PTO, litigation misconduct such as vexatious or unjustified litigation or frivolous filings, and willful infringement. See Hoffmann-La Roche Inc. v. Invamed Inc., 213 F.3d 1359, 1365 (Fed. Cir. 2000); Rosemount, Inc. v. Beckman Instruments, Inc., 727 F.2d 1540, 1548 (Fed. Cir. 1984).39

However, in the context of attorney’s fees in patent infringement suits based on ANDA filings, the Federal Circuit has instructed: While a myriad of factual circumstances may give rise to a finding that a case is exceptional for purposes of 35 U.S.C. § 285, this court has limited what types of conduct may give rise to an award of attorney’s fees for purposes of Section 271(e)(4). In Yamanouchi Pharmaceutical Co. v. Danbury Pharmacal, Inc., this Court determined that a baseless and “wholly unjustified” paragraph IV certification in an ANDA filing, when combined with litigation misconduct, warranted an exceptional case finding. 231 F.3d 1339, 1346 (Fed. Cir. 2000). In Yamanouchi, the district court had found that the generic company’s ANDA filing constituted willful infringement, but we did not adopt that rationale on appeal. Instead we cautioned that the trial court “need not have elevated the

35. Glaxo Group Ltd. v. Apotex, Inc., 376 F.3d 1339, 1350–51 (Fed. Cir. 2004). 36. Id. at 1349. 37. Id. at 1350; Yamanouchi Pharm. Co. v. Danbury Pharmacal, Inc., 231 F.3d 1339, 1346 (Fed. Cir. 2000); Takeda Chem. Indus. v. Mylan Labs., 549 F.3d 1381, 1384 (Fed. Cir. 2008) (“When a patent has been infringed by the filing of an ANDA, 35 U.S.C. § 271(e)(4) provides for the grant of attorney fees under 35 U.S.C. § 285, which in turn allows the court to award reasonable attorney fees to a prevailing party in exceptional cases.”). 38. 35 U.S.C.S. § 271(e)(4) (emphasis added). 39. Glaxo, 376 F.3d at 1350.

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Chapter 14 Evaluating and Opining on Third Party Patent Rights ANDA certification into a finding of willful infringement” and held that Danbury’s entire conduct justified the award of attorney’s fees, noting that the generic company failed to present even a prima facie case of invalidity in filing its paragraph IV certification, hence making a baseless filing, and proceeded to present its case in litigation despite “glaring weaknesses.” Therefore, in Yamanouchi, we did not agree that the generic company had engaged in willful infringement, but rather determined that an award of attorney’s fees was permitted because the generic had filed numerous baseless filings supporting its fruitless and meritless arguments, both in its case at trial and in its ANDA certification. Such unjustified litigation and misconduct has always justified a finding of an exceptional case.40

Of particular interest regarding opinions, in Yamanouchi the ANDA filer had obtained an opinion of counsel of invalidity of the Orange Book-listed, challenged patent prior to filing the ANDA. However, the Federal Circuit nonetheless affirmed an award of attorney’s fees, finding that reliance on the opinion was not sufficient to support the filing of the Paragraph IV certification because the “legal opinion contained an acknowledged error in chemistry, which was critical to its conclusion of obviousness.”41 Specifically, the court held: In assessing whether a case qualifies as exceptional, the district court must look at the totality of the circumstances. These circumstances include Danbury’s choice to produce during trial a 1993 opinion from its patent attorney, Mr. Alfred B. Engelberg. This legal opinion contained an acknowledged error in chemistry, which was critical to its conclusion of obviousness. Danbury’s own expert, Dr. Loev, conceded at trial that “Engelberg’s interpretation of the [’408] patent was patently incorrect and that the [’408] patent nowhere described the formulation relied upon by Engelberg.”42

In Takeda v. Mylan, the Federal Circuit made a holding similar to that of Yamanouchi, finding that a combination of a baseless Paragraph IV certification and litigation misconduct was sufficient to award the patent owner over $16 million in attorney fees.43 Specifically, the Federal Circuit found the awarding of attorney fees under Section 285 proper where: [The Paragraph IV certifying party] did not make out a prima facie case of obviousness [of the challenged patent in its certification]. . . .

40. 41. 42. 43.

Id. (emphasis added, some citations omitted). Yamanouchi, 231 F.3d at 1347. Id. (citations omitted, emphasis added). Takeda Chem. Indus. v. Mylan Labs., 549 F.3d 1381 (Fed. Cir. 2008).

Patent Evaluations and Opinions for ANDA Paragraph IV Certifications 511 Furthermore, although it seems reasonable to expect assertions of invalidity based on prior art [originally presented with a Paragraph IV certification] to remain relatively consistent as the prior art should be known when the certification of invalidity is made . . . the court methodically examined a number of shortcomings in Alphapharm’s Paragraph IV letter, which were made obvious by Alphapharm’s “constantly shifting set of arguments,” that supported the finding that the certification was baseless. . . . The court also catalogued scientific errors in Alphapharm’s certification letter that the court saw as “insidious” and as underscoring that Alphapharm “did not act with due care or in good faith” in filing its certification. The court found that other assertions in Alphapharm’s Paragraph IV letter were baseless because of undisputed evidence . . . and that Alphapharm abandoned these arguments at trial because “they were unsupportable, not because Alphapharm made a tactical decision regarding which argument should be emphasized at trial.” The court concluded that the deficiencies in Alphapharm’s Paragraph IV letter were “so glaring” that they highlighted that Alphapharm “acted in bad faith in filing its Paragraph IV certification.” The court also discussed in depth what it saw as Alphapharm’s litigation misconduct. The court traced the many iterations of Alphapharm’s theory of obviousness and pointed to Alphapharm’s “utter failure” to account for the identification of compound b as the lead compound as required under structural obviousness law. The court reasoned that Alphapharm had over two years to develop its obviousness arguments in its Paragraph IV letter, and its failure to explain “why its Statement was so flawed and why its description of obviousness went through such a dramatic evolution” was “overwhelming” evidence of Alphapharm’s bad faith. Finally, the court discussed assertions made by Alphapharm that were unrelated to the obviousness claim and “created confusion, wasted valuable court time, and increased the burden of the litigation on the parties.” When considering the totality of the circumstances, the court stated bluntly, “This case was not close.” The court’s conviction in its findings could hardly be clearer.44

In supporting its holding, the Federal Circuit cited Yamanouchi, noting: A number of different circumstances may support the finding of an exceptional case, including “vexatious or unjustified litigation” or “frivolous suit,” of which there must be clear and convincing evidence. Indeed, one of the purposes of § 285 is to prevent “‘gross injustice’ when the accused infringer has litigated in bad faith.” In Yamanouchi Pharmaceutical Co. v. Danbury Pharmacal, Inc., we stated that “[t]he joint operation of §§ 271(e) and 285 require the paragraph (2) infringer to display care and regard for the strict standards of the Hatch-Waxman

44. Id. at 1386–87 (citations omitted, emphasis added).

512 Chapter 14 Evaluating and Opining on Third Party Patent Rights Act when challenging patent validity. . . . The Hatch-Waxman Act thus imposes a duty of care on an ANDA certifier.” 231 F.3d 1339, 1347 (Fed. Cir. 2000).45

The court further explained: Yamanouchi states that ANDA applicants owe a duty of care under the HatchWaxman Act, it explained that applicants fail to meet this duty when they file “baseless” certifications. Thus, Yamanouchi does not stand for the proposition that ANDA applicants who are merely negligent can trigger § 285.46

The court concluded: In this case, the district court correctly found that Alphapharm’s filing would amount to litigation misconduct supporting an exceptional case finding if it were “baseless” and if it “fail[ed] to present even a prima facie case of invalidity in filing the paragraph IV certification.” Thus, the trial court did not apply a simple negligence standard but found Alphapharm’s filing “baseless.” Moreover, the trial court found misconduct during litigation. Given the district court’s familiarity with the parties and the issues and its thorough discussion of Alphapharm’s certification letter and litigation strategy, we cannot say that the court committed clear error in finding that this was an exceptional case due in part to the misconduct of Alphapharm.47

Therefore, in order to avoid the possibility of attorney’s fees, a generic drug applicant filing an ANDA with a Paragraph IV certification should conduct reasonable prefiling due diligence regarding its assertions of noninfringement and invalidity of the challenged, Orange Book-listed patent. A prefiling competent opinion of counsel of noninfringement and/or invalidity should substantially reduce the risk of an ANDA filer facing an award of attorney’s fees. Importantly, however, separate from the issue of attorney’s fees for filing a baseless ANDA combined with litigation misconduct, if a pioneer drug company believes that a generic drug company’s ANDA Paragraph IV certification is not sufficient under law, the pioneer drug company cannot seek a judicial determination of whether a private party’s Paragraph IV certification complies with FDA requirements.48 The Hatch-Waxman Act does not provide

45. 46. 47. 48.

Id. at 1387–88 (some citations omitted, emphasis added). Id. at 1388 (emphasis added). Id. (citations omitted). Mylan Pharms., 268 F.3d at 1323, 1325–27 (Fed. Cir. 2001); Apotex, Inc. v. Thompson, 347 F.3d 1335, 1337–40 (Fed. Cir. 2003); 3M v. Barr Labs., Inc., 289 F.3d 775, 783 (Fed. Cir. 2002) (“Pursuant to our decisions in Mylan Pharmaceuticals, Inc. v. Thompson, 268 F.3d 1323 (Fed. Cir. 2001) and Andrx Pharmaceuticals, Inc. v. Biovail Corp., 276 F.3d 1368 (Fed. Cir. 2002), we hold that [the FDA rules for compliance with Paragraph IV certifications] cannot be enforced by a private party in a patent infringement action, but must be enforced, if at all, only


a private right of action to challenge the FDA’s determinations and actions.49 As stated by the Federal Circuit in Barr Labs.: “[A pioneering drug company] cannot seek a judicial determination of whether a private party’s paragraph IV certification complies with 21 U.S.C. § 355(j)(2)(B). Thus, the district court should not have decided the issue of compliance.”50 More specifically, in Barr Labs. the Federal Circuit ruled: [The pioneer drug company (3M) urged] that Barr had violated its duty under the Hatch-Waxman Amendments to file a compliant notice of its noninfringement position that would enable 3M to make an informed judgment as to whether to bring suit. As noted above, the district court rejected this argument, holding that Barr’s notice was compliant. 3M’s claim concerning compliance with the paragraph IV certification requirement is not insubstantial. The statute requires that: (i) An applicant who makes a certification described in subparagraph (A)(vii)(IV) shall include in the application a statement that the applicant will give the notice required by clause (ii) to— (I) each owner of the patent which is the subject of the certification or the representative of such owner designated to receive such notice, and (II) the holder of the approved application under subsection (b) of this section for the drug which is claimed by the patent or a use of which is claimed by the patent or the representative of such holder designated to receive such notice. (ii) The notice referred to in clause (i) shall state that an application, which contains data from bioavailability or bioequivalence studies, has been submitted under this subsection for the drug with respect to which the certification is made to obtain approval to engage in the commercial manufacture, use, or sale of such drug before the expiration of the patent referred to in the certification. Such notice shall include a detailed statement of the factual and legal basis of the applicant’s opinion that the patent is not valid or will not be infringed. 21 U.S.C. § 355(j)(2)(B) (emphasis added). The FDA has interpreted this statute to require, inter alia, “(i) for each claim of a patent alleged not to be infringed, a full and detailed explanation of why the claim is not infringed[; and] (ii) for each claim of a patent alleged to be invalid or unenforceable, a full and detailed explanation of the grounds supporting the allegation.” 21 C.F.R. § 314.52(c)(6). In Barr’s initial July 12, 2000, notification to 3M, it stated that its proposed drug product would not infringe any claim of the ’384 patent because “the active

in the context of an action under the Administrative Procedure Act (“APA”), 5 U.S.C. §§ 702–706.”). 49. Mylan Pharms., 268 F.3d at 1332; Barr Labs., 289 F.3d at 783. 50. Barr Labs., 289 F.3d at 783.

514 Chapter 14 Evaluating and Opining on Third Party Patent Rights ingredient [in the proposed product] is . . . not the same as the compound claimed in . . . the ’384 patent,” and that “because the active ingredient was known before the earliest effective filing date of the ’384 patent, the active ingredient cannot infringe . . . under the doctrine of equivalents.” However, because it is clear that the compounds claimed in the ’384 patent are not the active ingredients in the drug, this notice was of no assistance to 3M, and 3M therefore sought additional information regarding Barr’s noninfringement position. In its second, August 10, 2000, letter to 3M, Barr stated that “as detailed in our letter dated July 12, 2000, Barr’s proposed product does not contain any of the compounds claimed in the ’384 patent and, in fact, Barr’s active ingredient was known well over a year before your client filed its earliest relevant patent application.” (emphasis added). The appellants argue that this notice was legally deficient under the statute because Barr’s statement that its “proposed product does not contain any of the compounds claimed in the ’384 patent” was at best ambiguous. Appellants urge that Barr, by referring to its statements in the July 12, 2000, letter, indicated that its noninfringement position had not changed, and that Barr still based its opinion of noninfringement on a comparison between the active ingredient in its proposed product and the claimed compounds, rather than on a comparison between any compounds in the proposed product and the compounds claimed in the ’384 patent However, we hold that we need not, indeed cannot, decide this question of compliance with the paragraph IV certification requirements. Under the HatchWaxman Amendments we cannot enforce the requirements of paragraph IV certifications in an infringement suit. In our decision in Mylan we confronted a claim that a particular patent listing in the Orange Book was improper because the listed patent did not claim a drug for which an NDA had been submitted, as required by 21 U.S.C. § 355(b)(1). Mylan, 268 F.3d at 1332. In Mylan, the ANDA applicant sued the FDA and the NDA holder, alleging that the pertinent patent had been improperly listed in the Orange Book, and moved for declaratory and injunctive relief requiring the NDA holder to take measures to delist the patent from the Orange Book and requiring the FDA to immediately approve the ANDA. Id. at 1328. The district court issued injunctions requiring the private defendant to withdraw the Orange Book listing and requiring the FDA to approve the ANDA. Mylan Pharms., Inc. v. Thompson, 139 F. Supp. 2d 1, 29–30 (D.D.C. 2001). The private defendant appealed, arguing that the FFDCA did not grant a private right of action, but the FDA did not appeal. On appeal, the appellee-ANDA applicant (the declaratory judgment plaintiff) urged that its action was proper because it arose under the patent laws (Title 35 of the United States Code). The ANDA applicant claimed that its declaratory judgment action asserted a defense to patent infringement, because listing in the Orange Book was an element of any patent infringement cause of action which the NDA holder might have asserted. Mylan, 268 F.3d at 1330–31. We rejected the ANDA applicant’s attempt to bring its action under the patent laws because we concluded that its cause of action was not tied to any recognized

Patent Evaluations and Opinions for Avoiding Preliminary Injunctions patent infringement defense but rather was “an attempt to assert a private right of action for ‘delisting’ under the FFDCA.” Id. at 1332. We also made clear that there was no private cause of action for delisting under the FFDCA. Id. We reaffirmed this holding in Andrx. In Andrx, in an infringement action between a patentee and an ANDA filer, the district court shortened the thirtymonth stay period, citing 21 U.S.C. § 355(j)(5)(B)(iii), because it found that the patentee’s listing of the second patent in the Orange Book was done improperly to delay the resolution of the patent actions between the parties. We reversed, holding that “the district court had no authority in the infringement action, as opposed to an action under the Administrative Procedure Act, to shorten the thirty-month stay because of allegedly improper conduct before the FDA.” Andrx at 1376. We held that a claim of improper conduct in the FDA proceeding was required to be raised initially before the FDA itself and thereafter in a judicial review proceeding brought under the APA. Id. at 1379. We conclude that this case is governed by Mylan and Andrx. Like Mylan, 3M here attempts to assert a private right of action under the FFDCA because of another party’s alleged failure to comply with the statute. As we held in Mylan, we see nothing in the Hatch-Waxman Amendments to alter the statement in section 337(a) of the FFDCA that “all such proceedings for the enforcement, or to restrain violations, of this chapter shall be by and in the name of the United States.” 21 U.S.C § 337(a) (1994). “In a case in which neither the statute nor the legislative history reveals a congressional intent to create a private right of action for the benefit of the plaintiff,” the inquiry is at an end. Northwest Airlines, Inc. v. Transp. Workers, 451 U.S. 77, 94 n.31, 101 S. Ct. 1571, 67 L. Ed. 2d 750 (1981). Mylan at 1332. Accordingly, we hold that appellants cannot seek a judicial determination of whether a private party’s paragraph IV certification complies with 21 U.S.C. § 355(j)(2)(B). Thus, the district court should not have decided the issue of compliance.51

IV. Patent Evaluations and Opinions for Avoiding Preliminary Injunctions When a party is sued for patent infringement, the patentee may move for a preliminary injunction to enjoin any alleged post-filing infringement. A court’s decision to grant a preliminary injunction is based on its assessment of four factors: “(1) the likelihood of the patentee’s success on the merits; (2) irreparable harm if the injunction is not granted; (3) the balance of hardships between the parties; and (4) the public interest.”52

51. Id., at 781–83 (emphasis added). 52. Oakley, Inc. v. Sunglass Hut Int’l, 316 F.3d 1331, 1338–1339 (Fed. Cir. 2003) (citing Amazon. com, Inc. v. Barnesandnoble.com, Inc., 239 F.3d 1343, 1350 (Fed. Cir. 2001)); Abbott Labs. v. Sandoz, Inc., 544 F.3d 1341, 1344 (Fed. Cir. 2008) (“[T]he factors relevant to the grant or

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A. Assessing the Likelihood of Success on the Merits Requires an Infringement and Validity Analysis In patent infringement actions, assessing the first factor of the preliminary injunction analysis (the likelihood of the patentee’s success on the merits) requires an infringement and validity analysis. This necessarily includes a review of the intrinsic evidence (including the specification, claims, prosecution history and prior art) and if necessary extrinsic evidence, claim construction, comparison of the construed claims with the potentially infringing product or process for an infringement determination, and comparison of the construed claims with the prior art and support in the specification for a validity determination. In Oakley, the Federal Circuit explained this process as follows: An assessment of the likelihood of infringement, like a determination of patent infringement at a later stage in litigation, requires a two-step analysis. “First, the court determines the scope and meaning of the patent claims asserted . . . [Secondly,] the properly construed claims are compared to the allegedly infringing device.” Cybor Corp. v. FAS Techs., Inc., 138 F.3d 1448, 1454 (Fed. Cir. 1998) (en banc) (citations omitted). An assessment of the likelihood of validity of a patent claim over the prior art also involves a two-step process. The first step is the same claim construction implicated in an infringement analysis. See Smiths Indus. Med. Sys., Inc. v. Vital Signs, Inc., 183 F.3d 1347, 1353 (Fed. Cir. 1999). The second step involves a comparison of the asserted claims with the prior art. A determination that a claim is invalid as being anticipated or lacking novelty under 35 U.S.C. § 102 requires a finding that “each and every limitation is found either expressly or inherently in a single prior art reference.” Celeritas Techs. Inc. v. Rockwell Int’l Corp., 150 F.3d 1354, 1360 (Fed. Cir. 1998).53

In Amazon.com, the Federal Circuit indicated: Of course, whether performed at the preliminary injunction stage or at some later stage in the course of a particular case, infringement and validity analyses must be performed on a claim-by-claim basis. See, e.g., Bayer AG v. Elan Pharm. Research Corp., 212 F.3d 1241, 1247 (Fed. Cir. 2000) (“Literal infringement

denial of a preliminary injunction, viz., (1) likelihood of success on the merits of the underlying litigation, (2) whether irreparable harm is likely if the injunction is not granted, (3) the balance of hardships as between the litigants, and (4) factors of the public interest.”); H.H. Robertson Co. v. United Steel Deck, Inc., 820 F.2d 384, 387–88 (Fed. Cir. 1987). 53. Oakley, 316 F.3d at 1339; Sandoz, 544 F.3d at 1364 (“The correct standard is not whether a substantial question has been raised, but whether the patentee is likely to succeed on the merits, upon application of the standards of proof that will prevail at trial.”).

Patent Evaluations and Opinions for Avoiding Preliminary Injunctions requires the patentee to prove that the accused device contains each limitation of the asserted claim(s).” (citations omitted)); Ortho Pharm. Corp. v. Smith, 959 F.2d 936, 942 (Fed. Cir. 1992) (concluding that all grounds of invalidity must be evaluated against individual claims, as required by the plain language of 35 U.S.C. § 282 (1994)). Therefore, in cases involving multiple patent claims, to demonstrate a likelihood of success on the merits, the patentee must demonstrate that it will likely prove infringement of one or more claims of the patentsin-suit, and that at least one of those same allegedly infringed claims will also likely withstand the validity challenges presented by the accused infringer. . . . It is well settled that an infringement analysis involves two steps: the claim scope is first determined, and then the properly construed claim is compared with the accused device to determine whether all of the claim limitations are present either literally or by a substantial equivalent. See, e.g., Young Dental Mfg. Co. v. Q3 Special Prods., Inc., 112 F.3d 1137, 1141 (Fed. Cir. 1997). Conceptually, the first step of an invalidity analysis based on anticipation and/or obviousness in view of prior art references is no different from that of an infringement analysis. “It is elementary in patent law that, in determining whether a patent is valid and, if valid, infringed, the first step is to determine the meaning and scope of each claim in suit.” Lemelson v. Gen. Mills, Inc., 968 F.2d 1202, 1206 (Fed. Cir. 1992). “A claim must be construed before determining its validity just as it is first construed before deciding infringement.” Markman v. Westview Instruments, Inc., 52 F.3d 967, 996 n.7 (Fed. Cir. 1995) (Mayer, J., concurring), aff ’d, 517 U.S. 370, 134 L. Ed. 2d 577, 116 S. Ct. 1384 (1996). Only when a claim is properly understood can a determination be made whether the claim “reads on” an accused device or method, or whether the prior art anticipates and/or renders obvious the claimed invention. See id. Because the claims of a patent measure the invention at issue, the claims must be interpreted and given the same meaning for purposes of both validity and infringement analyses. See SmithKline Diagnostics, Inc. v. Helena Labs. Corp., 859 F.2d 878, 882 (Fed. Cir. 1988). “A patent may not, like a ‘nose of wax,’ be twisted one way to avoid anticipation and another to find infringement.” Sterner Lighting, Inc. v. Allied Elec. Supply, Inc., 431 F.2d 539, 544 (5th Cir. 1970) (citing White v. Dunbar, 119 U.S. 47, 51, 30 L. Ed. 303, 7 S. Ct. 72 (1886)). The court must properly interpret the claims, because an improper claim construction may distort the infringement and validity analyses. See Bausch & Lomb, Inc. v. Barnes-Hind/ Hydrocurve, Inc., 796 F.2d 443, 450 (Fed. Cir. 1986).54

Therefore, one of the reasons that an accused infringer should obtain an opinion of trial counsel of patent noninfringement and/or invalidity is so that the party can quickly act to attempt to avoid a preliminary injunction by

54. Amazon.com, Inc. v. Barnesandnoble.com, Inc., 239 F.3d 1343, 1351 (Fed. Cir. 2001); Sandoz, 544 F.3d at 1364.

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showing that the patentee is unlikely to succeed on the merits (due to noninfringement, invalidity, or both) of the patent(s)-in-suit. Additionally, it remains important to remember that, if possible, opinions of trial counsel of noninfringement and/or invalidity should be kept separate from opinions of noninfringement and/or invalidity by opinion counsel, especially regarding opinions of noninfringement and/or invalidity issued prior to any potentially infringing activities and/or prior to an infringement suit. This is because, as discussed in detail in Chapter 24 (waiver), in In re Seagate, the Federal Circuit held en banc that as long as trial counsel and opinion counsel are separate, “as a general proposition . . . asserting the advice of counsel defense and disclosing opinions of opinion counsel do not constitute waiver of the attorney-client privilege for communications with trial counsel,” and “as a general proposition, relying on opinion counsel’s work product does not waive work product immunity with respect to trial counsel.”55 Further, the en banc Seagate Federal Circuit had the following comments about opinions of noninfringement and/or invalidity as they relate to prelitigation conduct, post-litigation conduct, and evidence for obtaining, or avoiding, a preliminary injunction: Further outweighing any benefit of extending waiver to trial counsel is the realization that in ordinary circumstances, willfulness will depend on an infringer’s prelitigation conduct. It is certainly true that patent infringement is an ongoing offense that can continue after litigation has commenced. However, when a complaint is filed, a patentee must have a good faith basis for alleging willful infringement. Fed. R. Civ. Pro. 8, 11(b). So a willfulness claim asserted in the original complaint must necessarily be grounded exclusively in the accused infringer’s pre-filing conduct. By contrast, when an accused infringer’s postfiling conduct is reckless, a patentee can move for a preliminary injunction, which generally provides an adequate remedy for combating post-filing willful infringement. See 35 U.S.C. § 283; Amazon.com, Inc. v. Barnesandnoble.com, Inc., 239 F.3d 1343, 1350 (Fed. Cir. 2001). A patentee who does not attempt to stop an accused infringer’s activities in this manner should not be allowed to accrue enhanced damages based solely on the infringer’s post-filing conduct. Similarly, if a patentee attempts to secure injunctive relief but fails, it is likely the infringement did not rise to the level of recklessness. We fully recognize that an accused infringer may avoid a preliminary injunction by showing only a substantial question as to invalidity, as opposed to the higher clear and convincing standard required to prevail on the merits. Amazon. com, 239 F.3d at 1359 (“Vulnerability is the issue at the preliminary injunction stage, while validity is the issue at trial. The showing of a substantial question as to invalidity thus requires less proof than the clear and convincing showing necessary to establish invalidity itself.”). However, this lessened showing simply

55. In re Seagate Tech, L.L.C., 497 F.3d 1360, 1374, 1376 (Fed. Cir. 2007) (en banc).

Patent Evaluations and Opinions for Readiness in “Rocket Docket” 519 accords with the requirement that recklessness must be shown to recover enhanced damages. A substantial question about invalidity or infringement is likely sufficient not only to avoid a preliminary injunction, but also a charge of willfulness based on post-filing conduct. We also recognize that in some cases a patentee may be denied a preliminary injunction despite establishing a likelihood of success on the merits, such as when the remaining factors are considered and balanced. In that event, whether a willfulness claim based on conduct occurring solely after litigation began is sustainable will depend on the facts of each case.56

V. Patent Evaluations and Opinions for Readiness in “Rocket Docket” Jurisdictions and ITC Investigations So-called “rocket docket” federal district courts and International Trade Commission (“ITC”) Investigations each present venues in which an unprepared accused infringer can face hardship due to the speed of patent infringement proceedings. Where infringement actions may be possible in these venues, it is particularly important for potential infringers to be prepared before beginning any activities that could potentially infringe any third party patents and before being accused of patent infringement. This includes having opinions of noninfringement and/or invalidity on potentially infringed third party patents before beginning any potentially infringing activities and before any third party patents may be asserted in these jurisdictions.

A. “Rocket Docket” Jurisdictions Patent “rocket docket” federal district court jurisdictions are known for their rapid pace and short time-to-trial statistics for patent infringement actions. Currently, the Eastern District of Virginia and the Western District of Wisconsin have the shortest time-to-trial statistics for patent infringement actions, with both jurisdictions having median time-to-trial statistics of less than one year.57 This compares with an overall median time-to-trial of over two years for all federal jurisdictions.58 Clearly, the readiness of a potentially infringing party sued in one of these rapid-paced jurisdictions may have a significant affect on the case. Indeed,

56. Id. at 1374. 57. See PricewaterhouseCoopers 2008 Patent Litigation Study (0.88 years for the Eastern District of Virginia, 0.91 years for the Western District of Wisconsin). 58. Id.


patent holders generally enjoy statistically higher success rates as time-to-trial lengths decrease.59 Therefore, the likelihood of being sued for patent infringement in a “rocket docket” jurisdiction provides yet another reason that a potential infringer of third party patents should obtain early opinions of counsel of noninfringement and/or invalidity. In such cases, these opinions may not only help a potential infringer avoid a finding of willful infringement, but may also provide a valuable head start on defense should suit be filed in a “rocket docket” jurisdiction.60

B. ITC Patent Infringement Investigations ITC patent infringement investigations are patent infringement investigations brought by the ITC, a quasi-judicial independent federal agency responsible for conducting investigations of matters related to U.S. trade.61 Patent infringement actions are brought by the ITC under Section 337, as amended, of the Tariff Act of 1930 (19 U.S.C. § 1337).62 ITC investigations differ from patent infringement actions brought in U.S. district courts in many ways. For example:63 (a) the proceedings are heard by an administrative law judge, as opposed to a federal district court judge; (b) the ITC will not hear counterclaims such as patent invalidity;64 (c) only injunctive relief is available,65 as opposed to injunctive relief and monetary damages that are available in federal court; (d) there are three parties to an ITC investigation: the party filing the complaint with the ITC (the complainant), the party or parties accused of importing the infringing devices (the respondents), and ITC investigative staff attorneys, who represent the public interest and will take a position on the issues; (e) the complainant must be a U.S. domestic industry; (f) there are no juries in ITC investigations; (g) personal jurisdiction over the respondents is not necessary as the ITC has in rem jurisdiction over the imported products themselves; and (h) an infringement action may be brought in U.S. district court at the same time that an ITC investigation is proceeding.

59. Id. (with the exception of extremely long (i.e., greater than four years) time-to-trial lengths). 60. However, for the reasons discussed above and in Chapter 24 (waiver), to the extent possible, caution should be used to separate opinion counsel from trial counsel to avoid waiver of attorney-client privilege and work product immunity associated with pretrial opinions of noninfringement and/or invalidity. 61. See http://www.usitc.gov/. 62. 19 U.S.C.S. § 1337 (2009). 63. See http://www.usitc.gov/. 64. Id. (Counterclaims for patent invalidity may be brought by the accused infringer. However, they must be removed to federal court and cannot delay the ITC investigation.). 65. Id. (For example, exclusion orders barring importation into the U.S. of infringing items, enforced by U.S. Customs & Border Protection.).

Practice Points

The two most significant differences between federal court patent infringement actions and ITC infringement investigations regarding patent evaluations and opinions are:66 (a) ITC proceedings move much faster than most federal patent infringement lawsuits, with a typical ITC investigation taking 12–15 months from initiation to completion, as compared with a median time-to-trial of more than two years for actions brought in federal courts;67 and (b) the ITC complaint is a fact pleading that must provide a detailed showing of how the accused article infringes a valid and enforceable U.S. patent, as opposed to a simple notice pleading in federal court. For potential infringers, the risks and potential hardships brought by the fast pace of ITC proceedings are similar to those discussed above for infringement lawsuits brought in “rocket docket” federal courts. The readiness of a potentially infringing party charged with patent infringement in an ITC investigation may have a significant effect on the case. Therefore, the likelihood of a potentially infringing party being charged with patent infringement in an ITC investigation68 provides still another reason that potential infringers of third party patents should obtain early opinions of counsel of noninfringement and/or invalidity. In such cases, these opinions may not only help a potential infringer avoid a finding of willful infringement if sued in federal court, but may also provide a valuable head start on defense should an ITC patent infringement investigation be initiated.69

VI. Practice Points A. Prefiling Infringement Evaluations and Opinions Should Be Done to Comply with Rule 11 and Section 285 Noninfringement and/or invalidity evaluations and opinions must be done on third party patents challenged in declaratory judgment actions and in ANDA filings and Paragraph IV certifications. The evaluations and opinions must be done before filing the declaratory judgment action or ANDA and certification. Further, they must comport with the standards for objectively

66. Id. 67. See PricewaterhouseCoopers 2008 Patent Litigation. 68. Of course, if the potential infringer does not import (or indirectly infringe via importation) potentially infringing products into the United States, it cannot be the subject of an ITC investigation. 69. However, for the reasons discussed above and in Chapter 24 (waiver), to the extent possible, caution should be used to separate opinion counsel from trial counsel to avoid waiver of attorney-client privilege and work product immunity associated with pretrial opinions of noninfringement and/or invalidity.

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reasonable and competent evaluations and opinions. This includes objective claim construction based on the intrinsic—and if relevant, extrinsic—evidence, and application of the construed claims against the potentially infringing product or process. Keep in mind that defenses such as noninfringement and invalidity also require objectively reasonable compliance with Rule 11 and Section 285.

B. ANDA Paragraph IV Certification Requires a Competent Noninfringement and/or Invalidity Evaluation and Opinion An ANDA Paragraph IV certification requires a complete and objectively competent noninfringement and/or invalidity evaluation and opinion. This includes claim construction based on the intrinsic—and if relevant, extrinsic— evidence, comparison of the construed claims with the proposed generic drug for noninfringement, and/or comparison of the construed claims with the prior art and/or specification for invalidity. The Hatch-Waxman Act does not provide a private right of action for a name brand, pioneer drug owner to challenge the sufficiency of an ANDA Paragraph IV certification. Additionally, the mere filing of an ANDA is not sufficient to trigger attorney’s fees under Section 285. However, a court may award attorney’s fees to the name brand drug patent holder if an ANDA Paragraph IV certification is baseless and there is misconduct by the ANDA applicant during infringement litigation.

C. A Noninfringement and/or Invalidity Opinion May Be Used to Avoid a Preliminary Injunction—But Try to Retain Separation of Opinion Counsel and Trial Counsel In order to obtain a preliminary injunction, a patent holder in an infringement action must show a reasonable likelihood of success on the merits. An opinion of patent noninfringement and/or invalidity may be used to attempt to avoid a preliminary injunction by demonstrating that the patentee is unlikely to succeed on the merits, due to noninfringement, invalidity, or both of the patent(s)-in-suit. Such an opinion should follow the requirements for any objectively reasonable opinion on noninfringement and/or invalidity. However, if possible it remains important to keep opinions of trial counsel of noninfringement and/or invalidity separate from opinions of noninfringement and/or invalidity by opinion counsel, especially regarding opinions of noninfringement and/or invalidity issued prior to beginning any potentially infringing activities and/or prior to filing an infringement suit. As discussed in detail in Chapter 24 (waiver), in Seagate, the Federal Circuit held en banc

Practice Points

that as long as trial counsel and opinion counsel are separate, “as a general proposition . . . asserting the advice of counsel defense and disclosing opinions of opinion counsel do not constitute waiver of the attorney-client privilege for communications with trial counsel,” and “as a general proposition, relying on opinion counsel’s work product does not waive work product immunity with respect to trial counsel.”70

D. Beware of, and Be Prepared for, “Rocket Docket” Jurisdictions and ITC Investigations Be aware of the possibility of being sued for patent infringement in a “rocket docket” jurisdiction and/or in an ITC investigation. In both cases (which can occur together), the pace of the litigation is fast with little time for the accused infringer to mount and prosecute an effective defense. Therefore, the likelihood of being sued in a “rocket docket” jurisdiction and/or in an ITC investigation provides yet another reason that a potential infringer of third party patents should obtain early opinions of counsel of noninfringement and/or invalidity. In such cases, these opinions may not only help a potential infringer avoid a finding of willful infringement, but may also provide a valuable head start on defense should suit be filed in a “rocket docket” jurisdiction or via an ITC investigation. However, for the reasons discussed above and in Chapter 24 (waiver), to the extent possible, caution should be used to separate opinion counsel from trial counsel to avoid waiver of attorney-client privilege, and work product immunity associated with opinions of noninfringement and/or invalidity.


523


CHAP T ER

15 Evaluating and Opining on Third Party Patent Rights Prefiling Evaluations and Opinions for Ex Parte and Inter Partes Reexamination and Other Post-Grant Patent Challenges

I. Reexamination

527

II. Ex Parte Reexamination

528

A. Role of Patent Evaluations and Opinions of Third Party Patents in Ex Parte Reexamination III. Inter Partes Reexamination A. Role of Patent Evaluations and Opinions of Third Party Patents in Inter Partes Reexamination IV. Citation of Prior Art

535 537 540 542

A. Role of Patent Evaluations and Opinions for Citing Art Under Section 301 V. Coordination of Post-Grant Proceedings in Related Non-U.S. Patents

544 545

VI. Citation of Court Decisions

546


547

A. Prefiling Infringement Evaluations and Opinions Should Be Done Prior to Requesting Ex Parte or Inter Partes Reexamination

547

B. Be Aware of the Differences Between Ex Parte and Inter Partes Reexamination

548

C. Reexamination Must Be Based on Documentary Prior Art, but May Also Include, in Conjunction with Documentary Prior Art, Admissions by the Patentee in Prosecution or Court That Are Related to Other Bases for Invalidity

548

525

526

Chapter 15 Evaluating and Opining on Third Party Patent Rights D. Remember That Prior Art May Be Cited in the Prosecution History of an Issued Patent Without Requesting a Reexamination, but Use Caution

549

E. It Is Important to Coordinate U.S. and Non-U.S. Post-Grant Challenges to Third Party Patents

550

F. Remember to Cite Favorable Court Decisions in the Prosecution History of Third Party U.S. Patents of Interest

550

Reexamination 527

Usage Note: As discussed in this chapter, challenging third party patents through ex parte and inter partes reexamination and other post-grant patent challenges requires careful prefiling patent evaluations and opinions. These evaluations and opinions require at least invalidity analyses, including evaluation of prior art, claim construction, and application of prior art to construed claims. Other chapters of relevance to this topic include Chapters 2–10 (patent law principles including claim construction and patent validity).

I. Reexamination Reexaminations are procedures conducted in and by the U.S. Patent Office in which the Patent Office reexamines the patentability of issued patents when documentary prior art raises a substantial new question of patentability of at least one claim. As Congress explained when reexaminations were first legislated in 1980: This new procedure will permit any party to petition the patent office to review the efficacy of a patent, subsequent to its issuance, on the basis of new information about preexisting technology which may have escaped review at the time of the initial examination of the patent application. Reexamination will permit efficient resolution of questions about the validity of issued patents without recourse to expensive and lengthy infringement litigation. This, in turn, will promote industrial innovation by assuring the kind of certainty about patent validity which is a necessary ingredient of sound investment decisions. The cost incurred in defensive patent litigation sometimes reaches $250,000 for each party, an impossible burden for many smaller firms. The result is a chilling effect on those businesses and independent inventors who have repeatedly demonstrated their ability to successfully innovate and develop new products. A new patent reexamination procedure is needed to permit the owner of a patent to have the validity of his patent tested in the patent office where the most expert opinions exist and at a much reduced cost. Patent office reexamination will greatly reduce, if not end, the threat of legal costs being used to ‘blackmail’ such holders into allowing patent infringements or being forced to license their patents for nominal fees. The reexamination of issued patents could be conducted with a fraction of the time and cost of formal legal proceedings and would help restore confidence in the effectiveness of our patent system.1

1. H.R. Rep. No. 96-1307 at 3–4.


Therefore, where a party has documentary prior art that raises a substantial new question of patentability of at least one claim of an issued patent, the party may request that the U.S. Patent Office reexamine the issued patent to determine whether the patent is valid. The requesting party may be the patentee or a third party. If the patent issued from an original patent application filed on or after November 29, 1999, a third party may request either an ex parte or an inter partes reexamination. Only ex parte reexaminations are possible for patents issuing from original applications filed before November 29, 1999. Inter partes reexaminations allow the requesting party to participate in the reexamination process, which is not possible in ex parte reexaminations. However, participation in inter partes reexaminations establishes certain estoppel issues (particularly for the requesting party) that can affect the parties in related challenges to the patent (e.g., in related litigation or the ability to initiate a subsequent reexaminations of the patent). Further, reexamination requests may be made during or prior to patent infringement litigation. This raises issues including whether a court will stay litigation pending outcome of reexamination.

II. Ex Parte Reexamination Ex parte reexamination is distinguished from inter partes reexamination (discussed below) primarily—but not solely—by the fact that a third party requester does not have an opportunity to participate in ex parte reexamination. A third party may request an ex parte reexamination by submitting documentary prior art to the U.S. Patent Office that raises a substantial new issue of patentability of at least one claim of an issued and enforceable U.S. patent. However, after the initial stages of the reexamination are complete, the reexamination process proceeds ex parte—that is, solely between the patentee and the U.S. Patent Office.2 Therefore, once a third party initiates an ex parte reexamination, that party has no further say in the process.3 This can be advantageous for the patentee. For example, without the ability to participate in the reexamination, it is not possible for the third party requester to alert

2. Section 304 provides that if the Director Orders an ex parte Reexamination, the patent owner may file a Statement in response to the Request for Reexamination, including comments addressing the substantial new issue of patentability and amendments to the claims. If the patent owner files such a Statement, the third party requester may file a Reply in response. However, this is the final time that the third party requester may participate in the ex parte reexamination proceedings. See 35 U.S.C.S. § 304 (2009). 3. Id.

Ex Parte Reexamination 529

the Patent Examiner to important patentability issues that the Examiner may otherwise miss. A patentee or third party requests an ex parte reexamination by filing a Request for Reexamination and paying a Reexamination Request Fee.4 A Request for Reexamination may be filed at any time during which an issued patent is enforceable.5 The ex parte reexamination statute provides that, “[a]t the written request of the person citing the prior art, his or her identity will be excluded from the patent file and kept confidential.”6 A reexamination will only be ordered based on documentary prior art such as U.S. patents and printed publications under 35 U.S.C. § 102(b).7 Further, a Request for Reexamination must raise a “substantial new question of patentability affecting [at least one] claim of the patent concerned.”8 The requirement that the Request raise “a substantial new question of patentability” does not necessarily mean that prior art considered by the Patent Office in examining the subject patent cannot be relied upon in a Request for Reexamination.9 As explained by the Federal Circuit: The PTO, however, may only grant a reexamination request if it determines that “a substantial new question of patentability affecting any claim of the patent concerned is raised by the request.” Section 303(a) now mandates that “the existence of a substantial new question of patentability is not precluded by the fact that a patent or printed publication was previously cited by or to the Office or considered by the Office.” Thus, under § 303(a) as amended, a reference may present a substantial new question even if the examiner considered or cited a reference for one purpose in earlier proceedings. Nothing in the statute creates an exception to this rule for references considered in the context of a rejection of prior claims. . . . The 2002 amendment removes the focus of the new question inquiry from whether the reference was previously considered, and returns it to whether the

4. 35 U.S.C.S. § 302 (2009). 5. 21 C.F.R. § 1.501 (2009) (A Request for Reexamination may be filed “[a]t any time during the enforceability of a patent. . . .”); M.P.E.P. § 2204 (8th ed., vol. 2, 2008) (“The period of enforceability is the length of the term of the patent plus the 6 years under the statute of limitations for bringing an infringement action (35 U.S.C. 286). In addition, if litigation is instituted within the period of the statute of limitations, citations may be submitted after the statute of limitations has expired, as long as the patent is still enforceable against someone.”). 6. 35 U.S.C.S. § 301 (2009). 7. 35 U.S.C.S. § 303 (2009); Quad Envtl. Techs. Corp. v. Union Sanitary Dist., 946 F.2d 870, 875 (Fed. Cir. 1991) (“[Q]uestions of public use and on sale were explicitly excluded by statute from those issues on which reexamination could be obtained.”). 8. 35 U.S.C.S. § 303 (2009). 9. Id. (“The existence of a substantial new question of patentability is not precluded by the fact that a patent or printed publication was previously cited by or to the Office or considered by the Office.”).

530 Chapter 15 Evaluating and Opining on Third Party Patent Rights particular question of patentability presented by the reference in reexamination was previously evaluated by the PTO. As was true before the amendment, an “argument already decided by the Office, whether during the original examination or an earlier reexamination” cannot raise a new question of patentability. H.R. Rep. No. 96-1307; see also H.R. Rep. No. 107-120, at 3 (explaining that the amendment did not diminish the “substantial new question requirement” and that “[t]he issue raised must be more than just questioning the judgment of the examiner.”). As we explained in In re Recreative Technologies Corp., the substantial new question requirement “guard[s] against simply repeating the prior examination on the same issues and arguments” and bars “a second examination, on the identical ground that had previously been raised and overcome.” 83 F.3d at 1396–97. As we recognized even in In re Portola Packaging, a single reference might, alone or in combination, create multiple possible grounds of rejection and thus raise more than one “question of patentability.”10

Additionally, claims under reexamination by the U.S. Patent Office, as with claims under reissue and under initial examination by the U.S. Patent Office but unlike claims in litigation, “are to be given their broadest reasonable interpretation consistent with the specification.”11 As indicated by the Federal Circuit: During examination, “claims . . . are to be given their broadest reasonable interpretation consistent with the specification, and . . . claim language should be read in light of the specification as it would be interpreted by one of ordinary skill in the art.” In re Bond, 910 F.2d 831, 833 (Fed. Cir. 1990); accord Bass, 314 F.3d at 577 (“The PTO must apply the broadest reasonable meaning to the claim language, taking into account any definitions presented in the specification.”); In re Cortright, 165 F.3d 1353, 1358 (Fed. Cir. 1999) (“Although the PTO must give claims their broadest reasonable interpretation, this interpretation must be consistent with the one that those skilled in the art would reach.”); Hyatt, 211 F.3d at 1372. The “broadest reasonable construction” rule applies to reexaminations as well as initial examinations. See In re Hiniker Co., 150 F.3d 1362, 1368 (Fed. Cir. 1998); In re Yamamoto, 740 F.2d 1569, 1571 (Fed. Cir. 1984). Giving claims their broadest reasonable construction “serves the public interest by reducing the possibility that claims, finally allowed, will be given broader scope than is justified.” Yamamoto, 740 F.2d at 1571; accord Hyatt, 211 F.3d at 1372; In re Zletz, 893 F.2d 319, 322 (Fed. Cir. 1989) (“An essential purpose of patent examination is to fashion claims that are precise, clear, correct, and unambiguous. Only in this way can uncertainties of claim scope be removed, as much as possible, during the administrative process.”).

10. In re Swanson, 540 F.3d 1368, 1375–76, 1379–80 (Fed. Cir. 2008). 11. In re Bond, 910 F.2d 831, 833 (Fed. Cir. 1990).

Ex Parte Reexamination 531 Construing claims broadly during prosecution is not unfair to the applicant (or, in this case, the patentee), because the applicant has the opportunity to amend the claims to obtain more precise claim coverage. See Yamamoto, 740 F.2d at 1571–72 (“Applicants’ interests are not impaired since they are not foreclosed from obtaining appropriate coverage for their invention with express claim language. An applicant’s ability to amend his claims to avoid cited prior art distinguishes proceedings before the PTO from proceedings in federal district courts on issued patents. When an application is pending in the PTO, the applicant has the ability to correct errors in claim language and adjust the scope of claim protection as needed.”); Zletz, 893 F.2d at 321 (“During patent prosecution when claims can be amended, ambiguities should be recognized, scope and breadth of language explored, and clarification imposed.”); Hyatt, 211 F.3d at 1372.12

Further still, also like reissue and unlike litigation, there is no presumption of validity of the issued patent in a reexamination proceeding: Reexamination provides a mechanism for enabling the Patent and Trademark Office to review and correct an initial examination. Thus reexamination is conducted afresh, without the burdens and presumptions that accompany litigation of an issued patent.13

As explained by the Federal Circuit, unlike in litigation, claims examined in the U.S. Patent Office (whether in original examination or post-issuance examinations such as reissue and reexamination) have no presumption of validity under 35 U.S.C. § 282: The statutory presumption of validity does not apply to patents involved in reissue proceedings before the Board. See 35 U.S.C. § 251, P 3 (1994) (“The provisions . . . relating to applications for patent [which provide no presumption of validity] shall be applicable to applications for reissue.”); see also In re Sneed, 710 F.2d 1544, 1550 n.4 (Fed. Cir. 1983). Reissue proceedings are initiated “whenever [a] patent is, through error without any deceptive intention, deemed wholly or partly inoperative or invalid.” 35 U.S.C. § 251, P 1 (1994). Neither do patents retain the presumption of validity during reexamination proceedings. See 35 U.S.C. § 305 (1994) (“Reexamination will be conducted according to the procedures established for initial examination.”); see also In re Etter, 756 F.2d 852, 858 (Fed. Cir. 1985). Reexaminations arise when a patent or printed publication

12. In re Am. Acad. of Sci. Tech Ctr., 367 F.3d 1359, 1364 (Fed. Cir. 2004). 13. Laitram Corp. v. NEC Corp., 952 F.2d 1357, 1360 (Fed. Cir. 1991) (footnote omitted); In re Etter, 756 F.2d 852, 855–59 (Fed. Cir. 1985) (en banc).

532

Chapter 15 Evaluating and Opining on Third Party Patent Rights raises a “substantial new question of patentability” regarding an issued patent. 35 U.S.C. § 304 (1994).14

As further explained by the court: The statute, 35 U.S.C. § 305, provides that “reexamination will be conducted according to the procedures established for initial examination under the provisions of sections 132 and 133 of this title.” The actual reexamination is conducted ex parte. 37 CFR 1.550(a) (1983). . . . The focus of the limited proceedings under Chapter 30 thus returns essentially to that present in an initial examination, i.e., to a time at which no presumption of validity had been created. ... In a very real sense, the intent underlying reexamination is to “start over” in the PTO with respect to the limited examination areas involved, and to reexamine the claims, and to examine new or amended claims, as they would have been considered if they had been originally examined in light of all of the prior art of record in the reexamination proceeding. That intent is reflected in 35 U.S.C. § 303, which requires the Commissioner to determine whether “a substantial new question of patentability” has been raised, and in 35 U.S.C. § 304, which provides for initiation of reexamination by the Commissioner sua sponte. The intent that reexamination proceedings and court actions involving challenges to validity be distinct and independent is reflected in the legislative history of § 303, which notes that denial of a request for reexamination does not deprive the requestor (if not the patent owner) “of any legal right” to contest validity in subsequent court proceedings. That “legal right” may be exercised as a matter of right, but determination of whether a “substantial new question of patentability” exists, and therefore whether reexamination may be had, is discretionary with the Commissioner, and, as § 303 provides, that determination is final, i.e., not subject to appeal. That a patentee may request reexamination, and has the opportunity in the PTO of distinguishing art newly cited by the examiner, 37 CFR 1.530(c), and may amend his claims under reexamination, 35 U.S.C. § 305, further distinguish reexamination from litigation. It is of no moment that the examiner’s burden of showing a basis for rejection in the examination and reexamination processes is not described in the “clear and convincing” terms applicable under § 282 to a litigant challenging validity of an issued patent. During the examination processes, allowances of claims raise no presumption and may be withdrawn. That one challenging validity in court bears the burden assigned by § 282, that the same party may request reexamination upon submission of art not previously cited, and that, if that art raises a substantial new question of patentability,

14. Bruning v. Hirose, 161 F.3d 681, 685 (Fed. Cir. 1998).

Ex Parte Reexamination 533 the PTO may during reexamination consider the same and new and amended claims in light of that art free of any presumption, are concepts not in conflict. On the contrary, those concepts are but further indication that litigation and reexamination are distinct proceedings, with distinct parties, purposes, procedures, and outcomes. In the former, a litigant who is attacking the validity of a patent bears the burden set forth in § 282. In the latter, an examiner is not attacking the validity of a patent, but is conducting a subjective examination of claims in the light of prior art.15

A U.S. patent may be under ex parte reexamination in the U.S. Patent Office and in litigation in a U.S. court at the same time. The Federal Circuit has held that there is nothing inconsistent with this situation. As explained by the court in Ethicon: The thought that a PTO decision may unnecessarily complicate the litigation and could create an awkward situation if different conclusions are reached overlooks that challenging validity in a court and requesting PTO reexamination “are concepts not in conflict.” Suspension prevents the simplification of litigation that might result from the cancellation, clarification, or limitation of claims, and, even if the reexamination did not lead to claim amendment or cancellation, it could still provide valuable analysis to the district court, see Custom Accessories, Inc. v. Jeffrey-Allan Industries, Inc., 807 F.2d 955, 961 (Fed.Cir. 1986); Control Laser Corp., 705 F.2d at 1342, which it could consider in reaching its determination. The awkwardness presumed to result if the PTO and court reached different conclusions is more apparent than real. The two forums take different approaches in determining invalidity and on the same evidence could quite correctly come to different conclusions. Furthermore, we see nothing untoward about the PTO upholding the validity of a reexamined patent which the district court later finds invalid. This is essentially what occurs when a court finds a patent invalid after the PTO has granted it. Once again, it is important that the district court and the PTO can consider different evidence. Accordingly, different results between the two forums may be entirely reasonable. And, if the district court determines a patent is not invalid, the PTO should continue its reexamination because, of course, the two forums have different standards of proof for determining invalidity. Cf. Stevenson v. Sears, Roebuck & Co., 713 F.2d 705, 710 (Fed.Cir. 1983) (“prior holding of validity [by a court] is not necessarily inconsistent with the subsequent holding of invalidity [by a court]”); Allen Archery, Inc. v. Browning Mfg. Co., 819 F.2d 1087, 1091 (Fed.Cir. 1987) (a party

15. Etter, 756 F.2d at 857–58 (emphasis added).

534 Chapter 15 Evaluating and Opining on Third Party Patent Rights charged with infringement may challenge “the validity of patent claims that were upheld in a prior infringement suit to which it was not a party”).16

As further elaborated by the Federal Circuit in In re Swanson: In PTO examinations and reexaminations, the standard of proof—a preponderance of evidence—is substantially lower than in a civil case, In re Caveney, 761 F.2d 671, 674 (Fed. Cir. 1985); there is no presumption of validity, Etter, 756 F.2d at 856; and the “examiner is not attacking the validity of the patent but is conducting a subjective examination of the claims in light of prior art,” id. at 857– 58. And unlike in district courts, in reexamination proceedings “[c]laims are given ‘their broadest reasonable interpretation, consistent with the specification. . . .’ ” Trans Tex. Holdings, 498 F.3d at 1298 (quoting In re Yamamoto, 740 F.2d 1569, 1571 (Fed. Cir. 1984)). Thus, considering an issue at the district court is not equivalent to the PTO having had the opportunity to consider it. See Ethicon, 849 F.2d at 1427 (“[P]recise duplication of effort does not occur because the PTO and the courts employ different standards of proof when considering validity. . . .”). In Ethicon, we held that because of these differences between reexaminations and court proceedings, the PTO did not have authority to stay a patent reexamination proceeding pending the outcome of a case in a district court. . . . We explained that “the suspension of PTO [reexamination] proceedings does not prevent duplication;” instead, it improperly “precludes access to the forum where there is no presumption of validity.” In reaching this holding, we noted that “if the district court determines a patent is not invalid, the PTO should continue its reexamination because, of course, the two forums have different standards of proof for determining invalidity.”17

Furthermore, collateral estoppel does not normally apply between Patent Office decisions in ex parte reexaminations and court decisions: The doctrine of collateral estoppel does not prevent the PTO from completing the reexamination in this situation. Courts do not find patents “valid,” Environmental Designs, Ltd. v. Union Oil Co., 713 F.2d 693, 699 n.9 (Fed.Cir. 1983), only that the patent challenger did not carry the “burden of establishing invalidity in the particular case before the court” under 35 U.S.C. § 282. Panduit Corp. v. Dennison Mfg. Co., 810 F.2d 1561, 1569 (Fed.Cir. 1987) (emphasis added); accord Shelcore, Inc. v. Durham Industries, Inc., 745 F.2d 621, 627 (Fed. Cir. 1984) (“A patent is not held valid for all purposes but, rather, not invalid on the record

16. Ethicon, Inc. v. Quigg, 849 F.2d 1422, 1428–29 (Fed. Cir. 1988) (footnote omitted, some citations omitted). 17. In re Swanson, 540 F.3d 1368, 1377–78 (Fed. Cir. 2008) (some citations omitted).

Ex Parte Reexamination 535 before the court”). “Thereupon, the patent simply remains valid until another challenger carries the § 282 burden.” Panduit Corp., 810 F.2d at 1570. Accordingly, a court’s decision upholding a patent’s validity is not ordinarily binding on another challenge to the patent’s validity, Stevenson v. Sears, Roebuck & Co., 713 F.2d 705, 710, 711 (Fed.Cir. 1983), in either the courts or the PTO.18

However, “if a court finds a patent invalid, and that decision is either upheld on appeal or not appealed, the PTO may discontinue its reexamination.”19 Staying litigation because of a co-pending reexamination is entirely up to the discretion of the court. As explained by the Federal Circuit: The Supreme Court has long recognized that district courts have broad discretion to manage their dockets, including the power to grant a stay of proceedings. See, e.g., Landis v. N. Am. Co., 299 U.S. 248, 254–55, 57 S. Ct. 163, 81 L. Ed. 153 (1936) (“[T]he power to stay proceedings is incidental to the power inherent in every court to control the disposition of causes on its docket. . . . How this can best be done calls for the exercise of judgment, which must weigh competing interests and maintain an even balance.”). . . . [T]his court ha[s] consistently recognized the inherent power of the district courts to grant a stay pending reexamination of a patent. See, e.g. Gould v. Control Laser Corp., 705 F.2d 1340, 1341 (Fed. Cir. 1983) (noting that “because district courts have broad discretionary powers to control their dockets, stays will not be vacated unless they are immoderate or of an indefinite duration.” (internal quotation marks omitted)); Ethicon, Inc. v. Quigg, 849 F.2d 1422, 1426 (Fed. Cir. 1988) (reviewing legislative history of ex parte reexamination, which stated that the statute lacked language authorizing district courts to grant stays pending reexamination because “ ‘such power already resides with the Court.’ ” (quoting 1980 U.S. Code Cong. & Admin. News at 6463)).20

A. Role of Patent Evaluations and Opinions of Third Party Patents in Ex Parte Reexamination As discussed above, in order to have the Director of the U.S. Patent Office order an ex parte reexamination of an issued U.S. patent, a third party requester must submit a Request for Reexamination that makes the case that documentary prior art (a patent or a printed publication under 35 U.S.C. § 102(b)) raises a “substantial new question of patentability affecting [at least one] claim of

18. Id. at 1492 n.3. 19. Id. at 1492. 20. P&G v. Kraft Foods Global, Inc., 549 F.3d 842, 848–49 (Fed. Cir. 2008).

536


the patent concerned.”21 The requirement that the Request raise “a substantial new question of patentability” does not necessarily mean that the subject prior art must not have been considered by the Patent Office in the examination of the subject patent.22 However, it does mean that the Request must show that the substantial question of patentability was not “‘already decided by the Office, whether during the original examination or an earlier reexamination.’”23 Therefore, in a Request for Reexamination, the requester must show both: (a) why the cited reference raises a substantial question of patentability of at least one claim of the subject patent;24 and (b) that the substantial question of patentability was not previously addressed in the prosecution history of the patent.25 This necessarily requires a complete claim construction, analysis of the prior art, and analysis and opinion of invalidity based on application of the prior art to the construed claims. In the event prior art is being used that has been cited in the prosecution of the patent, it is especially important to review thoroughly the patent’s prosecution history. Then, one should provide with the Request a detailed description of the prosecution history of the patent showing that the substantial new question of patentability raised in the Request was not previously considered. Additionally, the claim construction and invalidity analysis for a Request for Reexamination must take into account two issues that differ in reexamination invalidity analyses and opinions compared with invalidity analyses and opinions for most purposes of this treatise (such as for predicting whether a reasonable court should hold a patent’s claims to be invalid), for reexamination purposes: (a) the claims are to be given their broadest reasonable interpretation consistent with the specification;26 and (b) there is no presumption the claims are valid.27

21. 35 U.S.C.S. § 303 (2009). 22. Id. (“The existence of a substantial new question of patentability is not precluded by the fact that a patent or printed publication was previously cited by or to the Office or considered by the Office.”). 23. Swanson, 540 F.3d at 1380 (quoting H.R. Rep. No. 96-1307). 24. See, e.g., Swanson, 540 F.3d at 1375–76. 25. See, e.g., id. at 1379–80. 26. See, e.g., id. at 1377–78; In re Trans Texas Holdings Corp., 498 F.3d 1290, 1298 (Fed. Cir. 2007); In re Yamaoto, 740 F.2d 1569, 1571 (Fed. Cir. 1984); In re Bond, 910 F.2d 831, 833 (Fed. Cir. 1990); In re Am. Acad. of Sci. Tech Ctr., 367 F.3d 1359, 1364 (Fed. Cir. 2004). 27. See, e.g., Laitram Corp. v. NEC Corp., 952 F.2d 1357, 1360 (Fed. Cir. 1991); In re Etter, 756 F.2d 852, 855–59 (Fed. Cir. 1985) (en banc); Bruning v. Hirose, 161 F.3d 681, 685 (Fed. Cir. 1998).

Inter Partes Reexamination 537

III. Inter Partes Reexamination Inter partes reexamination is distinguished from ex parte reexamination primarily, but not exclusively, by the facts that: (a) in inter partes reexamination, a third party requester has the opportunity to participate in the entire reexamination process,28 including in appeals through the Federal Circuit;29 and (b) estoppel issues apply (especially to the third party requester) that can substantially affect related litigation and subsequent reexamination.30 Further, inter partes reexamination is only available for patents issuing from original patent applications filed on or before November 29, 1999.31 In many aspects, inter partes reexamination proceedings are similar to ex parte reexamination proceedings, especially from the perspective of evaluating and opining on patents. For example, in order to have the U.S. Patent Office Director order an inter partes reexamination, a third party requester must file a Request for Reexamination and show that documentary prior art [patents or printed publications under 35 U.S.C. § 102(b)]32 raise a “substantial new question of patentability affecting [at least one] claim of the patent concerned.”33 As with Section 303 for ex parte reexamination discussed above, Section 312 for inter pates reexamination provides that “[t]he existence of a substantial new question of patentability is not precluded by the fact that a patent or printed publication was previously cited by or to the Office or considered by the Office.”34 While the Federal Circuit has not addressed exactly what is meant by this language of Section 312 for inter partes reexamination, as discussed above, in Swanson, the Federal Circuit held that the identical language of Section 303 for ex parte reexamination means that the Request for Reexamination must show that the substantial new question of patentability was not “‘already decided by the Office, whether during the original examination or an earlier reexamination.’”35 Therefore, based on the identical language of Sections 303 and 312, in view of Swanson it appears likely that a court will hold that Section 312 requires that a Request for inter partes Reexamination must show that the substantial new question of patentability based on the prior art was not already decided by the U.S. Patent Office (whether during the original examination or an earlier reexamination). In addition, for similar reasons, it appears likely that for inter partes reexamination, unlike in litigation, there is no presumption of validity of the

28. 29. 30. 31. 32. 33. 34. 35.

35 U.S.C.S. § 314 (2009). 35 U.S.C.S. § 315 (2009). 35 U.S.C.S. § 317 (2009). 37 C.F.R. § 1.913 (2009). 35 U.S.C.S. § 311 (2009). 35 U.S.C.S. § 312 (2009). Id. In re Swanson, 540 F.3d 1368, 1380 (Fed. Cir. 2008) (quoting H.R. Rep. No. 96-1307).


issued patent.36 Still further, and for similar reasons, it also appears likely that for inter partes reexamination (and unlike in litigation) claims are given their broadest reasonable interpretation consistent with the specification.37 However, inter partes reexamination differs significantly from ex parte reexamination regarding the estoppel effect that decisions in reexamination and litigation have on related reexaminations and litigation, especially for the Requesting party. For example, Section 315(c) provides: Civil Action. A third-party requester whose request for an inter partes reexamination results in an order under section 313 [35 U.S.C. § 313] is estopped from asserting at a later time, in any civil action arising in whole or in part under section 1338 of title 28, the invalidity of any claim finally determined to be valid and patentable on any ground which the third-party requester raised or could have raised during the inter partes reexamination proceedings. This subsection does not prevent the assertion of invalidity based on newly discovered prior art unavailable to the third-party requester and the Patent and Trademark Office at the time of the inter partes reexamination proceedings.38

Further, Section 317 provides: Final decision. Once a final decision has been entered against a party in a civil action arising in whole or in part under section 1338 of title 28, that the party has not sustained its burden of proving the invalidity of any patent claim in suit or if a final decision in an inter partes reexamination proceeding instituted by a third-party requester is favorable to the patentability of any original or proposed amended or new claim of the patent, then neither that party nor its privies may thereafter request an inter partes reexamination of any such patent claim on the basis of issues which that party or its privies raised or could have raised in such civil action or inter partes reexamination proceeding, and an inter partes reexamination requested by that party or its privies on the basis of such issues may not thereafter be maintained by the Office, notwithstanding any other provision of this chapter [35 U.S.C. §§ 311 et seq.]. This subsection does not prevent the assertion of invalidity based on newly discovered prior art

36. See Laitram Corp. v. NEC Corp., 952 F.2d 1357, 1360 (Fed. Cir. 1991); In re Etter, 756 F.2d 852, 855–59 (Fed. Cir. 1985) (en banc); Bruning v. Hirose, 161 F.3d 681, 685 (Fed. Cir. 1998) (all holding that there is no presumption of validity for a patent in ex parte reexamination). 37. See Swanson, 540 F.3d at 1377–78; In re Trans Texas Holdings Corp., 498 F.3d 1290, 1298 (Fed. Cir. 2007); In re Yamaoto, 740 F.2d 1569, 1571 (Fed. Cir. 1984); In re Bond, 910 F.2d 831, 833 (Fed. Cir. 1990); Am. Acad. of Sci. Tech Ctr., 367 F.3d at 1364 (all holding that in ex parte reexamination, unlike in litigation, claims are to be given their broadest reasonable interpretation). 38. 35 U.S.C.S. § 315(c) (2009) (emphasis in original).

Inter Partes Reexamination 539 unavailable to the third-party requester and the Patent and Trademark Office at the time of the inter partes reexamination proceedings.39

In addition, Section 317(a) provides: Order for reexamination. Notwithstanding any provision of this chapter [35 U.S.C. §§ 311 et seq.], once an order for inter partes reexamination of a patent has been issued under section 313 [35 U.S.C. § 313], neither the third-party requester nor its privies[,] may file a subsequent request for inter partes reexamination of the patent until an inter partes reexamination certificate is issued and published under section 316 [35 U.S.C. § 316], unless authorized by the Director.40

On the other hand, a stay of litigation because of a co-pending reexamination for inter partes reexamination is similar to that for ex parte reexamination: either the requester or the patent owner may request a litigation stay, with the decision being left the discretion of the court. As explained by the Federal Circuit: Section 318 reads: Once an order for inter partes reexamination of a patent has been issued under section 313, the patent owner may obtain a stay of any pending litigation which involves an issue of patentability of any claims of the patent which are the subject of the inter partes reexamination order, unless the court before which such litigation is pending determines that a stay would not serve the interests of justice. 35 U.S.C. § 318 (emphasis added). P&G argues that the statute only authorizes a stay upon request of the patentee and, therefore, that the court lacked the authority to stay the case on Kraft’s (the accused infringer’s) request. The district court rejected this argument, reasoning that “[a]lthough true that § 318 does not expressly provide for an automatic stay of parallel district court proceedings, the statute in no way impacts the inherent powers of the court to control the litigation before it, and to grant a stay in the interests of justice when so required.” We agree with the district court. . . . The Supreme Court has long recognized that district courts have broad discretion to manage their dockets, including the power to grant a stay of proceedings. . . . And by the time § 318 was enacted in 1999, this court had consistently recognized the inherent power of the district courts to grant a stay

39. 35 U.S.C.S. § 317(b) (2009) (emphasis in original). 40. 35 U.S.C.S. § 317(a) (2009) (emphasis in original).

540 Chapter 15 Evaluating and Opining on Third Party Patent Rights pending reexamination of a patent. . . . Against this backdrop of existing law, § 318 must be read as enabling a patentee to obtain a stay of district court proceedings more readily than it could otherwise when its patent is subjected to inter partes reexamination by the PTO. A holding to the contrary would rest on a conclusion that Congress intended to strip district courts of the full scope of their inherent power with no mention of that effect. Thus, when an order granting inter partes reexamination issues, a patentee may move for a stay under § 318, but the defendant may nevertheless seek a stay under the district court’s inherent power.41

A. Role of Patent Evaluations and Opinions of Third Party Patents in Inter Partes Reexamination The role of evaluating and opining on invalidity of a third party patent challenged in inter partes reexamination is similar to that for challenging a third party patent in ex parte reexamination. However, because of the estoppel issues unique to in inter partes reexamination (especially for the requester), careful analysis and opining on the validity of the subject patent prior to filing a request for inter partes reexamination is of the utmost importance. As discussed above, in order for the Director of the U.S. Patent Office to order inter partes reexamination of an issued U.S. patent, a third party requester must submit a Request for Reexamination that makes the case that documentary prior art [a patent or a printed publication under 35 U.S.C. § 102(b)]42 raises a “substantial new question of patentability affecting [at least one] claim of the patent concerned.”43 The requirement that the Request raise “a substantial new question of patentability” does not necessarily mean that the subject prior art must not have been considered by the Patent Office in examining the subject patent.44 However, it likely does mean that the Request must show that the substantial question of patentability was not already decided by the U.S. Patent Office, whether during the original examination or an earlier reexamination.45

41. P&G v. Kraft Foods Global, Inc., 549 F.3d 842, 848–49 (Fed. Cir. 2008) (some citations omitted). 42. 35 U.S.C.S. § 311 (2009). 43. 35 U.S.C.S. § 312 (2009). 44. Id. (“The existence of a substantial new question of patentability is not precluded by the fact that a patent or printed publication was previously cited by or to the Office or considered by the Office.”). 45. See In re Swanson, 540 F.3d 1368, 1375–76 (Fed. Cir. 2008) (holding that for ex parte reexamination, a substantial new question of patentability may be based on a prior art reference considered by the Patent Office in the prosecution history of the subject patent, provided

Inter Partes Reexamination 541

Therefore, in a Request for inter partes Reexamination, the requester must show both: (a) why the cited reference raises a substantial question of patentability of at least one claim of the subject patent;46 and (b) that the substantial question of patentability was not previously addressed in the prosecution history of the patent.47 This necessarily requires a complete claim construction, analysis of the prior art, and analysis and opinion of invalidity based on application of the prior art to the construed claims. In the event prior art is being used that has been cited in the prosecution of the patent, it is especially important to thoroughly review the patent’s prosecution history. One must then provide, with the Request, a detailed description of the prosecution history of the patent showing that the substantial new question of patentability raised in the Request was not previously considered. Additionally, the claim construction and invalidity analysis for a Request for Reexamination must take into account two issues that differ in reexamination invalidity analyses and opinions as compared with invalidity analyses and opinions for most purposes of this treatise (such as for predicting whether a reasonable court should hold a patent’s claims to be invalid), for reexamination purposes: (a) the claims are to be given their broadest reasonable interpretation consistent with the specification;48 and (b) there is no presumption that the claims are valid.49 Again, because of the significant estoppel issues inherent with inter partes reexamination as opposed to ex parte reexamination (especially for the requester), careful prefiling evaluation and opining of invalidity is of the utmost importance when considering challenging a third party’s patent by a request for inter partes reexamination.

46. 47.

48.

49.

that the specific issue raised in the Request was not considered by the Patent Office in the prosecution history of the patent). 35 U.S.C.S. § 312 (2009). See Swanson, 540 F.3d at 1375–76 (holding that for ex parte reexamination, a substantial new question of patentability may be based on a prior art reference considered by the Patent Office in the prosecution history of the subject patent, provided that the specific issue raised in the Request was not considered by the Patent Office in the prosecution history of the patent). See, e.g., id. at 1377–78; In re Trans Texas Holdings Corp., 498 F.3d 1290, 1298 (Fed. Cir. 2007); In re Yamaoto, 740 F.2d 1569, 1571 (Fed. Cir. 1984); In re Bond, 910 F.2d 831, 833 (Fed. Cir. 1990); In re Am. Acad. of Sci. Tech Ctr., 367 F.3d 1359, 1364 (Fed. Cir. 2004) (all holding that in ex parte reexamination, unlike in litigation, claims are to be given their broadest reasonable interpretation). See, e.g., Laitram Corp. v. NEC Corp., 952 F.2d 1357, 1360 (Fed. Cir. 1991); In re Etter, 756 F.2d 852, 855–59 (Fed. Cir. 1985); Bruning v. Hirose, 161 F.3d 681, 685 (Fed. Cir. 1998) (all holding that there is no presumption of validity for a patent in ex parte reexamination).

542


IV. Citation of Prior Art In addition to the citation of prior art in a Request for Reexamination, prior art may also be cited in the prosecution history of a patent without requesting a reexamination. One may do so pursuant to 35 U.S.C. Section 301,50 which provides: Any person at any time may cite to the Office in writing prior art consisting of patents or printed publications which that person believes to have a bearing on the patentability of any claim of a particular patent. If the person explains in writing the pertinency and manner of applying such prior art to at least one claim of the patent, the citation of such prior art and the explanation thereof will become a part of the official file of the patent. At the written request of the person citing the prior art, his or her identity will be excluded from the patent file and kept confidential.51

As provided by Section 301, “any person” may make such a citation. This includes the patent owner and third parties.52 As also provided by Section 301, “[a]t the written request of the person citing the prior art, his or her identity will be excluded from the patent file and kept confidential.”53 While Section 301 states that a citation may be made “at any time,” the Patent Office has construed this to be at any time during enforceability of the subject patent.54 Additionally, as with the prior art references relied upon to Request Reexamination, prior art references in a Section 301 citation request must be documentary prior art only (patents and printed publications under 35 U.S.C. § 102(b)).55 Importantly, it is not sufficient to merely submit a prior art reference. A citation under Section 301 will only become part of the official file history of the patent “[i]f the person explains in writing the pertinency and manner of applying such prior art to at least one claim of the patent. . . .”56 and the Patent Office accepts this assertion. Therefore, the Patent Office substantively examines citations under Section 301 and decides whether the prior art should

50. 51. 52. 53. 54.

35 U.S.C.S. § 301 (2009). Id. Id.; 37 C.F.R. § 1.501 (2009). 35 U.S.C.S. § 301 (2009). See M.P.E.P. § 2204 (8th ed., vol. 2, 2008) (“The period of enforceability is the length of the term of the patent plus the 6 years under the statute of limitations for bringing an infringement action (35 U.S.C. 286). In addition, if litigation is instituted within the period of the statute of limitations, citations may be submitted after the statute of limitations has expired, as long as the patent is still enforceable against someone.”). 55. 35 U.S.C.S. § 301 (2009); for other requirements of a Section 301 citation, such as service on the patent owner, see, e.g., M.P.E.P. §§ 2201–06 (8th Ed., vol. 2, 2008). 56. 35 U.S.C.S. § 301 (2009).

Citation of Prior Art 543

be made of record. If the Patent Office determines that the written explanation is sufficient, both the cited reference and the written explanation are made of record.57 However, the Patent Office cautions that: A prior art citation is limited to the citation of patents and printed publications and an explanation of the pertinency and applicability of the patents and printed publications. This may include an explanation by the patent owner as to how the claims differ from the prior art. It may also include affidavits and declarations. The prior art citation cannot include any issue which is not directed to patents and printed publications. Thus, for example, a prior art citation cannot include a statement as to the claims violating 35 U.S.C. 112, a statement as to the public use of the claimed invention, or a statement as to the conduct of the patent owner. A prior art citation must be directed to patents and printed publications and cannot discuss what the patent owner did, or failed to do, with respect to submitting and/or describing patents and printed publications, because that would be a statement as to the conduct of the patent owner. The citation also should not contain argument and discussion of references previously treated in the prosecution of the invention which matured into the patent or references previously treated in a reexamination proceeding as to the patent. If the prior art citation contains any issue not directed to patents and printed publications, it should not be entered into the patent file, despite the fact that it may otherwise contain a complete submission of patents and printed publications with an explanation of the pertinency and applicability. Rather, the prior art citation should be returned to the sender. . . .58

Additionally, if a reexamination is pending when the art is submitted under Section 301, it will only be made of record during the reexamination if it is submitted by the patent owner or the reexamination requester. Other submissions under Section 301 made during a reexamination will be made of record only upon completion of the reexamination.59 The importance of citing references under Section 301 is that, if accepted by the Patent Office, the art and written reasons become part of the official prosecution history of the subject patent. Therefore, they become intrinsic evidence that may be considered by a court when construing the claims of the subject patent.60

57. 58. 59. 60.

See M.P.E.P. § 2206 (8th ed., vol. 2, 2008). M.P.E.P. § 2205 (8th ed., vol. 2, 2008) (emphasis added). See M.P.E.P. § 2204. See, e.g., Moleculon Res. Corp. v. CBS, Inc., 793 F.2d 1261, 1270 (Fed. Cir. 1986) (holding that written statements accompanying Section 301 citations may be considered in claim construction).


A. Role of Patent Evaluations and Opinions for Citing Art Under Section 301 As discussed above, a citation under Section 301 will only become part of the official file history of the patent “[i]f the person explains in writing the pertinency and manner of applying such prior art to at least one claim of the patent. . . .”61 Additionally, the written explanation for entering the cited prior art “should not contain argument and discussion of references previously treated in the prosecution of the invention which matured into the patent or references previously treated in a reexamination proceeding as to the patent.”62 Thus, preparing a Section 301 citation of prior art that meets the requirements of the U.S. Patent Office for inclusion in the official record of a patent necessarily requires a claim construction of at least one subject claim to which the reference applies, an analysis of the subject prior art, and an analysis and opinion of invalidity based on applying the prior art to the construed claims. Further, it is necessary to review the patent’s prosecution history to be certain that the written reasons submitted with the Section 301 citation request do not repeat arguments and discussions of the prior art previously addressed in the prosecution history. Additionally, although the law is not clear on this issue, because it is the U.S. Patent Office, and not a U.S. court, that is deciding whether the cited reference is pertinent, the written reasons submitted with a citation request under Section 301 should take into account two issues that are likely to differ as between invalidity analyses and opinions decided by the U.S. Patent Office and those decided by U.S. courts: for purposes of complying with Section 301: (a) it is likely that the claims are to be given their broadest reasonable interpretation, consistent with the specification;63 and (b) it is likely that there is no presumption that the claims are valid.64 One of the important reasons for conducting a complete and competent invalidity analysis and opinion prior to citing prior art under Section 301 against a third party’s patent is that the patent owner may also file a Section 301 citation. Therefore, following a third party citation of prior art under Section 301, a patent owner may file a 301 citation on the same art and in its written statement argue as to why the art does not invalidate the claims of the

61. 35 U.S.C.S. § 301 (2009). 62. M.P.E.P. § 2205. 63. Cf. In re Swanson, 540 F.3d 1368, 1375–76, 1379–80 (Fed. Cir. 2008); In re Trans Texas Holdings Corp., 498 F.3d 1290, 1298 (Fed. Cir. 2007); In re Yamaoto, 740 F.2d 1569, 1571 (Fed. Cir. 1984) (all holding that in ex parte reexamination, unlike in litigation, claims are to be given their broadest reasonable interpretation). 64. Cf. Laitram Corp. v. NEC Corp., 952 F.2d 1357, 1360 (Fed. Cir. 1991); In re Etter, 756 F.2d 852, 855–59 (Fed. Cir.) (en banc) (both holding that there is no presumption of validity for a patent in ex parte reexamination).

Coordination of Post-Grant Proceedings in Related Non-U.S. Patents 545

subject patent. The patentee may even submit declaratory evidence (such as a commercial success affidavit) to overcome obviousness of a citation.65 Thus, imprudently citing prior art against a third party’s patent under Section 301 could result in the patentee filing into the intrinsic evidence of the patent what is in effect a rebuttal. This could affect the impact of the original Section 301 citation, as well as create an enhanced burden of proof for asserting invalidity based on the cited prior art in subsequent litigation of the patent’s validity.

V. Coordination of Post-Grant Proceedings in Related Non-U.S. Patents Although this book is directed toward U.S. patents, it is important to coordinate U.S. patent matters with events in related non-U.S. patents. For example, U.S. attorneys should know of—and be kept apprised of—post-grant proceedings (such as oppositions) against non-U.S. third party patents related to third party U.S. patents of interest. For example, opposition proceedings are a common means of challenging third party patents post-issuance in countries other than the United States. Oppositions generally involve a challenge to the patentability of the claims of an issued patent before the governmental agency that issued the patent. These proceedings and their holdings are considered extrinsic evidence for purposes of claim construction of related U.S. patents (see Chapter 2). Nonetheless, events occurring outside the United States may affect related U.S. patents. Therefore, a good practice is for non-U.S. counsel to consult with U.S. counsel prior to initiating post-issuance challenges to third party non-U.S. patents that are related to third party U.S. patents of interest. For example, where a third party U.S. patent is under consideration for a post-grant challenge in the United States, and a related non-U.S. third party patent is under consideration for an opposition, it is generally advantageous for U.S. counsel to discuss its evaluation and opinion of the U.S. patent with non-U.S. counsel, and vice versa. Such intimate coordination of challenges to third party patents in different countries can greatly facilitate success by forging a common attack plan using the best possible prior art and arguments. This may reduce redundancies, control legal fees, and help to avoid inconsistent positions and results. In fact, for these reasons it is generally advisable to obtain opinions of invalidity of all third party U.S. patents that are related to any non-U.S. patents to be challenged abroad, even when challenging the U.S. patent may not be possible or advisable. However, U.S. attorneys should always be mindful that attorneys

65. See M.P.E.P. § 2205.

546


licensed solely in the United States should never evaluate or opine on nonU.S. patents or related issues.

VI. Citation of Court Decisions Section 290 of the U.S. patent statute provides: The clerks of the courts of the United States, within one month after the filing of an action under this title shall give notice thereof in writing to the Director, setting forth so far as known the names and addresses of the parties, name of the inventor, and the designating number of the patent upon which the action has been brought. If any other patent is subsequently included in the action he shall give like notice thereof. Within one month after the decision is rendered or a judgment issued the clerk of the court shall give notice thereof to the Director. The Director shall, on receipt of such notices, enter the same in the file of such patent.66

In addition to the provisions of Section 290, the U.S. Patent Office will also include the following litigation-related materials in the prosecution history of a U.S. patent: The Office will accept at any time from any party for placement in the patent file, submissions of the following: copies of notices of suits, copies of notices regarding other proceedings involving the patent and copies of decisions from litigations or other proceedings involving the patent. The Office will also accept for entry into the patent file other court papers, or papers filed in the court, from litigations or other proceedings involving the patent. The decisions from litigations or other proceedings include final court decisions (even if the decision is still appealable), decisions to vacate, decisions to remand, and decisions as to the merits of the patent claims. Non-merit decisions on motions such as for a new venue, a new trial/discovery date, or sanctions will not be entered into the patent file, and will be expunged from the patent file by closing the appropriate paper if they were entered before discovery of their nature. Further, papers filed in the court from litigations or other proceedings involving the patent will not be entered into the patent file (and will be expunged if already entered) if they provide a party’s arguments, such as a memorandum in support of summary judgment. If the argument has an entry right in the reexamination proceeding, it must be submitted via the vehicle (provision(s) of the rules) that provides for that entry right. It is not required nor is it permitted that parties submit copies of copending reexamination proceedings and applications (which

66. 35 U.S.C.S. § 290 (2009).

Practice Points copies can be mistaken for a new request/filing); rather, submitters may provide a notice identifying the application/proceeding number and its status. Any submission that is not permitted entry will be returned, expunged, or discarded, at the sole discretion of the Office. It is to be noted that if the Office, in its sole discretion, deems the volume of the papers filed from litigations or other proceedings to be too extensive/ lengthy, the Office may return, expunge, or discard, at its sole discretion, all or part of the submission. In such an instance, a party may limit the submission in accordance with what is deemed relevant, and resubmit the papers. Such submissions must be provided without additional comment. Persons making such submissions must limit the submission to the notification and not include further arguments or information. It is to be understood that highlighting of certain text by underlining, fluorescent marker, etc., goes beyond bare notice of the prior or concurrent proceedings. Any proper submission will be promptly placed on record (entered) in the patent file. . . . It is to be further noted that 35 U.S.C. 290 is directed to “courts of the United States.” Accordingly, any submission of papers from a court outside the United States (a foreign jurisdiction) will be returned, expunged or discarded, at the sole discretion of the Office.67

Where favorable court decisions are available against third party patents of interest (especially, e.g., decisions having favorable claim constructions and/or holdings of invalidity), it is advisable to cite these decisions under Section 290. Doing so makes the submitted documents (including any claim construction and/or invalidity holdings) part of the prosecution history of the patent. Therefore, should the patent be enforced or challenged later, either in court or in reexamination, the documents (including any claim construction and/or invalidity holdings) may be considered as intrinsic evidence.

VII. Practice Points A. Prefiling Infringement Evaluations and Opinions Should Be Done Prior to Requesting Ex Parte or Inter Partes Reexamination In order for an ex parte or an inter partes reexamination to be declared, the requester must show both: (a) why the cited reference raises a substantial question of patentability of at least one claim of the subject patent; and (b) that the substantial question of patentability was not previously addressed in the prosecution history of the patent. This necessarily requires a complete claim

67. M.P.E.P. § 2207 (8th ed., vol. 2, 2008) (emphasis in original).

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construction, analysis of the prior art, and an analysis and opinion of invalidity based on application of the prior art to the construed claims. In the event prior art is being used that has been cited in the prosecution of the patent, it is especially important to review thoroughly the patent’s prosecution history. Then, one should provide with the Request a detailed description of the prosecution history of the patent showing that the substantial new question of patentability raised in the Request was not previously considered. Additionally, the claim construction and invalidity analysis for a Request for Reexamination must take into account two issues that differ in reexamination invalidity analyses and opinions as compared with invalidity analyses and opinions for most other purposes of this treatise (such as for predicting whether a reasonable court should hold a patent’s claims to be invalid), for reexamination purposes: (a) the claims are to be given their broadest reasonable interpretation consistent with the specification; and (b) there is no presumption that the claims are valid.

B. Be Aware of the Differences Between Ex Parte and Inter Partes Reexamination For U.S. patents that issued off original patent applications filed on or after November 29, 1999, a third party may request either ex parte or inter partes reexamination. In ex parte reexamination, the third party requester cannot participate in the reexamination process after its initial steps. Therefore, the requester may miss important opportunities to “educate” the patent examiner about the cited prior art that could result in the Patent Office declaring the reexamined patent to be valid over the cited prior art. Although the third party requester of an ex parte reexamination may raise the same prior art and invalidity arguments in litigation, there is an enhanced burden of proof for showing invalidity based on a reference that was considered by the Patent Office. The third party requester of an ex parte reexamination may remain anonymous. In inter partes reexamination, the third party requester (who may not remain anonymous) participates in the reexamination process through appeal to the Federal Circuit. However, significant estoppel issues result from inter partes reexamination, especially for the requesting party.

C. Reexamination Must Be Based on Documentary Prior Art, but May Also Include, in Conjunction with Documentary Prior Art, Admissions by the Patentee in Prosecution or Court That Are Related to Other Bases for Invalidity While reexamination may only be based on documentary prior art (patents and printed publications under Section 102(b)), the reexamination Examiner may also consider in conjunction with the documentary prior art admissions

Practice Points

made by the patentee in prosecution or in court related to other bases for invalidity, such as prior sale and public use. Therefore, prior to requesting reexamination, third party requesters should investigate and consider whether any such admissions exist—and if so, the potential effect they may have in reexamination. Such information should be provided in the reexamination request if it appears favorable to the third party requester and/or adverse to the patentee’s interests.

D. Remember That Prior Art May Be Cited in the Prosecution History of an Issued Patent Without Requesting a Reexamination, but Use Caution Under 35 U.S.C. § 301, any person (including anonymous submitters) may at any time during the enforceable period of an issued U.S. patent submit a citation of documentary prior art68 to the U.S. Patent Office for inclusion in the official prosecution history of the issued U.S. patent. To become part of the official prosecution history, the citation must be accompanied by written reasons showing how the cited prior art raises issues of patentability of at least one claim of the patent, and that the citation and the issues raised were not previously considered during the prosecution history. If the U.S. Patent Office accepts the written reasons, both the cited prior art and the reasons become part of the patent’s official prosecution history, and thus become intrinsic evidence. Hence, one may enter key prior art into the prosecution history of a third party’s U.S. patent under Section 301 without necessarily requesting a reexamination. However, preparing proper written reasons for citation in the patent’s prosecution history under Section 301 necessarily requires claim construction for at least one subject claim to which the reference applies, an analysis of the subject prior art, and an analysis and opinion of invalidity based on application of the prior art to the construed claims. Further, it is necessary to review the patent’s prosecution history to be certain that the written reasons submitted with the Section 301 citation request do not repeat arguments and discussions of the references previously treated in the patent’s prosecution history. Additionally, it should be kept in mind that if one only submits a reference under Section 301 against a third party’s patent, the patent owner may also file a Section 301 citation. Therefore, following a third party’s citation of prior art under Section 301, a patent owner may file a Section 301 citation on the same art and argue in its written statement why the art does not invalidate the claims of the subject patent. The patentee may even submit declaratory evidence (such as commercial success affidavits) to overcome an alleged prima facie showing of obviousness.

68. Patents and printed publications under 35 U.S.C. § 102(b).

549

550


Thus, if citing prior art under Section 301 without requesting reexamination, prior to filing the citation, it is important to carefully perform a complete invalidity evaluation and opinion and to decide on the strength of the invalidity position. An imprudent Section 301 citation could result in the patentee filing into the intrinsic evidence of the patent what is in effect a rebuttal. This could affect the impact of the original Section 301 citation as well as create an enhanced burden of proof for asserting invalidity based on the same cited prior art in subsequent litigation of the patent’s validity.

E. It Is Important to Coordinate U.S. and Non-U.S. Post-Grant Challenges to Third Party Patents It is a good practice for non-U.S. patent counsel to consult with U.S. counsel prior to initiating post-issuance challenges to third party non-U.S. patents that are related to third party U.S. patents of interest. For example, where a third party U.S. patent is under consideration for a post-grant challenge in the United States, and a related non-U.S. third party patent is under consideration for a post-grant challenge (such as an opposition), it can be advantageous for U.S. counsel to discuss its evaluation and opinion of the U.S. patent with nonU.S. counsel, and vice versa. Intimate coordination of challenges to third party patents in different countries may greatly facilitate success by forging a common plan of attack using the best possible prior art and arguments. This may reduce redundancies, control legal fees, and help to avoid inconsistent positions and results. For these same reasons, it may even be advisable to obtain opinions of invalidity of third party U.S. patents that are related to third party non-U.S. patents challenged abroad, even when challenging the third party U.S. patent may not be possible or advisable. However, attorneys licensed only in the U.S. should never evaluate or opine as to non-U.S. patents and related issues.

F. Remember to Cite Favorable Court Decisions in the Prosecution History of Third Party U.S. Patents of Interest Where favorable U.S. court decisions are available against third party patents of interest, (especially decisions having favorable claim constructions and/or invalidity holdings), it is advisable to cite these decisions under Section 290. Doing so makes these documents (including any claim construction and/or invalidity holdings) part of the prosecution history of the U.S. patent. Should the patent be challenged or enforced later (either in court or in reexamination) these documents (including any claim construction and/or invalidity holdings) may be considered as intrinsic evidence of the patent. Citations under Section 290 are limited to U.S. court decisions only. Thus, non-U.S. court proceedings cannot be cited under Section 290.

CHAP T ER

16 Evaluating and Opining on One’s Own Patent Rights SEC Considerations, Patent Audits, and a Businessperson’s Guide to Evaluations and Opinions of U.S. Patents

I. Overview: Securities Issues (Including Sarbanes-Oxley Issues) and Patent Audits A. Limitations on Scope of Chapter II. Securities Issues in Patent Evaluations and Opinions A. Patent Evaluation and Opinion Issues That May Trigger Potential Liability Under U.S. Securities Laws

554 555 556 557

1. Section 11(a) of the Exchange Act

557

2. Section 10(b) of the Exchange Act

558

3. Sarbanes-Oxley Act of 2002

560

a) Reporting Requirements Under Sarbanes-Oxley

562

B. Specific Examples of Patent Issues and Securities Laws: Failure to Disclose Potentially Invalid Patent Rights

563

C. Specific Examples of Patent Issues and Securities Laws: Misstatements About the Status of a Patent Application: Pending but Not Issued

565

D. Specific Examples of Patent Issues and Securities Laws: Misstatements About the Status of a Patent Application: Application Finally Rejected and Abandoned

566

E. Specific Examples of Patent Issues and Securities Laws: Misstatements and Omissions Concerning a Patent’s Claim Coverage

567

F. Specific Examples of Patent Issues and Securities Laws: Misstatements and Omissions Concerning the Status of Patent Litigation

569

551

552 Chapter 16 Evaluating and Opining on One’s Own Patent Rights G. Specific Examples of Patent Issues and Securities Laws: Misstatements and Omissions About a Patent Attorney’s Opinion

569

H. Limiting Potential Securities Law Applicability and Potential Liability: Due Diligence Defense

571

I. Limiting Potential Securities Law Applicability and Potential Liability: The “Bespeaks Caution” Doctrine

572

III. Patent Audits and SEC Compliance

575

A. Patent Rights Inventory

576

B. Patent Valuation

577

C. Considerations for Ongoing Compliance with Securities Laws for Material Patent Rights

577

IV. Highlights of Competent Evaluations and Opinions of U.S. Patents for Business Professionals Who Rely on Them for Securities and Other Issues A. Minimum Requirements for Legally Competent Evaluations and Opinions of U.S. Patents

579 579

1. Evaluation and Opinion Must Not Be Conclusory

580

2. Claim Construction Is Required

580

3. Explanation of Up-to-Date Relevant Law and Proper Application of the Law to the Facts

581

4. The Preparer of the Opinion

581

5. Level of Certainty

582

6. Evaluations and Opinions Should Be Written

582

7. Timing of Opinions

583

8. Evaluations and Opinions of Patent Noninfringement, Infringement, or Claim Scope

583

9. Evaluations and Opinions of Patent Invalidity

584

V. Practice Points

584

A. Patent Counsel Should Always Work Closely with Securities Counsel on Any Issues That May Involve Securities Laws or Regulations

584

B. Patent Attorneys Should Be Aware of Situations That May Trigger Reporting Responsibilities Under the Sarbanes-Oxley Act

585

C. Patent Counsel Should Be Aware of Issues That Could Trigger Potential Liabilities Under U.S. Securities Laws and Regulations

585

D. Securities Laws Provide Some Means of Avoiding Liability

586

Evaluating and Opining on One’s Own Patent Rights E. Patent Audits Aid in Disclosure Compliance Under Securities Laws

586

F. Highlights of Competent Evaluations and Opinions of U.S. Patents for Business Professionals Who Rely on Them for Securities and Other Issues

587

1. Must Construe Claims

587

2. Must Examine All Relevant Prosecution Histories

587

3. Must Consider All Claims for Invalidity Evaluations and Opinions

587

4. Infringement Evaluations and Opinions Require a Clear Understanding of the Potentially Infringing Subject Matter

588

553

554 Chapter 16 Evaluating and Opining on One’s Own Patent Rights

Usage Note: Evaluations and opinions of U.S. patents can intersect with U.S. securities laws. This may be intentional, such as when preparing materials related to disclosures regulated by U.S. securities laws or when conducting patent due diligence to support Sarbanes-Oxley financial reporting for companies whose patent assets are material to their financial statements. Evaluations and opinions of U.S. patents can also unintentionally intersect with U.S. securities laws, such as when a patent attorney inadvertently triggers potential liability under those laws by performing certain acts (discussed below) in the course of evaluating and opining on a company’s patents. Additionally, this chapter provides information about the way courts determine whether evaluations and opinions of U.S. patents are competent and may reasonably be relied upon by business professionals (such as corporate directors and auditors) in matters such as compliance with securities laws. The information provided is intended to help business professionals better understand evaluations and opinions of U.S. patents so that they may better determine whether they may comfortably and confidently rely on them in such matters. Other chapters of this treatise of particular importance to the topics of this chapter include Chapter 1 (overview of evaluations and opinions of U.S. patents), Chapter 2 (claim construction), Chapters 3–5 (patent infringement), Chapters 6–9 (patent validity), Chapter 10 (patent unenforceability), Chapter 11 (patent due diligence), Chapter 12 (clearance/freedom to operate evaluations and opinions), Chapter 18 (strategic patenting, including evaluations and opinions of patent portfolio strength and scope for commercial development strategies), Chapter 23 (competency of patent evaluations and opinions), and Chapter 24 (attorneyclient privilege and work product immunity issues related to evaluations and opinions of U.S. patents).

I. Overview: Securities Issues (Including Sarbanes-Oxley Issues) and Patent Audits Evaluations and opinions of patent rights of companies offering and selling securities can trigger potential liability under U.S. securities laws. Therefore, it is crucial that attorneys providing evaluations and opinions of patent rights of companies engaged in offering securities understand these potential liabilities and take appropriate steps to address them. As a rule, patent counsel should always work closely with securities counsel whenever performing evaluations or opinions of U.S. patents for purposes of compliance with securities laws and regulations. Further, patent counsel should always consult with securities counsel whenever any securities issues could for any reason arise in evaluating or opining on U.S. patents.

Overview 555

Typically, attorneys and law firms evaluating and opining on public companies’ patent rights address securities-related liabilities in one of two ways. In many instances, they take steps to assure that their advice is not to be used by the companies in any manner that could trigger potential liability under securities laws. For example, opinions regarding patents typically contain language advising the client that the document and its conclusions are not to be used in connection with any securities-related matters, that the attorneys and law firm preparing the opinion do not represent the client in connection with any securities-related matters, and that the opinion and its content have not been prepared in the representation of the client in any securities-related matters. Alternatively, when attorneys and law firms are specifically engaged to evaluate and opine on companies’ patent rights for purposes related to disclosure requirements under U.S. securities laws and regulations, they work closely with these counsel to assure full compliance with these laws and regulations. Patent audits are an example of evaluations and opinions that may be conducted to support compliance with U.S. securities laws and regulations.

A. Limitations on Scope of Chapter The intention of this chapter is not intend to provide a comprehensive guide to U.S. securities laws or the way these laws may affect all aspects of patent evaluations and opinions. Rather, it is intended to highlight the existence and importance of these laws, to note typical situations in which they may apply to evaluations and opinions of U.S. patents, and to suggest ways to address these issues. In keeping with the scope of this treatise, this chapter focuses only on evaluations and opinions of U.S. patents. However, many of the issues of this chapter may also apply to non-U.S. patents. For example, where non-U.S. patents are material to a company’s SEC financial statements, evaluations or opinions of material non-U.S. patent rights may be performed to support the company’s SEC financial reports and disclosures. However, evaluations or opinions of non-U.S. patent rights should only be performed by competent counsel licensed in the country of the patent rights. Attorneys who are licensed only in the United States should never evaluate or opine on non-U.S. patent rights. Patent counsel should always work closely with securities counsel whenever preparing evaluations or opinions of U.S. patents for purposes of supporting reports and disclosures to be made in compliance with securities laws and regulations. Further, patent counsel should always immediately consult securities counsel whenever any actual or potential securities-related issues arise in the preparation of evaluations and opinions of U.S. patents for any reasons. As discussed below, when preparing evaluations and opinions of U.S. patents for companies, there are a number of ways in which patent


counsel may, even unintentionally, be drawn into situations having actual or potential liabilities under U.S. securities laws and regulations. Therefore, it is imperative that patent counsel learn to identify actual or potential securitiesrelated issues that may arise when preparing evaluations and opinions of U.S. patents as doing so should allow patent counsel to avoid liability under these laws and regulations. This is extremely important as U.S. securities laws that may relate to patent evaluations and opinions can carry significant liabilities, including personal liabilities that may not be discharged by corporate or law firm indemnities or insurance. This chapter is also intended to provide information about evaluations and opinions of U.S. patents to business professionals (such as corporate directors and auditors) who must rely on these evaluations and opinions in matters such as security law compliance. The information provided is intended to help business professionals better understand these evaluations and opinions so that they may better determine whether they may comfortably and confidently rely on them in such matters.

II. Securities Issues in Patent Evaluations and Opinions Numerous interrelated securities laws may apply to evaluations and opinions of patent and patent-related rights of public companies. These include the Securities Act of 1933, as amended (the “Securities Act”),1 the Securities Exchange Act of 1934, as amended (the “Exchange Act”),2 and the SarbanesOxley Act of 2002 (“Sarbanes-Oxley” or “SOX”).3 The Securities Act primarily governs the issuance and sale of securities, requiring among other things the registration of public offerings. The Exchange Act created the U.S. Securities and Exchange Commission (“SEC”) to regulate post-registration market trading. The SEC regulates many public company disclosures, including registration statements and prospectuses under the Securities Act; periodic, current, quarterly and annual reports; and proxy statements under the Exchange Act. Sarbanes-Oxley created the Public Company Accounting

1. Securities Act of 1933, Act May 27, 1933, ch 38, Title I, § 1, 48 Stat. 74, 15 U.S.C. §§ 77a–77aa (2001). 2. Exchange Act of 1934, Act June 6, 1934, ch 404, Title I, § 1, 48 Stat. 88, 15 U.S.C. §§ 78a–78mm (2001). 3. Sarbanes-Oxley Act of 2002, Pub. L. No. 107-204, 116 Stat. 745 (codified in Titles 15, 18, and 28 of the U.S. Code (Supp. I & II 2002)).

Securities Issues in Patent Evaluations and Opinions

Oversight Board to oversee auditors of public companies and to establish auditing, quality control, ethics, and independence standards.

A. Patent Evaluation and Opinion Issues That May Trigger Potential Liability Under U.S. Securities Laws 1. Section 11(a) of the Exchange Act Under Section 11(a) of the Exchange Act, an investor has a cause of action against any person signing a registration statement.4 Signatories must include each of the following: [E]ach issuer, its principal executive officer or officers, its principal financial officer, its comptroller or principal accounting officer, and the majority of its board of directors or persons performing similar functions (or, if there is no board of directors or persons performing similar functions, by the majority of the persons or board having the power of management of the issuer). . . .5

An investor has a cause of action against any of these persons if the investor makes an investment in reliance on a registration statement or prospectus and: In case any part of the registration statement, when such part became effective, contained an untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading. . . .6

Significantly, courts have held that the standard for liability under this provision is strict liability, thus culpability need not be shown.7 As held by the U.S. Supreme Court: If a plaintiff purchased a security issued pursuant to a registration statement, he need only show a material misstatement or omission to establish his prima facie case. Liability against the issuer of a security is virtually absolute, even for innocent misstatements.8

4. 5. 6. 7. 8.

15 U.S.C.S. § 77f(a) (2009). Id. 15 U.S.C.S. § 77k(a) (2009). E.g., Herman & Maclean v. Huddleston, 459 U.S. 375, 382 (1983). Id. (footnote omitted).

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Chapter 16 Evaluating and Opining on One’s Own Patent Rights

2. Section 10(b) of the Exchange Act Section 10(b)9 and Rule 10b-510of the Exchange Act provide a statutory fraud rule (i.e., over and above the liability for common law fraud). Specifically, Rule 10b-5 provides: It shall be unlawful for any person, directly or indirectly, by the use of any means or instrumentality of interstate commerce, or of the mails or of any facility of any national securities exchange, (a) To employ any device, scheme, or artifice to defraud, (b) To make any untrue statement of a material fact or to omit to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading, or (c) To engage in any act, practice, or course of business which operates or would operate as a fraud or deceit upon any person, in connection with the purchase or sale of any security.11

As explained by the Fifth Circuit: In order to state a claim under section 10(b) of the 1934 Act and Rule 10b-5, a plaintiff must allege, in connection with the purchase or sale of securities, “(1) a misstatement or an omission (2) of material fact (3) made with scienter (4) on which plaintiff relied (5) that proximately caused [the plaintiffs’] injury.”12

Additionally: “In any private action arising under this chapter in which the plaintiff may recover money damages on proof that the defendant acted with a particular state of mind, the complaint shall, with respect to each act or omission alleged to violate this chapter, state with particularity facts giving rise to a strong inference that the defendant acted with the required state of mind.”13

The U.S. Supreme Court has defined scienter for purposes of securities fraud cases as “a mental state embracing intent to deceive, manipulate,

9. 10. 11. 12.

15 U.S.C.S. § 78j(b)(2009). 17 C.F.R. § 240.10b-5 (2009). Id. Nathenson v. Zonagen Inc., 267 F.3d 400, 406–7 (5th Cir. 2001) (quoting Tuchman v. DSC Communications Corp., 14 F.3d 1061, 1067 (5th Cir. 1994)). 13. Id. at 407 (quoting 15 U.S.C. § 78u-4 (b)(2)) (“We therefore find that in order to survive a motion to dismiss, a plaintiff alleging a section 10(b)/Rule 10b-5 claim must now plead specific facts giving rise to a ‘strong inference’ of scienter.”).


or defraud.”14 Plaintiffs may prove scienter by proving either actual knowledge or “‘severe recklessness,’ which, ‘properly defined and adequately distinguished from mere negligence,’ resembles a slightly lesser species of intentional misconduct.”15 As indicated by the Fifth Circuit, in this context, severe recklessness is limited to those highly unreasonable omissions or misrepresentations that involve not merely simple or even inexcusable negligence, but an extreme departure from the standards of ordinary care, and that present a danger of misleading buyers or sellers which is either known to the defendant or is so obvious that the defendant must have been aware of it.16

The U.S. Supreme Court has defined material for purposes of Section 10(b) securities fraud as follows: An omitted fact is material if there is a substantial likelihood that a reasonable shareholder would consider it important in deciding how to vote. . . . It does not require proof of a substantial likelihood that disclosure of the omitted fact would have caused the reasonable investor to change his vote. What the standard does contemplate is a showing of a substantial likelihood that, under all the circumstances, the omitted fact would have assumed actual significance in the deliberations of the reasonable shareholder. Put another way, there must be a substantial likelihood that the disclosure of the omitted fact would have been viewed by the reasonable investor as having significantly altered the “total mix” of information made available.17

Although the Supreme Court’s quote above discusses materiality in the context of stockholder voting, the standard applies in any Section 10(b) securities fraud situation, which typically involves fraud affecting investment decisions.18

14. Ernst & Ernst v. Hochfelder, 425 U.S. 185, 193, n.12 (1976). 15. Nathenson, 267 F.3d at 408 (quoting Broad v. Rockwell International Corp., 642 F.2d 929, 961 (5th Cir. 1981) (en banc)). 16. Broad, 642 F.2d at 961–62; Nathenson, 267 F.3d at 409 (“Accordingly, we join the First, Third, Sixth, and Eleventh Circuits and conclude that recklessness, the ‘severe recklessness’ defined in Broad, still constitutes scienter for purposes of claims brought under section 10(b) and Rule 10b-5. . . .”). 17. TSC Indus. v. Northway, 426 U.S. 438, 449 (U.S. 1976); Basic Inc. v. Levinson, 485 U.S. 224, 231–32 (1988) (“We now expressly adopt the TSC Industries standard of materiality for the § 10(b) and Rule 10b-5 context.”); Ganino v. Citizens Utilities Co., 228 F.3d 154, 163 (2d Cir. 2000) (noting that SEC Staff Accountability Bulletin No. 99 discussing that “material” in the context of Section 10(b) is an application of the materiality analysis in Basic, 485 U.S. at 247). 18. E.g., SEC v. Merrill Scott & Assocs., Ltd., 505 F. Supp. 2d 1193, 1213–14 (D. Utah 2007) (fraud in the issuance of investment securities involving a Ponzi scheme); Powell v. American

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3. Sarbanes-Oxley Act of 2002 The requirements of Sarbanes-Oxley (“SOX”) apply to attorneys “appearing and practicing before the [Securities and Exchange] Commission in the representation of an issuer.”19 Appearing and practicing before the Commission is defined as: (i) Transacting any business with the Commission, including communications in any form; (ii) Representing an issuer in a Commission administrative proceeding or in connection with any Commission investigation, inquiry, information request, or subpoena; (iii) Providing advice in respect of the United States securities laws or the Commission’s rules or regulations thereunder regarding any document that the attorney has notice will be filed with or submitted to, or incorporated into any document that will be filed with or submitted to, the Commission, including the provision of such advice in the context of preparing, or participating in the preparation of, any such document; or (iv) Advising an issuer as to whether information or a statement, opinion, or other writing is required under the United States securities laws or the Commission’s rules or regulations thereunder to be filed with or submitted to, or incorporated into any document that will be filed with or submitted to, the Commission[.]20

Patent attorneys should take note that the SOX requirements do not differentiate between attorneys specializing in securities law and other attorneys, such as patent counsel. SOX applies to any attorney, regardless of his or her practice, in which the attorney’s actions meet the above definition of “appearing and practicing before the Commission in the representation of an issuer.”21 For example, a patent attorney preparing a patent evaluation or opinion will be deemed to be appearing before the SEC—and the requirements of SOX will apply to that attorney—if the attorney drafts, negotiates, or otherwise gives advice with respect to any document that the attorney has prior notice will be filed with (or incorporated into a document filed with) the SEC. A common example includes a company asking its patent counsel to review the company’s description of its patent position in a document to be filed with the SEC. This may include summaries of a company’s patents; patent

Bank & Trust Co., 640 F. Supp. 1568, 1580 (N.D. Ind. 1986) (fraud in the sale of stock); SEC v. Southwest Coal & Energy Co., 439 F. Supp. 820, 826–27 (W.D. La. 1977) (fraud in the sale of stock). 19. 17 C.F.R. § 205.1 (2009). 20. 17 C.F.R. § 205.2(a) (2009). 21. Securities and Exchange Commission, Final Rule: Implementation of Standards of Professional Conduct for Attorneys, 17 C.F.R. Part 205 (http://sec.gov/rules/final/33–8185.htm) (hereafter “SEC SOX Attorney Commentary”) at 4–6.


applications; patents in different countries; patent applications in different countries; or terms of issued patents, etc. in documents such as registration statements and annual or quarterly reports. If the attorney has notice that the documents will be submitted either in whole or in part to the SEC, the SOX requirements apply to that attorney. Moreover, SOX also applies to “[a]n attorney supervising or directing another attorney who is appearing and practicing before the Commission in the representation of an issuer is a supervisory attorney.”22 This includes supervisory attorneys at law firms such as partners, senior counsel, and senior associates.23 Further still, “the representation of an issuer means providing legal services as an attorney for an issuer, regardless of whether the attorney is employed or retained by the issuer.”24 This means that it is not necessary for the attorney to be employed by the issuer.25 For example, SOX applies to outside counsel retained by the issuer.26 Additionally, SOX may also apply to attorneys employed by other parties (such as investment advisors) if the attorneys are “appearing and practicing” before the SEC on behalf of an issuer.27 However, the requirements of SOX do not apply to attorneys who have prepared documents (including evaluations and opinions of patents) where the drafting attorney never intended or had notice that the documents (or portions of the documents) would be submitted to the SEC.28 The term issuer in SOX applies to registered issuers, which includes SECreporting companies and companies that have filed a registration statement for an initial public offering.29 It would not apply, for example, to a private company selling securities in a private placement.30 Additionally, an issuer under SOX explicitly includes “any person controlled by an issuer, where an attorney provides legal services to such person on behalf of, or at the behest, or for the benefit of the issuer, regardless of whether the attorney is employed or retained by the issuer.”31 Thus, issuer includes wholly owned subsidiaries of the issuer (even if themselves private) where the attorney is acting “on behalf

22. 23. 24. 25. 26. 27. 28.

17 C.F.R. § 205.4(a) (2009). SEC SOX Attorney Commentary at 34. 17 C.F.R. § 205.2(g) (2009). SEC SOX Attorney Commentary at 12–13. Id. Id. SEC SOX Attorney Commentary at 6 (“The definition in the final rule thereby also clarifies that an attorney’s preparation of a document (such as a contract) which he or she never intended or had notice would be submitted to the Commission, or incorporated into a document submitted to the Commission, but which subsequently is submitted to the Commission as an exhibit to or in connection with a filing, does not constitute ‘appearing and practicing’ before the Commission.”). 29. 17 C.F.R. § 205.2(h) (2009); SEC SOX Attorney Commentary at 13–14. 30. 17 C.F.R. § 205.2(h) (2009); SEC SOX Attorney Commentary at 13–14. 31. 17 C.F.R. § 205.2(h) (2009); SEC SOX Attorney Commentary at 13–14.

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of, or at the behest of, or for the benefit of ” the parent (issuer).32 Therefore, if an attorney is performing a patent evaluation and opinion for a private company that is a wholly owned subsidiary of an SEC-reporting issuer, SOX reporting requirements (discussed below) apply to the attorney if the attorney is acting “on behalf of, or at the behest of, or for the benefit of ” the parent company. Thus, if information of the subsidiary comes to the attention of the attorney, and the information should be reported under SOX, the attorney must report the information, even though it is from a private company. a) Reporting Requirements Under Sarbanes-Oxley Sarbanes-Oxley imposes an obligation on attorneys subject to SOX to report “evidence of a material violation” following specific protocols set forth in SOX. The details of these reporting requirements are beyond the scope of this treatise. The purpose of this section is to provide general information on what constitutes “evidence of a material violation” and on how an attorney may discharge SOX reporting obligations. As discussed at the beginning of the chapter, whenever providing evaluations and opinions in any situation in which securities issues can—or do—arise, patent counsel should work closely with securities counsel. U.S. securities laws are complex and carry imposing penalties, including criminal penalties and personal liabilities that might not be covered by indemnification or insurance. Therefore, any potential securities issues arising in evaluating and opining on U.S. patents should always immediately be brought to the attention of competent securities counsel. Generally, SOX requires attorneys to whom SOX obligations apply (i.e., “attorneys appearing and practicing before the Commissioner in the representation of an issuer,” as discussed above) to report evidence of a material violation, determined according to an objective standard, within the issuer to the chief legal counsel or the chief executive officer of the issuer (or the issuer’s equivalent). If this person fails to respond appropriately, the attorney must follow specific “up the ladder” reporting obligations. Companies may also provide alternative reporting procedures where companies have established specified corporate compliance structures. Specifically, SOX requires: If an attorney, appearing and practicing before the Commission in the representation of an issuer, becomes aware of evidence of a material violation by the issuer or by any officer, director, employee, or agent of the issuer, the attorney shall report such evidence to the issuer’s chief legal officer (or the equivalent thereof) or to both the issuer’s chief legal officer and its chief executive officer (or the equivalents thereof) forthwith.33

32. SEC SOX Attorney Commentary at 13–14. 33. 17 C.F.R. § 205.3(b)(1) (2009).


“Evidence of a material violation” means: [C]redible evidence, based upon which it would be unreasonable, under the circumstances, for a prudent and competent attorney not to conclude that it is reasonably likely that a material violation has occurred, is ongoing, or is about to occur.34

Further, sections of SOX provide a process whereby an attorney reporting evidence of a material violation should continue to report the evidence “up the ladder,” if the response the attorney receives to initial reporting is insufficient. Additionally, SOX provides specific exceptions to reporting requirements, alternative means by which a company may respond to reports, and provisions directed to attorney-client privilege issues in the context of reporting requirements. Finally, SOX provides penalties and sanctions for attorneys failing to comply with the requirements of the Act: (a) A violation of this part by any attorney appearing and practicing before the Commission in the representation of an issuer shall subject such attorney to the civil penalties and remedies for a violation of the federal securities laws available to the Commission in an action brought by the Commission thereunder. (b) An attorney appearing and practicing before the Commission who violates any provision of this part is subject to the disciplinary authority of the Commission, regardless of whether the attorney may also be subject to discipline for the same conduct in a jurisdiction where the attorney is admitted or practices. An administrative disciplinary proceeding initiated by the Commission for violation of this part may result in an attorney being censured, or being temporarily or permanently denied the privilege of appearing or practicing before the Commission.35

B. Specific Examples of Patent Issues and Securities Laws: Failure to Disclose Potentially Invalid Patent Rights U.S. courts have evaluated a situation in which a company was accused of violating the Exchange Act by failing to timely disclose that certain patent rights were potentially invalid.36 The court ultimately held that the stockholder plaintiffs failed to state a case because they did not show that the defendants acted with sufficiently fraudulent intent.37

34. 35. 36. 37.

17 C.F.R. § 205.2(e) (2009). 17 C.F.R. § 205.6(a), (b) (2009). Gompper v. VISX, Inc., 298 F.3d 893 (9th Cir. 2002). Id. at 896.

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In Gompper v. VISX, the shareholders of VISX sued the company under Section 10(b) and other sections of the Exchange Act for allegedly making fraudulent statements about its patent rights, including failing to timely disclose potential invalidity of its core patent rights.38 VISX developed and sold laser vision-correction devices, and it held several U.S. patents on the technology.39 Through these patents, VISX was able to charge doctors performing vision-correction procedures using VISX technology a per procedure fee of $250.40 In early 1999, a Japanese competitor obtained FDA approval to sell competing vision-correction products in the United States.41 The competitor did not charge a per procedure fee to use its products, which raised a potentially significant financial issue for VISX’s business model.42 VISX immediately attempted to stop its Japanese competitor in the United States by suing it for patent infringement, both in U.S. district court and before the International Trade Commission (“ITC”).43 After a two-week trial, in August 1999 an ITC Administrative Judge ruled against VISX and in favor of its Japanese competitor.44 In an order entered in December 1999, the administrative law judge determined that the Japanese company’s products did not infringe VISX’s U.S. patents, and further concluded that one of VISX’s core patents was invalid because the patent failed to name a co-inventor.45 Approximately two months later, in February 2000 VISX publically announced that as part of its new business model, it was reducing its per procedure fee to $100.46 Upon this announcement, “VISX’s stock plummeted, and plaintiffs brought [the securities fraud] action.”47 Plaintiffs alleged that the defendants were liable for securities fraud “for making false statements or for failing to disclose adverse facts while selling VISX stock and participating in a fraudulent scheme.”48 The plaintiffs argued that the defendants made positive statements about VISX’s business and its patent portfolio in order to artificially inflate the stock price. The thrust of the complaint was that these statements were false or misleading because defendants knew there was no basis for their core patent claims and thus, the revenue projections. Without a

38. 39. 40. 41. 42. 43. 44. 45. 46. 47. 48.

Id. at 894. Id. Id. Id. Id. Id. Id. Id. Id. Id. Id.

Securities Issues in Patent Evaluations and Opinions valid patent portfolio, plaintiffs argue, VISX could not possibly maintain its lucrative per procedure fee, and, thus could not deliver on the stated revenue projections. The complaint alleges that defendants had this knowledge during the [relevant] period, but engaged in false public rhetoric in order to inflate stock prices and benefit from their own massive insider trading before the truth was revealed.49

The district and appellate courts held that the defendants had failed to satisfy Section 10(b)’s pleading requirements because “the facts alleged in the complaint indicate that VISX and its officers fervently believed in the viability of the patent portfolio, and litigated its defense with ferocity.”50 Although the courts dismissed the stockholders’ complaint in Gompper, the case serves as an illustration of how failure to disclose events affecting a company’s patent portfolio (such as adverse court decisions on infringement or validity) might result in liability under U.S. securities laws.

C. Specific Examples of Patent Issues and Securities Laws: Misstatements About the Status of a Patent Application: Pending but Not Issued U.S. courts have evaluated a situation in which a company was accused of violating the Exchange Act in part by making misstatements about the status of a U.S. patent application.51 The appellate court reversed a holding by the lower court finding the defendants were not liable for securities fraud.52 The appeals court held that a jury could have determined that the defendant corporation committed securities fraud in misrepresenting to share purchasers that its company had substantial worth because it had an issued U.S. patent when, in fact, the company had no such patent.53 In Pommer v. Medtest, the defendants formed a company, Medtest, in December 1981.54 The sole asset of the company was potentially patentable technology covering a medical testing process.55 When the company was formed, its patent counsel informed Medtest that its technology was patentable.56 In September 1982, Medtest filed a U.S. patent application on

49. Id. 50. Id. at 896 (for example, the ITC ruling had not yet been appealed and the district court had not made an initial ruling on infringement or patent validity). 51. Pommer v. Medtest Corp., 961 F.2d 620 (7th Cir. 1992). 52. Id. at 623. 53. Id. 54. Id. at 622. 55. Id. 56. Id.

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its technology.57 That same month, plaintiffs purchased stock in Medtest based, at least in part, on representations by Medtest that it had an issued U.S. patent.58 Medtest did not obtain an issued U.S. patent on its technology until two years after the sale of stock.59 The appeals court held that Medtest’s misrepresentation in the sale of the stock that it had an issued patent was fraud under the Exchange Act.60 In its defense, Medtest argued that while it may have been untrue that it had a patent on its technology at the time the stock was sold, a patent ultimately issued covering the subject technology.61 The court rejected this defense, stating: [I]t does not matter that Medtest obtained a patent two years later. The securities laws approach matters from an ex ante perspective: just as a statement true when made does not become fraudulent because things unexpectedly go wrong, so a statement materially false when made does not become acceptable because it happens to come true.62

Medtest serves as reminder of the importance of a company properly stating the status of its patent portfolio. Further, one of the key issues in Medtest that lead the appeals court to its decision of fraud was that the sole asset of the company was the subject patent application. Thus, Medtest cautions that statements regarding patent rights may be more material to securities issues in situations in which patent rights form the dominant—or sole—asset of a company.

D. Specific Examples of Patent Issues and Securities Laws: Misstatements About the Status of a Patent Application: Application Finally Rejected and Abandoned U.S. courts have evaluated a situation in which a company was accused of violating the Securities Act and the Exchange Act in part by misrepresenting that a patent had been “applied for” when, in fact, the patent application had been finally rejected three years earlier for inoperability, and the application had been abandoned.63 The appeals court affirmed summary judgment by the district court that the defendants had materially violated the Securities Act and the Exchange Act by describing the status of a patent application that had been finally rejected and abandoned as a patent “applied for.”64

57. 58. 59. 60. 61. 62. 63. 64.

Id. Id. Id. Id. at 623 Id. Id. SEC v. Research Automation Corp., 585 F.2d 31 (2d Cir. 1978). Id. at 36.


In SEC v. Research Automation, the SEC sued defendants (a corporation and its officers) for making false statements to investors in violation of the Securities Act and the Exchange Act.65 The SEC alleged that, among other things, the defendants fraudulently misrepresented to shareholders that the company had a pending U.S. patent application on its technology.66 Specifically, the company sent a letter to shareholders in 1971, “with a picture of the firm’s automatic transfer unit displayed above the legend ‘patent applied for.’”67 In fact: the company’s patent application on the automatic transfer unit had been finally rejected by the U.S. Patent Office; the final rejection had been “affirmed by the Board of Patent Appeals of the Patent Office because the machine was ‘inoperable’”; and the “application was abandoned when the time for further review expired in 1968, well before the 1971 shareholder letter.”68 The defense included asserting that a patent application on the technology had been pending in Canada at the time of the letter.69 The court dismissed this, noting, “[a]lthough the exact status of the Canadian application is in dispute . . . any reasonable investor in the United States would have believed that the ‘application’ to which the letter referred had been filed in the United States.”70 The court further stated: Who could not regard as vital the denial of U.S. patent protection for RAC’s principal product on the grounds that it was “inoperable?” . . . Appellants repeatedly and willfully made the most blatant misrepresentations to those whose money they sought, and there is obviously a reasonable likelihood that wrongdoing would recur.71

E. Specific Examples of Patent Issues and Securities Laws: Misstatements and Omissions Concerning a Patent’s Claim Coverage U.S. courts have evaluated a situation in which a company was accused of violating the Exchange Act by misrepresenting and omitting information regarding the scope of its patent coverage of its sole asset, a pharmaceutical drug.72 The appeals court found that a company’s statement that it had a patent covering the use of a new pharmaceutical drug implied to a reasonable

65. 66. 67. 68. 69. 70. 71. 72.

Id. at 34. Id. Id. Id. at 34–35. Id. at 35. Id. Id. at 36. Nathenson v. Zonagen Inc., 267 F.3d 400 (5th Cir. 2001).

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investor that the company had a patent covering any use of the drug.73 In fact, the patent covered only one unusual method of administering the drug, and expressly excluded administering the drug by swallowing a pill.74 In Nathenson v. Zonagen, the defendant corporation issued a press release as follows: Zonagen, Inc. announced today that it has received notification from the United States Patent and Trademark Office that the patent covering its use of VASOMAX (TM) as a treatment for erectile dysfunction (impotency) has been allowed. The Company noted the approval was granted for the first of two separate applications associated with VASOMAX (TM). The second, more recent application is still pending. ‘The approval of our U.S. patent, the VASOMAX (TM) IND submission and the selection of our Phase III development team are crucial events in our commercialization strategy,’ declared Joseph S. Podolski, President and CEO, Zonagen, Inc. . . .75

In fact, at the time of the press release, the company had received an issued patent with claims that covered only the administration of the drug in the form of tablets or other items dissolved in the mouth, and expressly excluded administration of the drug by swallowing and dissolving in the stomach.76 The court noted: If, as plaintiffs have alleged, Vasomax was at all times intended to be administered only as a pill or tablet to be swallowed and dissolved in the stomach, then it was plainly not covered by the Zorgniotti method of use patent which clearly and affirmatively excluded that method of use. It was hence false and misleading for the June 24, 1996 press release to state that “Zonagen, Inc. announced . . . that the patent covering its use of Vasomax (TM) as a treatment for erectile dysfunction (impotency) has been allowed” (emphasis added). The patent did not “cover” Zonagen’s use of Vasomax, but rather affirmatively excluded that use.77

Additionally, as with the Medtest case discussed above, the court noted that because Zonagen “was essentially a one product company, and that product was Vasomax,” “patent protection for Vasomax was obviously important.”78

73. 74. 75. 76. 77. 78.

Id. at 423. Id. Id. (emphasis in original). Id. at 422. Id. at 423 (emphasis in original). Id. at 425.


Thus, misstatements concerning patent rights to Vasomax were more likely to be material than might be the case for a company having additional assets.79 Nathenson serves as reminder of the importance of a company properly and fully stating the scope of its patent protection. Further, similar to the Medtest case discussed above, Nathenson cautions that statements regarding patent rights may be more material to securities issues in situations in which patent rights are crucial to a company and form the sole—or dominant—asset of the company.

F. Specific Examples of Patent Issues and Securities Laws: Misstatements and Omissions Concerning the Status of Patent Litigation U.S. courts have evaluated a situation in which a company was accused of violating the Exchange Act by misrepresenting and omitting information about the status of patent litigation in connection with a tender offer.80 In Gearhart Indus. v. Smith Int’l, the defendant corporation issued a statement concerning the status of a pending patent infringement suit, stating that it believed that it had “‘meritorious defenses’ to the suit, when in fact it ha[d] already admitted patent infringement in the case and only damages—potentially serious ones—remain[ed] in contention.”81 The Fifth Circuit affirmed the district court’s holding that the statement “presented a misleading picture of Smith’s financial condition to Gearhart’s shareholders considering its tender offer,”82 and that “the want of disclosure was of a serious nature, likely to mislead a reasonable shareholder in deciding whether to tender his shares.”83

G. Specific Examples of Patent Issues and Securities Laws: Misstatements and Omissions About a Patent Attorney’s Opinion Delaware courts have evaluated a situation in which a company was accused of violating a state equitable fraud law, in part by misrepresenting and omitting information concerning a patent attorney’s opinion.84 The Delaware Supreme

79. 80. 81. 82. 83. 84.

Id. Gearhart Indus. v. Smith Int’l, 741 F.2d 707 (5th Cir. 1984). Id. Id. Id. at 716. Zirn v. VLI Corp., 681 A.2d 1050 (Del. 1996).

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Court held that partial disclosure of patent counsel’s opinion was materially misleading to stockholders.85 In Zirn v. VLI, a publically traded company distributed materials to its stockholders in part purporting to provide the substance of patent counsel’s advice to the company concerning the likelihood of a patent being reinstated.86 The materials stated: In July 1987, the Patent expired due to the Company’s inadvertent failure to timely pay a maintenance fee. On September 21, 1987, the United States Patent and Trademark Office dismissed the Company’s petition to reinstate the Patent. The Company has filed a petition requesting the Patent and Trademark Office to reconsider its dismissal. The Company is unable to estimate when this petition for reconsideration will be decided by the Patent and Trademark Office and has been advised by special patent counsel that there is a significant possibility of the reconsideration petition not prevailing in the Patent and Trademark Office.87

However, the court noted that the disclosure did not, however, discuss the totality of patent counsel’s advice. Specifically, patent counsel had indicated through correspondence to VLI that ultimate success in the PTO was likely and that VLI possessed “an excellent case on the merits.” Moreover, contrary to the statement contained in the 14D-9, patent counsel had indicated that final PTO action could be expected by November 21, 1987.88

The Delaware Supreme Court noted: VLI’s Schedule 14D-9 simply stated that “the Company . . . has been advised by special patent counsel that there is a significant possibility of the reconsideration petition not prevailing in the Patent and Trademark Office.” This is certainly not an untrue statement. But, standing alone, it paints an unduly bleak picture of VLI’s chances for success in the PTO. Patent counsel appeared to believe that the prospects for reinstatement were quite good. In a November 3, 1987 letter from patent counsel to the VLI Board of Directors, patent counsel expressed the view that, “regarding the likely outcome of [patent counsel’s] . . . efforts [to reinstate the patent], it is my opinion, and the opinion of other members of my law firm, that we have an excellent case on the merits and there is a good chance that we will prevail in the PTO.” (Emphasis supplied.) Patent counsel

85. 86. 87. 88.

Id. at 1057. Id. at 1054. Id. (emphasis in original). Id.

Securities Issues in Patent Evaluations and Opinions further stated that he was “confident that the VLI patent could ultimately be reinstated by one mechanism or another.”89

The court concluded: “Thus, it is clear that VLI’s partial disclosure failed to convey the totality of patent counsel’s views and was thus materially misleading.” 90

H. Limiting Potential Securities Law Applicability and Potential Liability: Due Diligence Defense Under the due diligence defense, certain persons (other than the issuer) may avoid liability under Section 11(a) of the Exchange Act for misstatements or omissions in a registration statement if he or she can prove: [A]s regards any part of the registration statement not purporting to be made on the authority of an expert, and not purporting to be a copy of or extract from a report or valuation of an expert, and not purporting to be made on the authority of a public official document or statement, he had, after reasonable investigation, reasonable ground to believe and did believe, at the time such part of the registration statement became effective, that the statements therein were true and that there was no omission to state a material fact required to be stated therein or necessary to make the statements therein not misleading; and (B) as regards any part of the registration statement purporting to be made upon his authority as an expert or purporting to be a copy of or extract from a report or valuation of himself as an expert, (i) he had, after reasonable investigation, reasonable ground to believe and did believe, at the time such part of the registration statement became effective, that the statements therein were true and that there was no omission to state a material fact required to be stated therein or necessary to make the statements therein not misleading . . .91

The standard of reasonable investigation and reasonable ground for belief for the due diligence defense of Section 11(a) is defined as “that required of a prudent man in the management of his own property.”92 An example of when the due diligence defense may apply in the context of patents is the failure to disclose an unpublished, pending U.S. third party patent application claiming similar subject matter as an issuer’s U.S. patent application described in a registration statement or exhibit to a registration

89. 90. 91. 92.

Id. at 1056–57 (emphasis in original). Id. at 1057. 15 U.S.C.S. § 77k(b)(3)(A), (B) (2009) (emphasis added). 15 U.S.C.S. § 77k(c) (2009) (“Standard of reasonableness. In determining, for the purpose of paragraph (3) of subsection (b) of this section, what constitutes reasonable investigation and reasonable ground for belief, the standard of reasonableness shall be that required of a prudent man in the management of his own property.”).

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statement where the unpublished application has an earlier priority date than the issuer’s patent application. In such a case, the defense may apply because, absent the unpublished application being brought to the attention of the person claiming the defense, the existence of the unpublished application would be unknown and unknowable at the time of the registration statement. On the other hand, the due diligence defense may not apply if such a third party patent application was published and publically available from the Patent Office at the time the securities statement was made. In this case, the party may face strict liability under Section 11(a), as discussed above.

I. Limiting Potential Securities Law Applicability and Potential Liability: The “Bespeaks Caution” Doctrine Under the bespeaks caution doctrine, cautionary language regarding forward-looking statements made in securities documents may provide a defense to claims of securities fraud. As explained by the U.S. Court of Appeals for the Third Circuit: [W]hen an offering document’s forecasts, opinions or projections are accompanied by meaningful cautionary statements, the forward-looking statements will not form the basis for a securities fraud claim if those statements did not affect the “total mix” of information the document provided investors. In other words, cautionary language, if sufficient, renders the alleged omissions or misrepresentations immaterial as a matter of law. The bespeaks caution doctrine is, as an analytical matter, equally applicable to allegations of both affirmative misrepresentations and omissions concerning soft information. Whether the plaintiffs allege a document contains an affirmative prediction/opinion which is misleading or fails to include a forecast or prediction which failure is misleading, the cautionary statements included in the document may render the challenged predictive statements or opinions immaterial as a matter of law. Of course, a vague or blanket (boilerplate) disclaimer which merely warns the reader that the investment has risks will ordinarily be inadequate to prevent misinformation. To suffice, the cautionary statements must be substantive and tailored to the specific future projections, estimates or opinions in the prospectus which the plaintiffs challenge.93

93. In re Donald J. Trump Casino Sec. Litig., 7 F.3d 357, 371–72 (3d Cir. 1993); Olkey v. Hyperion 1999 Term Trust, 98 F.3d 2, 9 (2d Cir. 1996) (“Since a reasonable investor could have found the promise of moderate returns attractive despite the risk of substantial losses, there is no reason to dismiss the extensive and detailed cautionary language of the prospectuses as boilerplate. That language fully disclosed the risk of investment and was specific enough to warrant a reasonable investor’s attention. . . . Made cognizant by the Hyperion prospectuses of the risk posed by declining interest rates, reasonable investors purchased shares of the


The bespeaks caution doctrine has essentially been codified in the “safe harbor” provision of forward-looking written or oral statements under the Private Securities Litigation Reform Act of 1995.94 The Third Circuit has explained: In 1995, Congress enacted the Private Securities Litigation Reform Act (the “Reform Act”) because of significant evidence of abuse in private securities litigation, particularly the filing of frivolous suits alleging securities violations designed solely to coerce companies to settle quickly and avoid the expense of litigation. The Reform Act contains, inter alia, a statutory safe harbor for forward-looking written or oral statements. Under that provision, an issuer is not liable for a forward-looking statement if it is “identified as a forward-looking statement, and is accompanied by meaningful cautionary statements identifying important factors that could cause actual results to differ materially from those in the forward-looking statement.” 15 U.S.C.A. § 78u-5(c)(1)(A)(i) (West Supp. 2000). The safe harbor is also available for oral forward-looking statements under certain conditions.95

Two important limitations on the bespeaks caution doctrine are: (a) it only applies to forward-looking statements; and (b) the cautionary language must be directly related to the alleged misrepresentations or omissions: By its terms, the “bespeaks caution” doctrine, like the safe harbor provision in the Reform Act, is directed only to forward-looking statements. When we first recognized the doctrine, we stated that “when an offering document’s forecasts, opinions or projections are accompanied by meaningful cautionary statements, the forward-looking statements will not form the basis for a securities fraud

Trusts in the failed expectation that interest rates would rise. Their expectations were not deceptively manipulated but were simply unmet. The prospectuses contained no material misstatements or omissions of fact, and the plaintiffs fail to state a claim under either the 1933 or 1934 Acts, or under common law fraud.”); Luce v. Edelstein, 802 F.2d 49, 56 (2d Cir. 1986) (“The other claims based on the Offering Memorandum do not state a claim for relief under Section 10(b). Plaintiffs allege that the Offering Memorandum contained intentional misrepresentations as to the potential cash and tax benefits of the partnership. However, the Offering Memorandum made it quite clear that its projections of potential cash and tax benefits were ‘necessarily speculative in nature’ and that ‘no assurance (could) be given that these projections (would) be realized.’ Indeed, the Offering Memorandum warned prospective investors that ‘actual results may vary from the predictions and these variations may be material.’ We are not inclined to impose liability on the basis of statements that clearly ‘bespeak caution.’ Polin v. Conductron Corp., 552 F.2d 797, 806 n.28 (8th Cir.), cert. denied, 434 U.S. 857, 54 L. Ed. 2d 129, 98 S. Ct. 178 (1977) (quoted approvingly in Goldman v. Belden, 754 F.2d 1059, 1068 (2d Cir. 1985)).”). 94. 15 U.S.C.S. § 78u (2009). 95. EP Medsystems, Inc. v. Echocath, Inc., 235 F.3d 865, 872–873 (3d Cir. 2000) (citations and footnotes omitted).

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Chapter 16 Evaluating and Opining on One’s Own Patent Rights claim. . . .” In re Trump Casino Sec. Litig., 7 F.3d at 371 (emphasis added). In later cases, we confirmed that the doctrine only applied to forward-looking statements. See, e.g., Semerenko v. Cendant Corp., 223 F.3d 165, 182 (3d Cir. 2000) (noting that the plaintiffs “maintain that the ‘bespeaks caution’ doctrine is inapplicable, because the statements related to present and historical facts that were capable of verification and, as such, not forward-looking” whereas “the defendants . . . characterize the statements . . . as forward-looking, and thus subject to the bespeaks caution doctrine.”). The other courts of appeal have also held that the “bespeaks caution” doctrine only applies to forward-looking statements. See Grossman v. Novell, Inc., 120 F.3d 1112, 1123 (10th Cir. 1997) (holding “bespeaks caution” doctrine inapplicable to alleged statements relating to the company’s increased market share, pace of merger integration, and “smooth” merger); In re Stac Elec. Sec. Litig., 89 F.3d 1399, 1408 (9th Cir. 1996) (“By definition, the bespeaks caution doctrine applies only to affirmative, forward-looking statements.”); Shaw v. Digital Equip. Corp., 82 F.3d 1194, 1213 (1st Cir. 1996) (explaining that a statement may contain “both a forward-looking aspect and an aspect that encompasses a representation of present fact,” and “to the extent that plaintiffs allege that the . . . statement encompasses the latter representation of present fact, and that such a representation was false or misleading when made, the surrounding cautionary language could not have rendered the statement immaterial as a matter of law.”) (emphasis omitted); Harden v. Raffensperger, Hughes & Co., Inc., 65 F.3d 1392, 1405–06 (7th Cir. 1995) (refusing to apply “bespeaks caution” doctrine to statement of “hard fact” regarding the company’s “plans to restore profitability to its day-to-day operations”); Rubinstein v. Collins, 20 F.3d 160, 167 (5th Cir. 1994) (discussing the “bespeaks caution” doctrine’s applicability to “predictive statements”). But cf. Harris v. Ivax Corp., 182 F.3d 799, 805–6 (11th Cir. 1999) (holding that statements made on the last day of a quarter concerning the results for the quarter are forward-looking). We have also recognized that for the “bespeaks caution” doctrine to apply, the cautionary language must be directly related to the alleged misrepresentations or omissions. See Kline, 24 F.3d at 489. Although we have never explicitly held that the cautionary language must actually accompany the alleged misrepresentation or omission, we have noted in many cases that the cautionary language did accompany the representation. For example, in In re Trump Casino Sec. Litig., we evaluated the plaintiffs’ “assertion that the Partnership believed the Taj Mahal could meet the obligations of the bonds [set forth in the prospectus], [and] also other relevant statements contained in the prospectus.” 7 F.3d at 369. We noted that “an accompanying statement may neutralize the effect of a misleading statement.” Id. at 372. In Kline, we pointed out that the opinion letters at issue contained cautionary language but ultimately concluded that the disclaimer did not directly relate to the statements by which plaintiffs claimed to have been misled, and thus we concluded the claim could be maintained. See 24 F.3d at 489–90. Similarly,

Patent Audits and SEC Compliance 575 in In re Westinghouse Sec. Litig., even though the cautionary language appeared in the prospectus, we held that it did not sufficiently negate some of the claims. See 90 F.3d at 709.96

In the context of patent-related disclosures, in EchoCath, a district court determined that the following cautionary language was sufficient under the bespeaks caution doctrine to put a reasonable investor on notice that investing in the company was risky, including a risk of the company not receiving patent protection of technologies viewed as critical to the company’s business prospects: [EchoCath] considers patent protection of its technologies to be critical to its business prospects. There can be no assurance that [EchoCath’s] pending patent applications will issue as patents, that any issued patents will provide [EchoCath] with significant competitive advantages or that challenges will not be instituted against the validity or enforceability of any patent owned by [EchoCath.] . . . There can be no assurance that others will not independently develop similar or more advanced technologies or design around aspects of [EchoCath’s] technologies which may be patented or duplicate [EchoCath’s] trade secrets.97

III. Patent Audits and SEC Compliance A company should carefully evaluate all patent rights that are material to its business and that are disclosed in reports or registration statements filed with the SEC, or in which there is value assigned to the patent rights that is included in the assets on a company’s balance sheet included in such reports or registration statements. Moreover, SEC Regulation S-K, Item 101(c)(iv) expressly requires that when an issuer has patent rights that are material, the description of the issuer’s business in registration statements filed under the Securities Act or in periodic reports filed under the Exchange Act must discuss “the importance . . . and the duration and effect of all patents [and] licenses held.”98 Further, the financial reporting requirements of SOX may require a careful evaluation of a company’s patent rights when they are material to the company’s financial reports.

96. Id. at 874. 97. EP Medsystems, Inc. v. Echocath, Inc., 30 F. Supp. 2d 726, 735 (D.N.J. 1998), rev’d, 235 F.3d 865, 885 (3d Cir. 2000) (emphasis and bracketing in original) (the appellate court reversed and remanded because it was not clear from the record whether the cautionary statements were forward-looking). 98. 17 C.F.R. § 229.101(c)(iv) (2009).


These requirements apply with equal force to both U.S. and non-U.S. patent rights that are material under U.S. securities laws. However, in keeping with the focus of this treatise on U.S. patents, this section discusses only U.S. patent rights. When non-U.S. patent rights are material to an issuer and require disclosure under U.S. securities laws, competent patent counsel in the country of origin should be consulted to evaluate and opine on the rights. Attorneys licensed only in the United States should never evaluate or opine on non-U.S. patent rights. When the above-described conditions apply and disclosure of U.S. patent rights is required under U.S. securities laws, the most thorough and consistent means to comply with SEC disclosure requirements is a patent audit,99 which is an audit of a company’s patent rights. It includes both rights under issued patents and those that may evolve into rights under issued patents (such as patent applications, invention disclosures, and laboratory notebooks and other evidence of inventive subject matter). Patent audits may also include patent rights licensed from third parties.

A. Patent Rights Inventory The first step in a patent audit is to identify all of a company’s patent rights (including in countries other than the United States, as well as those under international conventions such as the Patent Cooperation Treaty (PCT)). As mentioned above, these include currently enforceable rights in issued U.S. patents, as well as potential U.S. patent rights, including those in pending patent applications, invention disclosures, and evidence of invention (such as the materials in laboratory notebooks). Third party U.S. patent rights licensed by the company (especially those exclusively licensed) are also included. Rights in issued U.S. patents should be the easiest U.S. patent assets to identify. However, when evaluating these rights, it is important to note the following: (a) what the terms of the patents may be, including any terms that may be shortened by terminal disclaimers or extended by patent term extension and/or patent term restoration; (b) whether the maintenance fees have been timely and correctly paid100 on the issued patents; and (c) whether there are any circumstances that may adversely affect the validity or enforceability of the patents, including but not limited to, adverse holdings in patent litigations, discoveries of potentially invalidating prior art, or threatened or active

99. When non-U.S. patent rights are also involved, a patent audit may include non-U.S. patent rights, provided that all substantive evaluations and opinions of non-U.S. patents are conducted by attorneys properly licensed in the countries issuing the patent rights. However, this discussion focuses on U.S. patent rights. 100. For example, if maintenance fees were paid as a small entity, is the patent owner in fact a small entity under the U.S. Patent Office’s definition of a small entity?

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litigation and/or post-issuance proceedings (such as interference, reexamination, or reissue proceedings). Potential patent rights include any rights that could or might issue as one or more claims of one or more valid U.S. patents. These include descriptions of inventions in pending patent applications, applications in preparation, invention disclosures, and evidence of inventions in, for example, company documents such as laboratory notebooks. Finally, patent audits need to account for patent rights licensed from third parties. This especially important for exclusively licensed patent rights as these are in many respects similar to company-owned patent rights. Licenses of potential third party patent rights (e.g., licenses covering pending third party patent applications) should also be included. Additionally, patent license evaluations must also consider and account for any out-licensing of company patent rights. As with in-licensing, exclusive out-licensing of company-owned patent rights require particular attention as they may adversely affect the company’s rights to the exclusively licensed patents. Further, royalties and other financial obligations and rights under patent licenses must be noted and inventoried.

B. Patent Valuation Following a complete inventory of a company’s patent rights, the next step in a patent audit is typically to place a value on a company’s patent rights. This specialized and detailed topic is beyond the scope of this treatise. Competent accounting experts should be consulted for valuations of a company’s material patent rights.

C. Considerations for Ongoing Compliance with Securities Laws for Material Patent Rights When companies have material patent rights subject to disclosure and other requirements under U.S. securities laws, it is advisable to establish ongoing internal controls for continuing compliance with these requirements. Companies with patent portfolios that are material under U.S. securities laws should establish and maintain detailed internal controls for organizing, evaluating, and reporting on issues related to these rights. This includes established, ongoing means for inventorying issued patent rights, pre-issuance rights (e.g., patent applications), and patent licenses, including in-licensed and out-licensed rights. It also includes means for assessing and reporting all potential issues that might adversely affect a company’s patent assets. These include (but are not limited to) identifying, evaluating, and reporting on issues ranging from correct and timely payment of patent maintenance and


license fees to noting and evaluating actual or potential threats to patent rights (such as threatened litigation, knowledge of potentially invalidating prior art, potential inequitable conduct, or potential issues related to patent inventorship or ownership). Practical aspects to SEC-related compliance for material patent rights may also include designation of a corporate officer responsible for maintaining compliance with SEC disclosure requirements for material patent assets, such as a Chief Intellectual Property Officer. Such an officer can centralize responsibilities for securities reporting compliance for material patent assets to reduce the likelihood of inadvertent failures to comply. Additional practical measures to ensure ongoing compliance with SEC disclosure regulations for material patent rights include detailed written policies for recording evidence of inventions (such as detailed procedures for laboratory notebooks). These should include detailed written procedures for recording and storing data, witnessing recorded data for purposes of corroborating evidence of invention, and establishing and maintaining centralized organization and storage of laboratory notebooks and other data. Companies should also have detailed mandatory procedures for scientists to routinely (e.g., quarterly) report invention disclosures, which should disclose all evidence of invention, including inventorship. Additionally, there should be routinely established (e.g., quarterly) internal reviews of invention disclosures resulting in detailed reports of the reviews and further steps to be taken toward patenting company inventions.101 Still further, companies should establish protocols for reviewing potential infringement by third parties of material company patent rights, as well as for reviewing and investigating threats to material patent rights (such as threats of litigation, discovery of potential invalidating prior art, or potential inventorship issues). The goal of these procedures is to have detailed, written internal controls and procedures for auditing and reporting on material patent assets that are subject to disclosure and reporting requirements of U.S. securities laws. This includes internal controls of sufficient clarity and completeness that businesspersons at an issuer (and its auditors) can readily review, understand, and rely on the internal controls and the audit reports generated from them so as to make necessary SEC disclosures. This may include, for example, certifications by a company’s senior officers under SOX requirements in which a company’s patent rights are material to its financial reports.

101. However, such reports should avoid expressing negative statements about potential patentability, intentional delays in seeking patent protection, and other issues that might negatively affect patentability or validity of any patent application or patent issuing from invention disclosures. Such statements might also cause issues in enforcement of patents issuing from the invention disclosures.

Highlights of Competent Evaluations and Opinions of U.S. Patents 579

Finally, due to the complexities of the issues and liabilities arising under U.S. securities laws, the importance of patent counsel working closely with securities counsel cannot be overstated.

IV. Highlights of Competent Evaluations and Opinions of U.S. Patents for Business Professionals Who Rely on Them for Securities and Other Issues This section provides a summary of important information about evaluations and opinions of U.S. patents for business professionals (such as corporate directors and auditors) who rely on them for securities disclosures and other issues (such as the avoidance of willful patent infringement). This is only a brief summary of the highlights and some of the minimum requirements for competent evaluations and opinions of U.S. patents. (Other sections of this treatise discuss these topics in more detail.) In particular, business professionals who rely on evaluations and opinions of U.S. patents should carefully review Chapter 23, which addresses in detail what U.S. courts have found are minimum requirements for legally competent evaluations and opinions of U.S. patents. Other sections of particular importance to this issue include Chapter 1 (overview of evaluations and opinions of U.S. patents), Chapter 2 (claim construction), Chapters 3–5 (patent infringement), Chapters 6–9 (patent validity), Chapter 10 (patent unenforceability), Chapter 11 (patent due diligence), Chapter 12 (clearance/freedom to operate evaluations and opinions), Chapter 18 (evaluations and opinions of patent portfolio strength and scope for commercial development strategies), and Chapter 24 (attorneyclient privilege and work product immunity issues related to evaluations and opinions of U.S. patents).

A. Minimum Requirements for Legally Competent Evaluations and Opinions of U.S. Patents As discussed in detail in Chapter 23, while there are no hard-and-fast rules as to what makes an evaluation or opinion of a U.S. patent legally competent, U.S. courts have held that there are certain minimum requirements of what legally competent patent evaluations or opinions should contain. The majority of these court cases have been in the context of patent infringement litigation in which a party has been found to infringe a patent, and the court is considering whether to enhance infringement damages for willful infringement. Willful patent infringement requires a showing of


objective recklessness on the part of the infringer. Reliance by an infringer on a competent opinion of counsel that a reasonable court should have found the infringed patent to not be infringed and/or to be invalid can provide evidence against willful infringement. However, to counter a charge of willfulness, an opinion must be legally competent, and the infringer must reasonably rely on the opinion. While most cases addressing the legal competency have been in the context of willful infringement, it is reasonable to assume that the minimum requirements for a legally competent opinion in this context would also apply to reliance on evaluations and opinions of patents in other contexts, including for securities compliance. 1. Evaluation and Opinion Must Not Be Conclusory Where an opinion makes “only bald, conclusory and unsupported remarks” a court may rule that the opinion is “incompetent on its face.”102 “A written opinion may be incompetent on its face by reason of its containing merely conclusory statements without discussion of facts or obviously presenting only a superficial or off-the-cuff analysis.”103 2. Claim Construction Is Required Proper and complete claim construction is required for evaluations and opinions of U.S. patents for almost all purposes. As discussed in Chapter 2 (claim construction), the claims of a patent define the patented subject matter. Thus, claim construction is required for the vast majority of evaluations and opinions of U.S. patents, including evaluations and opinions addressing patent scope, validity, infringement, enforceability, inventorship, and ownership. The rare exceptions to this rule include evaluations and opinions that consider issues totally unrelated to a patent’s claims (such as the term of a patent or whether patent maintenance fees have been properly paid). Claim construction is complex and is addressed in detail in Chapter 2. The most important aspects from the point of view of business professionals relying on evaluations and opinions of patents requiring claim construction are: (a) to be certain that the evaluation or opinion construes all of the patent’s claim terms; and (b) to be certain that the claim construction is based on a review of the proper evidence, including the full text of the patent, the claims, and the patent’s complete prosecution history in the U.S. Patent Office (including all related applications and any prior art cited in the patent or during prosecution). Therefore, a first necessary question to ask regarding any patent evaluation or opinion upon which one intends to rely is: does the evaluation or opinion expressly construe the terms of the patent’s claims? This is especially important for claim terms for which the meaning may not be immediately clear

102. Read Corp. v. Portec, Inc., 970 F.2d 816, 829 (Fed. Cir. 1992). 103. Id.


from reading the patent and the claims. However, all claim terms need to be construed, even if the construction is simply to note that the terms have their ordinary meaning in the relevant art. Second, one should be certain that the claim construction is based on a review of the patent (including the claims) and the complete prosecution history of the patent in the U.S. Patent Office (including the history of any related applications and all prior art cited in the patent or in the prosecution). A competent claim construction must take this evidence into consideration. For patents that claim priority to earlier U.S. patent applications—or that have U.S. patent applications claiming priority to them—the prosecution history to be reviewed for claim construction may include the prosecution histories of the related applications. Therefore, any patent evaluation or opinion that does not at least mention the patent’s prosecution history in its claim construction may be legally incompetent and should be investigated carefully before being relied upon. Even for patents in which the patent’s prosecution history does not shed light on claim construction, a competent evaluation or opinion should at least mention that the entire prosecution history was reviewed but was not significant for claim construction. 3. Explanation of Up-to-Date Relevant Law and Proper Application of the Law to the Facts A competent evaluation or opinion of a U.S. patent should discuss the up-todate relevant law and should correctly apply the law to the facts to reach the conclusions of the evaluation or opinion. A businessperson relying on a patent evaluation or opinion may not be able to judge whether the proper and most up-to-date law is discussed and applied in an evaluation or opinion. Nevertheless, a competent opinion should allow any reader to understand at least that all of the conclusions are based on the law summarized in the evaluation or opinion. Any suspected gaps in legal support for the conclusions reached in an evaluation or opinion of a patent should be investigated prior to reliance on it. To ensure compliance with this requirement, it may be beneficial to have a second patent attorney (e.g., in-house patent counsel) review patent evaluations and opinions for the proper application of the most up-to-date and correct law. 4. The Preparer of the Opinion “The competency requirement applies to both the qualifications of the person giving the opinion and to the content of the opinion itself.”104 For example, the Federal Circuit affirmed a district court’s determination of willful infringement of a U.S. patent in which the infringer defended against willful infringement by arguing reliance on a noninfringement opinion obtained from its

104. Jurgens v. CBK, Ltd., 80 F.3d 1566, 1572 (Fed. Cir. 1996).


in-house German patent counsel, but did not obtain an opinion from a U.S. patent attorney.105 U.S courts have also noted that if the preparer of a patent opinion is not a patent attorney, this fact is “not alone controlling, but does bear on the question whether [the infringer], when it sought advice, did so in good faith.”106 Additionally, U.S. courts have held that an opinion obtained from in-house counsel, as opposed to independent outside counsel, may be considered in determining whether the opinion was relied on in good faith.107 Courts may consider an opinion by outside counsel to be stronger than one prepared by in-house counsel due to the perceived independence of outside attorneys as compared with in-house attorneys.108 5. Level of Certainty Patent evaluations and opinions need not—and usually should not—contain absolute determinations and opinions. As discussed throughout this treatise, U.S. patent law is complex and constantly evolving, and evaluations and opinions of U.S. patents are necessarily based on facts that rarely allow one to conclude issues with certainty. Indeed, the Federal Circuit Court of Appeals has recognized that “[a]n opinion of counsel, of course, need not unequivocally state that the client will not be held liable for infringement. An honest opinion is more likely to speak of probabilities than certainties.”109 6. Evaluations and Opinions Should Be Written Evaluations, and especially opinions, of U.S. patents should be written. The Federal Circuit has clearly held: “As this court has recognized, oral opinions are not favored. Shiley, Inc. v. Bentley Lab., Inc., 601 F. Supp. 964, 968 (C.D. Cal. 1985), aff ’d., 794 F.2d 1561 (Fed. Cir. 1986); Bott, 807 F.2d at 1572.”110 The Federal Circuit has explained that oral opinions “carry less weight, for example,

105. Spindelfabrik Suessen-Schurr Stahlecker & Grill GmbH v. Schubert & Salzer Maschinenfabrik Aktiengesellschaft, 829 F.2d 1075, 1084 (Fed. Cir. 1987). 106. Underwater Devices v. Morrison-Knudsen Co., 717 F.2d 1380, 1390 (Fed. Cir. 1983), overruled on other grounds, In re Seagate Tech., LLC, 497 F.3d 1360 (Fed. Cir. 2007). 107. E.g., Underwater Devices, 717 F.2d at 1390. 108. Id.; Minnesota Mining & Mfg. Co. v. Johnson & Johnson Orthopaedics, Inc., 976 F.2d 1559, 1564 (Fed. Cir. 1992) (in-house opinion not objective). 109. E.g., Read Corp. v. Portec, Inc., 970 F.2d 816, 829 n.9 (Fed. Cir. 1992) (emphasis added); Westvaco Corp. v. International Paper Co., 991 F.2d 735, 744 (Fed. Cir. 1993) (in finding reasonable reliance on an opinion to avoid willful infringement, the court noted “[i]ndeed, counsel’s opinion letters in this case spoke in terms of probabilities. For example, the final version of the ’575 opinion letter stated that ‘it was more likely than not’ that the claims would be held invalid over the prior art.”). 110. Minn. Mining, 976 F.2d at 1580 (emphasis added).


because they have to be proved perhaps years after the event, based only on testimony which may be affected by faded memories and the forces of contemporaneous litigation.”111 7. Timing of Opinions Opinions of noninfringement or invalidity to avoid willful infringement should be delivered prior to the beginning of the potentially infringing activity.112 Similarly, for securities issues, evaluations and opinions must be obtained at the time upon which they are relied. Advice obtained after the fact may be of only limited (if any) value. For example, as explained above in the Medtest case, the fact that an event eventually occurred after a statement was not a defense for a company’s misrepresentation that the event had occurred at the time of the securities statement.113 8. Evaluations and Opinions of Patent Noninfringement, Infringement, or Claim Scope In accordance with the requirements addressed above, a person creating a competent evaluation or opinion of noninfringement, infringement, or claim scope should review the complete prosecution history of the patent (including all related applications), review the specification and the prior art, and construe the claims based on this. Proper construction defines the claim’s scope. Infringement is determined by comparing the objectively construed claims with the potentially infringing product or process.114 Further, infringement and noninfringement evaluations and opinions should consider both literal infringement and infringement under the doctrine of equivalents.115 Additionally, it is important for a noninfringement opinion to describe accurately the potentially infringing product or process when it is compared with the claims of the patent-at-issue.116 An opinion of noninfringement is only relevant to the potentially infringing product or process exactly as it is described and applied in the opinion.117 Therefore, a noninfringement

111. Id. 112. E.g., Underwater Devices, 717 F.2d at 1390. 113. Pommer v. Medtest Corp., 961 F.2d 620, 623 (7th Cir. 1992) (The fact that an event later occurred was not a defense to a company’s misrepresentation at the time of a securities statement that an event had occurred, when at the time of the statement the event had not occurred and the company did not know whether it would occur.). 114. E.g., Graco, Inc. v. Binks Mfg. Co., 60 F.3d 785, 793 (Fed. Cir. 1995) (“[T]he opinion provided a detailed infringement analysis.”). 115. Westvaco Corp. v. International Paper Co., 991 F.2d 735, 744 (Fed. Cir. 1993); Ortho Pharm. Corp. v. Smith, 959 F.2d 936, 945 (Fed. Cir. 1992); Sensonics, Inc. v. Aerosonic Corp., 81 F.3d 1566, 1571 (Fed. Cir. 1996). 116. Westvaco, 991 F.2d at 744; Graco, 60 F.3d at 792. 117. Westvaco, 991 F.2d at 744; Graco, 60 F.3d at 792.


opinion for a commercial product or process must accurately describe the commercial product or process—and must apply the properly construed claims to that description in order to conclude that the commercial product or process does not infringe.118 9. Evaluations and Opinions of Patent Invalidity In accordance with the requirements addressed above, a person creating a competent evaluation or opinion of patent invalidity should review the complete prosecution history of the patent (including all related applications), review the specification and the prior art, and construe the claims based on this. Then, the person should compare the objectively construed claims with the potentially invalidating prior art (for prior art-based invalidity) or with the specification (e.g., for written description and enablement-based invalidity).119 Additionally, it is important for a person giving an invalidity opinion to, if possible, search for and apply prior art that was not considered by the Patent Office in allowing the patent.120 In addition, invalidity opinions must address every claim that is at issue, including the dependent ones.121 Still further, opinions of invalidity based on obviousness under 35 U.S.C. § 103 should address secondary considerations as “objective indicia” of non-obviousness.122

V. Practice Points A. Patent Counsel Should Always Work Closely with Securities Counsel on Any Issues That May Involve Securities Laws or Regulations As a rule, patent counsel should always work closely with securities counsel on any U.S. patent or patent-related issues that may involve securities laws

118. Westvaco, 991 F.2d at 744; Graco, 60 F.3d at 792. 119. E.g., Johns Hopkins Univ. v. CellPro, Inc., 152 F.3d 1342, 1364 (Fed. Cir. 1998); In re Hayes Microcomputer Prods., Inc. Patent Litigation, 982 F.2d 1527, 1543 (Fed. Cir. 1992). 120. Central Soya Co. v. Geo. A. Hormel & Co., 723 F.2d 1573, 1576–77 (Fed. Cir. 1983) (finding that an opinion that relied only on prior art from the prosecution history did not overcome willfulness); Hayes, 982 F.2d at 1543 (opinion “mischaracterized prior art. . . .”). 121. CellPro, 152 F.3d at 1363–64; Hayes, 982 F.2d at 1543 (opinion “treated the claims of the ’302 patent superficially. . . .”). 122. Hayes, 982 F.2d at 1543 (opinion “failed to consider secondary considerations in determining obviousness. . . .”); Stratoflex v. Aeroquip Corp., 713 F.2d 1530, 1539 (Fed. Cir. 1983) (evidence of objective considerations of non-obviousness must always be taken into account).

Practice Points

or regulations. U.S. securities laws are not only complex and specialized, but they carry potentially serious liabilities, including personal liabilities that may not be covered by indemnities or insurance. Moreover, patent attorneys are not excluded per se from compliance with any U.S. securities laws or regulations.

B. Patent Attorneys Should Be Aware of Situations That May Trigger Reporting Responsibilities Under the Sarbanes-Oxley Act As discussed in detail above, certain acts by patent attorneys in the representation of a client may trigger reporting obligations under Sarbanes-Oxley. SOX applies to any attorneys who act within the Act’s definition of “appearing and practicing before the [U.S. Securities and Exchange] Commission.” However, Sarbanes-Oxley generally does not apply to attorneys who have prepared documents, including evaluations and opinions of U.S. patents, where the drafting attorney never intended or had notice that the documents or portions thereof would be submitted to the SEC.

C. Patent Counsel Should Be Aware of Issues That Could Trigger Potential Liabilities Under U.S. Securities Laws and Regulations Whenever a patent attorney is reviewing any document that he or she knows or believes may be submitted (or its contents) in full or in part to the SEC, the attorney may be exposed to liability under U.S. securities laws and regulations. In such cases, it is best to exercise caution, including early and frequent consultation with securities counsel on how to mitigate or eliminate potential exposure to securities liability. For example, to avoid potential issues with securities laws and regulations, evaluations and opinions of U.S. patents typically contain language attempting to exclude or limit any potential liability under these laws and regulations. For example, evaluations and opinions of U.S. patents typically include language advising the client that the document and its conclusions are not to be used in connection with any securities matters, and that the attorneys and law firm preparing the evaluation or opinion do not represent the client in any securities issues regarding the document or its contents. This typically includes a disclaimer that nothing in the evaluation or opinion should be construed to cause the attorneys or law firm to be considered “experts” within the meaning of Section 11 of the Securities Act. In addition, opinions generally state that nothing in the evaluation or opinion, in whole or in part, is intended to be submitted to the SEC or used in any securities-related context.

585


For purposes of illustrating situations in which U.S. patent issues have intersected with U.S. securities laws, this chapter discusses a number of such cases from U.S. courts. These involve, for example, misrepresentations and omissions in securities-related disclosures by corporations concerning: (a) potentially invalid patent rights; (b) the status of patent applications and patents; (c) the scope of patent claim coverage; (d) the status of patent litigation; and (e) the content of patent attorneys’ opinions.

D. Securities Laws Provide Some Means of Avoiding Liability In certain specific situations, liabilities under securities laws may be avoided. For example, the due diligence defense and the bespeaks caution doctrine, if properly applied, may allow an attorney to avoid liability under certain securities laws and regulations. However, patent attorneys should not rely on these for the avoidance of potential liabilities under securities laws and regulations without the guidance of competent securities counsel.

E. Patent Audits Aid in Disclosure Compliance Under Securities Laws When patent rights are material to the business of a company, and disclosure about those rights is made in reports or registration statements filed with the SEC, or there is value assigned to those patent rights that is reflected in the assets on a company’s balance sheet included in such reports or registration statements, a patent audit is the recommended means of ensuring compliance with SEC disclosure requirements. This includes compliance with SEC Regulation S-K, Item 101(c)(iv), which expressly requires that when an issuer has patent rights that are material, the description of the issuer’s business in registration statements filed under the Securities Act or in periodic reports filed under the Exchange Act must discuss “the importance . . . and the duration and effect of all patents [and] licenses held” for patent rights that are material to an issuer’s business.123 Finally, a patent audit is recommended as a means to comply with any patent-related disclosure requirements that may be associated with the financial reporting requirements of SOX when a company has patent rights that are material to the company’s financial reporting under SOX.

123. 17 C.F.R. § 229.101(c)(iv).

Practice Points

F. Highlights of Competent Evaluations and Opinions of U.S. Patents for Business Professionals Who Rely on Them for Securities and Other Issues Section IV of this chapter discusses the highlights of competent evaluations and opinions of U.S. patents for business professionals who rely on them for securities and other issues. It is critical that all evaluations and opinions of patents follow the requirements set forth by U.S. courts for competent opinions. These are briefly discussed in Section IV above and in detail in Chapter 23. Reliance on an incompetent evaluations or opinions of patents might subject the relying party to liability under U.S. securities and other laws. Some of the main highlights are also summarized below. 1. Must Construe Claims Virtually any patent evaluation or opinion must construe the patent’s claims. Claim construction is, therefore, necessary for evaluations and opinions of claim scope, infringement, noninfringement, validity, enforceability, inventorship, and ownership. 2. Must Examine All Relevant Prosecution Histories Any patent evaluation or opinion that must construe a patent’s claims must review the entire prosecution history of the patent. This includes the prosecution histories of all patent applications that are related to the patent at issue and have a common claim term, including applications that are directly related as earlier or later applications and applications that are related through a common application. An evaluation and opinion that does not consider all relevant prosecution histories may not be legally competent. 3. Must Consider All Claims for Invalidity Evaluations and Opinions Patent validity evaluations and opinions must separately and completely address every claim of a patent. This is because for purposes of validity, a patent’s claims stand or fall independently of one another. Therefore, every claim of a patent must be construed, evaluated, or opined on in a validity or invalidity evaluation or opinion. Infringement evaluations and opinions may consider only the independent claims if no infringement of the independent claims is found. This is because there can be no infringement of a dependent claim if the independent claim from which it depends is not infringed.

587


4. Infringement Evaluations and Opinions Require a Clear Understanding of the Potentially Infringing Subject Matter Infringement evaluations or opinions require a clear and thorough understanding of the potentially infringing subject matter. An infringement evaluation or opinion is only as good as the information on which it is based. Therefore, opinions of infringement or noninfringement must accurately describe the potentially infringing subject matter, and should caution that any deviation from the described subject matter may not be covered by the evaluation or opinion. Thus, for example, an opinion of noninfringement of a commercial product or process must be based on an accurate description of the actual commercial embodiment of the product or process.

CHAP T ER

17 Evaluating and Opining on One’s Own Patent Rights Evaluations and Opinions of Patentability for Potentially New Inventions

I. Overview of Evaluations and Opinions of Patentability

592

II. Avoid Negative Written Statements About a Client’s Intellectual Property, Such as Written Statements That Subject Matter Is or May Not Be Patentable

593

III. The Claims Are Paramount: The Claims, and Only the Claims, Define the Patent Grant

594

IV. Understand the Full Scope of the Invention

595

A. Determine All Possible Aspects of an Invention, Including All Possible Embodiments

596

1. The Scope and Nature of an Invention May Be Affected by the Prior Art

597

2. Commercial Embodiments and Other Aspects of a Company’s Strategic Patenting May Influence the Scope of the Claims

598

V. Claiming the Invention

599

A. Expressly Define Important Terms

599

B. Construe Claims

599

C. Assure That the Claims Are Definite, and That the Invention Is Capable of Description in Definite Terms

600

D. Claim All Possible Inventions

601

VI. Determining Patentable Subject Matter: A Reiterative Approach A. The Claims Must First Be Objectively Construed and Then Compared with the Prior Art or the Invention Disclosure to Determine Whether the Claims Are Patentable

589

601

601

590

Chapter 17 Evaluating and Opining on One’s Own Patent Rights B. Anticipation 1. If the Original Claims Are Likely to Be Anticipated, Review the Invention Disclosure and Consider Different Claims, Such as More Narrow Claims to Distinguish the Invention from the Prior Art C. Obviousness 1. If the Original Claims Are Likely to Be Obvious, Review the Invention Disclosure and Consider Whether It Is Possible to Draft Different Claims, Such as More Narrow Claims to Overcome the Potential Obviousness D. Specification-Based Lack of Patentability and Other Forms of Unpatentability 1. If the Original Claims Are Likely to Have Specification-Based Patentability Problems or Indefiniteness Problems, Review the Invention Disclosure and Consider Modifying the Invention Disclosure, Including Adding Support or Modifying the Claims (Such as Narrowing the Claims or Changing the Terms in the Claims to Overcome Potential Unpatentability Issues) E. Non-Statutory Subject Matter

602

603 604

605 606

607 609

VII. Determine How Invention Fits with a Company’s Strategic Patenting Goals

611

VIII. Other Issues of Importance to New Inventions

611

A. Is the Inventorship Clearly Assignable to the Company?

611

B. Investigate Potential Nonstatutory Obviousness-Type Double-Patenting Issues

614

IX. Practice Points

615

A. Avoid Expressing Doubts about Patentability in Writing

615

B. Prior to Beginning Any Evaluation or Opinion of Patentability of a Potentially New Invention, It is Essential for the Reviewing Attorney to Obtain a Thorough Understanding of the Invention

616

C. It Is Best if the Evaluating Attorney Can Work Closely with the Inventors Throughout the Evaluation Process

616

D. A Patent Attorney May Guide the Inventors to Disclose Additional Aspects or Embodiments of Their Invention, but Must Not Become a Co-Inventor

616

Evaluating and Opining on One’s Own Patent Rights E. Prior to Analyzing the Invention for Patentability, the Invention Must Be Claimed and the Claims Must Be Construed

617

F. A Proper Patentability Evaluation or Opinion Ensures That the Invention Description Is Sufficient to Enable, Describe, and Define the Claimed Subject Matter

617

G. Ask the Inventors about Best Mode and Assure That the Description of the Invention Enables the Best Mode

618

H. Apply the Proper Law and Analysis

618

I. Even if an Invention Is Patentable, There May Not Be a Reason to Obtain a Patent; Strategic Patenting Requires That a Patent Application Lead to a Useful Patent

618

J. Consider Other Issues Such as Inventorship/Ownership and Potential Nonstatutory Obviousness-Type Double Patenting

619

591


I. Overview of Evaluations and Opinions of Patentability This chapter discusses evaluating and opining on the patentability of potentially new inventions. This process involves several discrete steps. First, the invention must be understood fully and accurately by the attorney performing the analysis. This is critically important. As discussed below, ideally this is done by the patent attorney working closely with the inventors. Because a patent attorney may often view an invention somewhat differently from an inventor, it is important that the attorney work with the inventors so that the result is a description of the invention that is as broad as possible, yet is fully supported and described—and is not so broad as to be unpatentable over prior art. Once the invention is understood, the patent attorney next describes the potentially patentable aspects of the invention as patent claims. It is important that the attorney draft claims at this point in the analysis. There may be a hesitation to do so at this early stage in the evaluation process because of concern that claims may need to be changed as the patentability of the potential invention is evaluated, and that the result of the analysis might be that the invention is determined to be not sufficiently patentable, or commercially worthy, to pursue preparing and filing a patent application. Nonetheless, claims must be drafted at this point, and potentially modified during the patentability evaluation (as discussed below), because it is not possible at any time to evaluate the patentability of a potential invention without analyzing construed claims covering the potential invention. When the invention has been thoroughly explored (including potentially expanded to cover additional inventive subject matter), and claims have been prepared and construed covering the potentially new invention, the next step is to analyze the construed claims for patentability. This is very similar to evaluating and opining on the validity of claims in an issued patent. One of the differences is that the description of the potentially new invention plays the role that a patent’s specification does in an invalidity analysis. Additionally, there is no prosecution history in the U.S. Patent Office to consider when construing the claims. The evaluation of claims of a potentially new invention for patentability is often conducted in a reiterative fashion. If the initial review determines there may be patentability issues with the original claims, the evaluating attorney drafts different claims to address and overcome these issues. Ideally, when doing so, the attorney consults with the inventors to be certain that the claims always focus on and cover the potentially new invention. The new set of claims is then evaluated for patentability. Should issues of patentability remain, the claims are modified again. This process is performed until claims have been drafted that are free from patentability issues, or it is determined that the invention is not sufficiently patentable to warrant further attention.

Avoid Negative Written Statements About a Client’s Intellectual Property 593

The next step is to compare the likely scope of patentable claims with the company’s strategic patenting goals. (Strategic patenting is discussed in detail in Chapter 18.) Generally, it involves a coordinated effort to: (a) obtain patent rights that cover a company’s current and future commercial technology; (b) obtain patent rights that provide maximum leverage over a company’s competitors; and/or (c) obtain patent rights that may be sold or licensed to others to provide income to a company. A major purpose of strategic patenting is to avoid needless, unfocused patenting. Under strategic patenting, potentially patentable claims are reviewed to determine whether they fall within the company’s strategic patenting goals. If so, a patent application is prepared, filed, and prosecuted. If the potentially patentable claims clearly fall outside the scope of subject matter that a company would seek under its strategic patenting goals, the project is terminated and no patent application is prepared or filed.

II. Avoid Negative Written Statements About a Client’s Intellectual Property, Such as Written Statements That Subject Matter Is or May Not Be Patentable As a rule, when evaluating a company’s potentially new invention for patentability, attorneys should avoid making negative written statements about a client’s patent rights, including potential patentability. One reason is that such statements may, in fact, not be accurate. Nonetheless, should such statements be discovered later (e.g., by a defendant in an infringement litigation), they could pose problems for a company in enforcing its patent rights. For example, in the context of evaluating or opining on the potential patentability of a potentially new invention, a determination that the subject matter may not be patentable could be based on incomplete facts, an incomplete understanding of the invention by the reviewing attorney at the time, or a misunderstanding of the invention by the reviewing attorney at the time. Therefore, it is entirely possible that further review of the patentability of the same invention could lead to a different conclusion: a finding the invention is likely to be patentable. However, if in such a case a patent is obtained on the invention and subsequently enforced in infringement litigation, the existence of early negative statements about the potential patentability could pose problems. For example, if such statements are discovered by an infringement defendant, the defendant could attempt to use the negative written statements to show that the patent was obtained by fraud on the Patent Office, or is being misused, thus causing patent unenforceability.1 For example, a negative written

1. See Chapter 10 for detailed information on patent enforceability, including inequitable conduct.

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statement could have been based on prior art that was not cited to the Patent Office during prosecution of the patent application, perhaps because the prior art was later determined to be nonmaterial based on a correct understanding of the claimed invention, or perhaps due to an innocent oversight. Nonetheless, the defendant in such a case could attempt to show that based on the written statement, the patent applicant knew about the prior art, including that it was material to patentability, and the patent applicant intentionally withheld the material information from the Patent Office in procuring the issued patent. This could lead to a court holding that the patent is unenforceable. A defendant could attempt to use negative written statements against a patentee in other ways as well, such as asserting sham litigation by a patentee trying to enforce a patent that it “knows” is invalid. Therefore, it is best to communicate negative findings regarding patentability verbally to a client. As discussed below, initial impressions of unpatentability in a patentability evaluation or opinion may be overcome by the correction of the description of the invention, the claiming of the invention, or the understanding of the invention by the reviewing attorney. In fact, as discussed below, such evolution in the understanding, description, and claiming of an invention can be a regular part of patentability evaluations and opinions for potentially new inventions.

III. The Claims Are Paramount: The Claims, and Only the Claims, Define the Patent Grant As discussed in detail in Chapter 2—and reiterated in virtually every chapter of this book—the claims of a patent are paramount. The U.S. government grants patentees the exclusive but temporary right to prohibit others from making, using, selling, offering to sell in the United States, or importing into the United States anything that falls within the scope of a patent’s claims. Therefore, the claims of a patent define the patented subject matter. For this reason, virtually any evaluation and opinion of a patent must consider the patent’s claims. This includes patentability evaluations and opinions. Therefore, a potentially new invention must be claimed before it can be evaluated for patentability. As shown below, only claims can be properly evaluated for patentability and scope. The primacy of a patent’s claims was summarized by the Federal Circuit in its en banc Phillips case: It is a “bedrock principle” of patent law that “the claims of a patent define the invention to which the patentee is entitled the right to exclude.” Innova, 381 F.3d at 115; see also Vitronics, 90 F.3d at 1582 (“we look to the words of the claims themselves . . . to define the scope of the patented invention”); Markman, 52 F.3d at 980 (“The written description part of the specification itself does not

Understand the Full Scope of the Invention 595 delimit the right to exclude. That is the function and purpose of claims.”). That principle has been recognized since at least 1836, when Congress first required that the specification include a portion in which the inventor “shall particularly specify and point out the part, improvement, or combination, which he claims as his own invention or discovery.” Act of July 4, 1836, ch. 357, § 6, 5 Stat. 117, 119. In the following years, the Supreme Court made clear that the claims are “of primary importance, in the effort to ascertain precisely what it is that is patented.” Merrill v. Yeomans, 94 U.S. 568, 570, 24 L. Ed. 235, 1877 Dec. Comm’r Pat. 279 (1877).2

In its en banc Markman decision, the Federal Circuit stated: “The written description part of the specification itself does not delimit the right to exclude. That is the function and purpose of the claims.”3 Further, in Vitronics, the court indicated: “First, we look to the words of the claims themselves, both asserted and nonasserted, to define the scope of the patented invention.”4

IV. Understand the Full Scope of the Invention Prior to writing claims for a potentially new invention, it is important for one to gain both a broad and specific understanding of it. Typically, when evaluating or opining on patentability of potentially new inventions, one is given an invention disclosure. This generally provides background for the invention, including references describing the relevant art and the state of the art at the time of the invention. Invention disclosures usually also describe the specific subject matter that the invention purports to build upon or to improve. Of course, invention disclosures also describe the subject matter that the inventors believe is their invention. Frequently, invention disclosures relate a problem solved by the invention or identify technology improved upon by the invention. Additionally, inventors are usually asked to submit and describe the closest prior art to their invention and to describe how their invention differs from that art. Other information such as who is believed to have made the invention, the date of the invention, any possible disclosures of the invention, and detailed evidence of the invention is also included. It is important to study closely all information provided in an invention disclosure. Often, inventive aspects are best understood and appreciated when one understands the state of the art in which an invention occurred,

2. Phillips v. AWH Corp., 415 F.3d 1303, 1312 (Fed. Cir. 2005) (en banc) (emphasis added). 3. Markman v. Westview Instruments, Inc., 52 F.3d 967, 980 (Fed. Cir. 1995) (en banc), aff ’d, 517 U.S. 370 (1996). 4. Vitronics Corp. v. Conceptronic, Inc., 90 F.3d 1582 (Fed. Cir. 1996).


the problem in the art purported to be solved, and the art purported to be improved upon by an invention. Ideally, the inventors are available to work with the attorney in understanding the invention. Virtually inevitably, as an attorney works to understand an invention and prepare a more detailed written description of an invention and claims covering an invention, the inventors will provide further details clarifying, expanding, or limiting their invention.

A. Determine All Possible Aspects of an Invention, Including All Possible Embodiments Commonly, inventors initially describe only one or a few embodiments of their invention, such as only one way of making a potentially patentable new compound or performing a potentially patentable method. It is important in such cases to try to expand the scope of the description of the invention to include alternative embodiments. Additional alternative embodiments generally describe the same inventive concept, but broaden its scope, thus allowing claims covering the invention to have as broad a scope as possible, yet still be supported by the description of the invention. For example, where a potentially patentable compound has been created, there may be multiple ways of making the potentially novel compound. If so, it is important to describe these alterative embodiments. Another example involves so-called “genus-species” issues such as when an invention is described using one member (a species) of a broader class (a genus) of compounds that are similar in structure or function. In such a case, the inventors and attorney should investigate whether other members (species) of the broader class (genus) could be substituted for the original member (species) to achieve equivalent results. An example is an invention that discloses a novel molecule in its salt form, wherein a specific salt (species) of a broader known class of salts (genus) is used. In such a case, the inventors should investigate whether other salts (species) within the broader class of salts (genus) could be substituted with equivalent results. If so, this may allow the invention to be claimed as the novel molecule in its salt form in which the salt is any specific salt (species) within the broader defined class (genus), instead of only one specific salt. Sometimes the inventors may need to engage in additional experimentation to verify expansion of the disclosure. This is usually worth the effort as the potential gain in patent claim scope usually outweighs the burden of additional experimentation. As discussed below (and in detail in Chapter 9 regarding enablement and written description), expanding the scope of claim support in the description can have dramatic effects on the scope of claims that may be obtained. When access to the inventors is possible, generally they readily provide additional embodiments. This is especially the case when the analyzing attorney explains to the inventors the importance of describing

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their invention in various ways and illustrative embodiments to obtain broader patent claims. In addition to expanding the scope of alternative embodiments of the same invention, when writing a description of an invention with inventors, additional related inventions may arise.5 Typical examples include the recognition of new methods of making new compounds and the recognition of new uses of new compounds. As discussed below, when separate inventions are disclosed, the claims should reflect these additional inventions. For example, when an original invention disclosure taught a potentially patentable compound, and a potentially patentable use of the compound was discovered by the inventors in more fully describing their invention, claims for the invention would include two sets of claims: one on the potentially patentable compound, and a separate set of claims on the potentially patentable new use of the compound. 1. The Scope and Nature of an Invention May Be Affected by the Prior Art In an analysis of a potentially new invention, the prior art may play a significant role in determining the scope and nature of claims describing it. In fact, this is usually the case as drafting claims to overcome prior art issues is usually part of the reiterative patentability review and claim adjustment process discussed herein. However, to increase the efficiency of the reiterative process by decreasing the need to adjust claim scope multiple times, it is generally good practice to have as complete an understanding as is possible of the relevant prior art when originally describing and claiming a potentially patentable invention. Often, the inventors are an excellent source of prior art because they are usually at the leading edge of the relevant technology and, thus, are familiar with

5. However, in these situations it is important for the attorney to avoid becoming a co-inventor. An attorney can potentially become a co-inventor when the attorney suggests specific modifications or improvements to an invention in which the level of contribution rises to the level of inventive input. This should be avoided for a host of reasons, including potential issues with inventorship and ownership. A prudent and cautious attorney should be able to avoid this issue and still work with inventors to expand their invention disclosure, even to include additional inventions. Potential co-inventorship issues can generally be avoided by an attorney only guiding the inventors to consider expanding their invention while never suggesting specific subject matter or anything specifically related to the invention. Rather, an attorney should explain to the inventors, in the abstract, the legal requirements that an invention disclosure must meet in order to support broad patent claims and other legal issues relating objectively to any invention disclosure. The attorney should then allow the inventors to decide exactly how to expand their invention and its description.


the closest prior art to the invention. This is especially the case where the closest prior art is recent art. However, in certain instances prior art that is several years old may affect the patentability of a potentially new invention. For example, an invention claiming a specific new aspect (a species) of an old technology (a genus) may face problems with older references that broadly describe the subject matter (the genus) in which the specific invention (a species) has been made. In such cases, the inventors may be unaware of—or not appreciate the effect of—the older prior art. While it may be possible to overcome this prior art, for example by emphasizing unique, unexpected, or unpredicted aspects of the invention (the species) that were not disclosed by or obvious from the broad subject matter (the genus), this prior art must nonetheless be addressed. Therefore, even where inventors are thoroughly knowledgeable about and up-to-date on the prior art relevant to their potentially new invention, it is still advisable to engage at least one independent prior art searching agency to perform a search for prior art that may be relevant to the potentially new invention. For example, it is usually well worth the cost and effort to locate as early as possible in the patenting process any prior art that could potentially render the entire invention unpatentable. Otherwise, such art might not arise until well into the prosecution of a patent application—or not even until a patent issues and the patent owner sues to enforce it. In such a case, invalidating prior art could be discovered by the defendant in an infringement litigation that could invalidate all claims of the patent. 2. Commercial Embodiments and Other Aspects of a Company’s Strategic Patenting May Influence the Scope of the Claims As discussed in detail in Chapter 18, a company should never lose sight of its strategic patenting objectives. This includes assuring that its efforts at obtaining new patents are directed primarily to patents that cover its current and proposed commercial technology or may provide important leverage over its competitors. Therefore, these issues should always be considered when performing evaluations or opinions of patentability of potentially new inventions. In this regard, it may be helpful to educate—or remind—inventors on the commercial goals of a company’s patenting efforts. This may be especially important when a company’s commercial goals are different from the most interesting academic aspects of an invention, especially where the inventors may be academically inclined. This is a particularly common issue where, for example, inventors are affiliated with research institutions such as universities. In such cases, the attorney preparing the patentability evaluation may need to guide the inventors into recognizing and focusing on aspects of their invention that are commercially important to industry and fit within a

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company’s strategic patenting goals instead of on issues that may be more academically or intellectually interesting to the inventors. This may even include shifting the emphasis of the invention from aspects that the inventors originally emphasized in their invention disclosures to aspects more suitable to a company’s strategic patenting goals.6

V. Claiming the Invention After obtaining a complete understanding of a potential invention (including working with the inventors, if possible, to refine, broaden, and perhaps even redefine its aspects), the next step in a patentability evaluation or opinion is to prepare claims for it. Chapter 2 discusses claims, claim construction, and claiming issues in detail. This section discusses the highlights of drafting claims for purposes of evaluating patentability of potentially new inventions. Generally, the claims should be broad enough to cover the potentially patentable subject matter of the invention, yet narrow enough to avoid problems with prior art; they should also be fully enabled and supported by a detailed description of the potential new invention.

A. Expressly Define Important Terms For reasons discussed in Chapter 2, it is desirable for a patent to define expressly claim terms that might not be entirely clear from the art and the invention’s description, including where a meaning is given to a term that may differ from its commonly understood meaning in the relevant art.

B. Construe Claims Like invalidity evaluations and opinions, patentability evaluations and opinions of potentially new inventions are performed by comparing construed claims that are representative of an invention disclosure with issues that may bar patenting that subject matter, such as prior art publications and claim support and description issues. Thus, once claims have been drafted for an invention disclosure, and claim terms have been expressly defined as necessary,

6. However, as discussed above, it is always important that an attorney working with inventors be aware of (and avoid taking) any actions that could possibly lead to the attorney becoming a co-inventor.


it is also necessary to construe the claims prior to evaluating their patentability. However, because the evaluating attorney is usually the same person who is drafting the claims, and there is no prosecution history on which claims might otherwise have to be construed, claim construction is generally only a formality prior to comparing the claims with potentially invalidating issues. However, in order to be consistent with Federal Circuit law for determining claim validity, it is recommended that claims drafted for purposes of determining patentability be construed at least to some extent. Typically this may be accomplished simply by noting that the claim terms have their ordinary meaning to one of skill in the relevant art, except for any expressly defined claim terms. However, for any claim language that could arguably be capable of more than one interpretation, it is recommended that a patentability evaluation or opinion construe that language. For example, claim construction in a typical patentability evaluation or opinion is based on the claims as drafted from the invention disclosure, including any expressly defined terms, and any additional claim language needing clarification. Situations where it may be helpful to construe claims in patentability evaluations and opinions may include situations: (a) where method steps do (or do not) have to be performed in a particular order; (b) where the preamble is (or is not) a claim limitation; and (c) where a claim is (or is not) intended to be a meansplus-function claim.

C. Assure That the Claims Are Definite, and That the Invention Is Capable of Description in Definite Terms As discussed below (and in detail in Chapter 9), patent claims are unpatentable under Section 112, second paragraph regarding definiteness (35 U.S.C. § 112, P 2)7 when they are insolvably ambiguous. In most cases, this is not an issue in patentability evaluations and opinions because claim language can be selected and defined to avoid indefiniteness issues. However, on rare occasions it may not be possible to define certain claimed subject matter with sufficient definiteness to satisfy Section 112, second paragraph.8 Therefore, this issue should be considered when evaluating and opining on patentability.

7. 35 U.S.C.S. § 112, P 2 (2009). 8. However, as discussed in Section II above, concerns about unpatentability of an invention (including under Section 112, second paragraph) should generally not be expressed in writing.

Determining Patentable Subject Matter

D. Claim All Possible Inventions As discussed above, a single invention disclosure may contain more than one invention—for example, both a potentially patentable new compound and a new use of the compound. In such cases, it is important to prepare separate sets of claims for each invention and to separately evaluate and opine on the patentability of each claim set.

VI. Determining Patentable Subject Matter: A Reiterative Approach When an invention disclosure has been thoroughly evaluated, claims drafted covering the possible inventions disclosed, and claims construed to the extent discussed above, the next step is to examine the claims for potential patentability. This step of the process is quite similar to a patent validity evaluation or opinion. The construed claims are considered as if they were construed claims of an issued patent, and the invention disclosure (as expanded or modified as discussed above) is treated as if it were the specification of a patent. The patentability of the claims is then evaluated in the same manner as one evaluates the validity of a patent’s claims (as discussed in Chapters 6–9). One of the more notable differences is that there is no prosecution history to be considered when evaluating and opining on the patentability of a potentially new invention. Because the analysis of the construed claims of the invention for determining patentability is virtually the same as an analysis of an issued patent’s claims for determining validity, the reader is directed to Chapters 6–9 for a detailed discussion of this process. Specifically, Chapter 6 discusses anticipation based on printed publication, Chapter 7 discusses other forms of anticipation, Chapter 8 discusses obviousness, and Chapter 9 discusses other forms of invalidity, including issues relating to the sufficiency of the specification in enabling and describing the claimed subject matter (the enablement and written description requirements of 35 U.S.C. § 112, first paragraph). However, for convenience, these issues are also discussed briefly below.

A. The Claims Must First Be Objectively Construed and Then Compared with the Prior Art or the Invention Disclosure to Determine Whether the Claims Are Patentable Patentability is determined by examining each construed claim against the prior art for prior art-based invalidity (i.e., Section 102 anticipation (as discussed in

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Chapters 6 and 7) and Section 103 obviousness (as discussed in Chapter 8)), or the specification, for specification-based invalidity (i.e., Section 112, first paragraph, enablement, and written description, and Section 112, second paragraph, definiteness (as discussed in Chapter 9)). In either situation, the claim must first be construed under the claim construction rules provided in Chapter 2 and discussed above. As provided above, claim construction for a potentially new invention is based on the disclosure of the invention, including any specifically defined or construed claim terms. Federal Circuit jurisprudence clearly holds that “[a]n anticipation analysis requires a comparison of the construed claim to the prior art.”9 The Federal Circuit has explained: An invention is anticipated under 35 U.S.C. § 102(b) if it “was . . . described in a printed publication in this . . . country . . . more than one year prior to the date of application for patent in the United States.” 35 U.S.C. § 102(b). The first step of an anticipation analysis is claim construction. See Key Pharms. v. Hercon Labs. Corp., 161 F.3d 709, 714 (Fed. Cir. 1998).10

B. Anticipation “A patent is invalid for anticipation [under 35 U.S.C. § 102] if a single prior art reference discloses each and every limitation of the claimed invention.”11 “Moreover, a prior art reference may anticipate without disclosing a feature of the claimed invention if that missing characteristic is necessarily present, or inherent, in the single anticipating reference.”12 Perhaps the most common basis for finding claims in issued patents invalid for anticipation—and for finding invention disclosures to be unpatentable— is printed publication prior art under Section 102(b). As discussed in detail in Chapter 6, “[i]f the claimed invention was ‘described in a printed publication’ . . . more than one year before the U.S. patent application was filed, 35 U.S.C. § 102(b), then that prior art anticipates the patent.”13 Therefore, it is important to thoroughly search and evaluate the prior art pertaining to the invention being analyzed for patentability to determine

9. Astra Aktiebolag v. Andrx Pharms., Inc. (In re Omeprazole Patent Litig.), 483 F.3d 1364, 1371 (Fed. Cir. 2007) (emphasis added); N. Am. Container, Inc. v. Plastipak Packaging, Inc., 415 F.3d 1335, 1344 (Fed. Cir. 2005). 10. Helifix, Ltd. v. Blok-Lok, Ltd., 208 F.3d 1339, 1346 (Fed. Cir. 2000) (emphasis added). 11. E.g., Schering Corp. v. Geneva Pharms., Inc., 339 F.3d 1373, 1377 (Fed. Cir. 2003). 12. E.g., id. at 1377; Continental Can Co. v. Monsanto Co., 948 F.2d 1264, 1268 (Fed. Cir. 1991). 13. E.g., Finisar Corp. v. DirecTV Group, Inc., 523 F.3d 1323, 1334 (Fed. Cir. 2008).


whether the claimed invention has been described in a printed publication more than one year before the filing date of an application for a patent on the invention. Inventors typically have a thorough understanding of the prior art relevant to their inventions. Therefore, asking the inventors to provide potentially relevant prior art is usually a good start for additional searching for potentially invalidating prior art. It is also recommended to use at least one independent searching agency to search for printed publication prior art under Section 102(b). Evidence for other forms of anticipation, such as the on-sale bar of Section 102(b) (discussed in Chapter 7) is usually more difficult to locate than printed publications. Inventors should always be educated on these types of patentability bars and on their duty of candor and good faith to the U.S. Patent Office, including their duty to disclose to the Patent Office everything they know that may be material to patentability of their invention if filed as a U.S. patent application.14 Then, inventors should be asked whether they know of any information (including their own acts) that might relate to any of the patentability bars discussed in Chapters 6 and 7. This includes, for example, whether the invention may have been sold or offered for sale in the United States or were used in public in the United States. Further, as discussed in detail in Chapters 6 and 7, in order to anticipate, a single prior art reference or event must disclose (explicitly or inherently) every claim limitation, and that prior art must enable every claim limitation. These factors must be considered when evaluating whether claims to a potentially new invention are patentable. Further still, if an evaluating attorney discovers evidence that appears to apply to the claims of a potentially new invention, but does not meet every requirement of Section 102 anticipation (e.g., if a single reference does not disclose every claim limitation), the attorney should consider whether the claimed subject matter might be obvious over that evidence. Obviousness under Section 103 is discussed below and in detail in Chapter 8. 1. If the Original Claims Are Likely to Be Anticipated, Review the Invention Disclosure and Consider Different Claims, Such as More Narrow Claims to Distinguish the Invention from the Prior Art If the claims originally written to cover the potentially new invention are found likely to be anticipated15 (as discussed above), it is recommended

14. For further information on a patent applicant’s duty of candor and good faith to the U.S. Patent Office, see Chapter 10. 15. As discussed in Section II above, negative statements about a company’s patent rights generally should not be produced in writing.

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that the evaluating attorney work with the inventors to review the invention disclosure and determine whether it is possible to write claims of different scope (e.g., more narrow claims that would not be anticipated). If such claims can be drafted, they should be drafted, and the anticipation analysis discussed above be performed again on the newly drafted claims. If the new claims are again found likely to be anticipated, the process is repeated. This process is repeated until either: (a) claims are drafted that are not likely to be anticipated; or (b) it is determined that it is not possible to draft meaningful claims covering any aspect of the invention due to anticipation by the prior art. If it is possible to claim the potentially new invention in a meaningful manner in which the claims are not likely anticipated, they are next evaluated for potential lack of patentability due to obviousness (as discussed below and in detail in Chapter 8). If claims are ultimately found to be patentable, those claims should then be evaluated under the company’s strategic patenting goals to determine whether patenting the invention is consistent with those goals. As discussed in detail in Chapter 18 (strategic patenting), a finding that an invention is patentable should not, of itself, necessarily mean that a company will prepare and prosecute a patent application on the patentable subject matter. As discussed below and in Chapter 18, patents should only be pursued where they are consistent with a company’s strategic patenting goals. If it is not possible to claim the potential new invention in any meaningful way that is not likely to be anticipated, this is typically the end of the patentability evaluation. However, as discussed in Section II above, even when it is determined that claims cannot be drafted that are not anticipated, one should avoid stating this in writing. For example, it is always possible that a later analysis could reveal that there was a misunderstanding of the invention disclosure and, in fact, the invention can be claimed in a manner that is not anticipated. Therefore, if the evaluation or opinion of patentability ends at this stage, if any written statement is required, it is best to provide a simple and brief statement such as: “The invention was not further evaluated at the current time.” If more detail is required, a statement could possibly read: “The invention was not further evaluated at the current time due to business considerations. The evaluation of patentability may be resumed at any time.”

C. Obviousness As discussed in detail in Chapter 8, a claim may be obvious over one or more Section 102 prior art references or events where the teaching of the combined prior art and the nature of the problem, viewed through the eyes of


an ordinary artisan, would have been obvious at the time of the invention.16 As explained by the U.S. Supreme Court: Section 103 forbids issuance of a patent when “the differences between the subject matter sought to be patented and the prior art are such that the subject matter as a whole would have been obvious at the time the invention was made to a person having ordinary skill in the art to which said subject matter pertains.”17

Most obviousness determinations are based on combinations of two or more Section 102 references, where each alone does not disclose every claim limitation (and, thus, cannot anticipate), yet the combination of references discloses every claim limitation. In these instances, it is important to consider whether one of ordinary skill in the relevant art would have found the combination of references to be obvious. For example, when a combination of prior art produces the claimed invention, and the properties of the claimed invention are what one of skill in the art would have expected to occur, obviousness may be found.18 On the other hand, when a claimed invention has properties that one of skill in the art would not have expected to result from combining prior art references (such as unexpected success), or where references themselves teach against making a combination, obviousness may not be found.19 Unlike anticipation, obviousness does not require prior art references to enable the claimed subject matter. Also unlike anticipation, a showing of obviousness may be overcome by evidence of nonobviousness, such as commercial success, long-felt and unmet need in the art, and copying by others. Therefore, if a patentability analysis determines that a potential invention may be obvious, it is important to ask the inventors if they have evidence of nonobviousness such as unexpected success. 1. If the Original Claims Are Likely to Be Obvious, Review the Invention Disclosure and Consider Whether It Is Possible to Draft Different Claims, Such as More Narrow Claims to Overcome the Potential Obviousness If the claims covering the potentially new invention are found likely to be obvious,20 as with anticipation discussed above, it is recommended that the evaluating attorney work with the inventors to review the invention

16. E.g., Voda v. Cordis Corp., 536 F.3d 1311, 1323–24 (Fed. Cir. 2008). 17. KSR Int’l Co. v. Teleflex Inc., 550 U.S. 398, 406 (2007) (quoting Graham v. John Deere Co. of Kansas City, 383 U.S. 1, 17–18 (1966)). 18. KSR, 550 U.S. at 417. 19. Id. 20. As discussed in Section II above, negative statements about a company’s patent rights should not be produced in writing.

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disclosure and determine whether it is possible to write claims of different scope (e.g., more narrow claims) that would not be obvious. If such claims can be drafted, they should be drafted, and the obviousness analysis discussed above be performed again on the newly drafted claims. If the claims are found likely to be obvious, the process is repeated. This process may be repeated until either: (a) claims are drafted that are not likely to be obvious; or (b) it is determined that it is not possible to draft meaningful claims covering any aspect of the invention due to obviousness over the prior art. If it is possible to claim the potentially new invention in a manner such that the claims are likely not obvious, they are next evaluated for potential lack of patentability due to lack of adequate support (as discussed below and in detail in Chapter 9). If claims are ultimately found to be patentable, those claims should then be evaluated under the company’s strategic patenting goals to determine whether patenting the invention is consistent with those goals. If it is not possible to claim the potential new invention in any meaningful way that is not likely to be obvious, this is typically the end of the patentability evaluation. However, as discussed in Section II above, even when it is determined that claims cannot be drafted that are not obvious, one should avoid stating this in writing. For example, it is always possible that a later analysis could reveal that there was a misunderstanding of the invention disclosure and, in fact, the invention can be claimed in a manner that is not obvious. Therefore, if the evaluation or opinion of patentability ends at this stage, if any written statement is required, it is best to provide a simple and brief statement such as: “The invention was not further evaluated at the current time.” If more detail is required, a statement could possibly read: “The invention was not further evaluated at the current time due to business considerations. The evaluation of patentability may be resumed at any time.”

D. Specification-Based Lack of Patentability and Other Forms of Unpatentability The third major form of unpatentability involves deficiencies of an invention’s description (which would become the specification in a patent) to enable or describe the claimed subject matter. The enablement and written description requirements are discussed in detail in Chapter 9. Section 112, first paragraph21 requires that a specification of a patent (or the description of an invention in a patentability determination) enable one of ordinary skill in the art at the time a patent application is filed to be able to practice the full scope of the claims without undue experimentation. Chapter 9 discusses tests promulgated by U.S. courts (including the Wands factors) for determining

21. 35 U.S.C.S. § 112, P 1 (2009).


whether the practice of claimed subject matter requires undue experimentation. Section 112, first paragraph22 also requires that an invention’s disclosure (or a patent’s specification) describe the claimed subject matter sufficiently so that one of skill in the art can determine that the inventors possessed the full scope of the claimed subject matter at the time the application for a patent was filed. A claim is unpatentable if the description of the invention does not satisfy the written description requirement. As discussed in detail in Chapter 9, the written description requirement is a separate requirement from the enablement requirement. In fact, claims may be enabled and not sufficiently described—and vice versa. Finally, Section 112, second paragraph23 requires that the claim language define the claimed invention sufficiently that the scope of the claims can be clearly determined. Claims are unpatentable under Section 112, second paragraph (indefiniteness) if the claim language is so ambiguous that one of skill in the art cannot determine its meaning. Definiteness is usually not a significant issue in patentability evaluations and opinions because the evaluator can usually work with the inventors to claim the invention with sufficient definiteness. However, it is an issue that should be considered when evaluating the patentability of a potentially new invention. As discussed below, if any claim terms are even potentially ambiguous, the analyzing attorney should work with the inventors to determine whether more definite terms can be used instead to define the invention. While it is rare, it is possible for indefiniteness issues to arise in a patentability evaluation or opinion where it appears to be impossible to describe the invention with sufficient definiteness to satisfy Section 112, second paragraph (indefiniteness). In such a case, the invention may be unpatentable under Section 112, second paragraph. 1. If the Original Claims Are Likely to Have Specification-Based Patentability Problems or Indefiniteness Problems, Review the Invention Disclosure and Consider Modifying the Invention Disclosure, Including Adding Support or Modifying the Claims (Such as Narrowing the Claims or Changing the Terms in the Claims to Overcome Potential Unpatentability Issues) Similar to the above discussions for anticipation and obviousness, if the claims covering the potentially new invention are found likely to be unpatentable due to enablement, written description, or indefiniteness issues under

22. Id. 23. 35 U.S.C.S. § 112, P 2 (2009).

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Section 112, first or second paragraphs,24 as with anticipation and obviousness as discussed above, it is recommended that the evaluating attorney work with the inventors to review the invention disclosure and determine whether it is possible to modify the invention disclosure (including adding additional enabling or descriptive subject matter), or to write claims of more narrow scope or having different wording, in order to not be invalid under Section 112, first or second paragraphs. If such claims can be drafted, they should be drafted, and the patentability analysis discussed above be performed again on the newly drafted claims. If the claims are found likely to be unpatentable, the process is repeated. This process may be repeated until either: (a) claims are drafted that are likely to be patentable under Section 112, first and second paragraphs; or (b) it is determined that it is not possible to draft meaningful claims covering any aspect of the invention due to problems meeting the patentability requirements of Section 112, first or second paragraphs. If it is possible to claim the potentially new invention in a manner such that the claims are likely to be patentable, they are next evaluated for having patent-eligible subject matter under Section 10125 (as discussed below and in detail in Chapter 9). If claims are ultimately found to be patentable, they should then be evaluated under the company’s strategic patenting goals to determine whether patenting the invention is consistent with those goals. If it is not possible to claim the potential new invention in any meaningful way that is not likely to be unpatentable under Section 112, first or second paragraphs, this is typically the end of the patentability evaluation. However, as discussed in Section II above, even when it is determined that it may not be possible to draft claims that meet the requirements of Section 112, first and second paragraphs, one should avoid stating this in writing. For example, it is always possible that a later analysis could reveal that there was a misunderstanding of the invention disclosure and, in fact, the invention can be claimed in a manner that meets the requirements of Section 112, first and second paragraphs. Therefore, if the evaluation or opinion of patentability ends at this stage, if any written statement is required, it is best to provide a simple and brief statement such as: “The invention was not further evaluated at the current time.” If more detail is required, a statement could possibly read: “The invention was not further evaluated at the current time due to business considerations. The evaluation of patentability may be resumed at any time.”

24. As discussed in Section II above, negative statements about a company’s patent rights should not be produced in writing. 25. 35 U.S.C.S. § 101 (2009).


E. Non-Statutory Subject Matter Still another example of potential unpatentability of a potentially new invention is Section 101 of the Patent Statute (35 U.S.C. § 101).26 Section 101 is discussed in detail in Chapter 9. Briefly, it provides: Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefore, subject to the conditions and requirements of this title.27

Section 101 recites four categories of patentable subject matter: processes, machines, manufactures, and compositions of matter. However, even if a claim may be deemed to fit literally within one or more of the statutory categories, it may not be patent eligible. As the Supreme Court has repeatedly cautioned: 1. Phenomena of nature, though just discovered, mental processes, and abstract intellectual concepts are not patentable, as they are the basic tools of scientific and technological work[;]28 2. [A claim is not a patent-eligible] process [if it claims] laws of nature, natural phenomena, [or] abstract ideas[;]29 3. [Such fundamental principles are] part of the storehouse of knowledge of all men . . . free to all men and reserved exclusively to none [; and]30 4. A principle, in the abstract, is a fundamental truth; an original cause; a motive; these cannot be patented, as no one can claim in either of them an exclusive right[.]31 Therefore, when deciding whether a claimed invention meets the requirements of Section 101 for patent-eligible subject matter, one must determine whether the claims are drawn to patent-eligible subject matter within any of

26. Id. 27. Id. 28. Gottschalk v. Benson, 409 U.S. 63, 67, 93 S. Ct. 253, 34 L. Ed. 2d 273 (1972); see also In re Comiskey, 499 F.3d 1365, 1378–79 (Fed. Cir. 2007) (holding that “mental processes,” “processes of human thinking,” and “systems that depend for their operation on human intelligence alone” are not patent-eligible subject matter under Benson). 29. Diamond v. Diehr, 450 U.S. 175, 185, 101 S. Ct. 1048, 67 L. Ed. 2d 155 (1981) (citing Parker v. Flook, 437 U.S. 584. 589, S. Ct. 2522, 57 L. Ed. 2d 451, and Benson, 409 U.S. at 67). 30. Funk Bros. Seed Co. v. Kalo Inoculant Co., 333 U.S. 127, 130, 68 S. Ct. 440, 92 L. Ed. 588 (1948). 31. Le Roy v. Tatham, 55 U.S. (14 How.) 156, 175, 14 L. Ed. 367 (1852).

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the four statutory categories of Section 101 and do not fall within the patentineligible subject matter discussed above. The most common Section 101 issues today relate to so-called business method patents. These are discussed in detail in Chapter 9, which should be consulted regarding potential patentability issues under Section 101. Briefly, claims to purely methods of doing business are likely not patent-eligible subject matter unless they meet the “machine-or-transformation test,” under which: A claimed process is surely patent-eligible under § 101 if: (1) it is tied to a particular machine or apparatus, or (2) it transforms a particular article into a different state or thing.32

If the claimed subject matter is likely to be unpatentable because it is patentineligible subject matter under Section 101 and related case law,33 the evaluating attorney should work with the inventors to determine whether the invention contains any subject matter that is patent-eligible under this law. If such claims can be made and are otherwise patentable under the law discussed in the sections above, they are then evaluated for compliance with the company’s strategic patenting goals. If it is not possible to claim the potential new invention in any meaningful way that is not barred by Section 101 and related case law for being patentineligible subject matter, this is typically the end of the patentability evaluation. However, as discussed in Section II above, even when it is determined that claims cannot be drafted that are patent-eligible subject matter under Section 101 and related law, one should avoid stating this in writing. It is always possible that a later analysis could reveal that there was a misunderstanding of the invention disclosure and, in fact, the invention can be claimed in a manner that is patent-eligible subject matter under Section 101 and related case law. Therefore, if the evaluation or opinion of patentability ends at this stage, if any written statement is required, it is best to provide a simple and brief statement such as: “The invention was not further evaluated at the current time.” If more detail is required, a statement could possibly read: “The invention was not further evaluated at the current time due to business considerations. The evaluation of patentability may be resumed at any time.”

32. In re Bilski, 545 F.3d 943, 954 (Fed. Cir. 2008) (en banc) (emphasis in original), cert granted, Bilski v. Doll, 129 S. Ct. 2735 (2009) (citing Benson, 409 U.S. at 70; Diamond v. Diehr, 450 U.S. 175, 192, 101 S. Ct. 1048, 67 L. Ed. 2d 155 (1981); Parker, 437 U.S. at 589 n.9; Cochrane v. Deener, 94 U.S. 780, 788, 24 L. Ed. 139, 1877 Dec. Comm’r Pat. 242 (1876)). 33. As discussed in Section II above, negative statements about a company’s patent rights should not be produced in writing.

Other Issues of Importance to New Inventions 611

VII. Determine How Invention Fits with a Company’s Strategic Patenting Goals As discussed repeatedly above and in detail in Chapter 18, a company should only file and prosecute patent applications where the subject matter: (a) covers its existing commercial technology or technology necessary to support its existing commercial technology or research and development activities; (b) covers likely future commercial technology or technology necessary to support likely future commercial technology or research and development activities; (c) provides the ability to block a competitor from pursuing its commercial or other desired technology, such that a company may use the patent rights as leverage against its competitor; or (d) constitutes a situation in which the patent rights are not relevant to the company or its competitor, but can be licensed or sold to a third party for income sufficient to justify obtaining the rights. Therefore, a necessary part of every evaluation or opinion of patentability of a company’s possible new invention is consideration as to whether the invention (as set forth in claims that have been determined to likely be patentable) fits within one of these strategic patenting categories. If not, there is usually little or no reason for a company to spend its time, money, and other resources on pursuing patent protection for the invention. An important goal of strategic patenting is to eliminate needless patenting, including patenting inventions simply because they may be patentable.

VIII. Other Issues of Importance to New Inventions In addition to determining whether a potentially new invention is patentable and whether there is a strategic reason for a company to pursue patent protection for it, other important considerations must be addressed when evaluating and opining on the patentability of a potentially new invention. These are briefly discussed below and in detail in the referenced chapters.

A. Is the Inventorship Clearly Assignable to the Company? As discussed in detail in Chapter 18, inventorship determines patent ownership. Further, if ownership of a patent is split among more than one party with no agreements among the owners, a patent is virtually commercially worthless because each co-owner can fully exploit the patent without accounting to the other co-owners.


More specifically, the inventorship of a U.S. patent determines the ownership of the patent.34 Inventors, including co-inventors, are presumed to own patents they invent unless they have assigned their ownership interest, in writing, to another party. As explained by the Federal Circuit, “initial ownership of a patent vests in the inventor by operation of law, § 261 [35 U.S.C. § 261] provides that inventors can assign all or part of their interest in a patent.”35 Further, under U.S. patent law, a co-inventor of even one claim has undivided joint ownership of the entire patent. The U.S. Patent Statute defines co-inventors as follows: When an invention is made by two or more persons jointly, they shall apply for patent jointly and each make the required oath, except as otherwise provided in this title. Inventors may apply for a patent jointly even though (1) they did not physically work together or at the same time, (2) each did not make the same type or amount of contribution, or (3) each did not make a contribution to the subject matter of every claim of the patent.36

As explained by the Federal Circuit: We have held: “All that is required of a joint inventor is that he or she (1) contribute in some significant manner to the conception or reduction to practice of the invention, (2) make a contribution to the claimed invention that is not insignificant in quality, when that contribution is measured against the dimension of the full invention, and (3) do more than merely explain to the real inventors well-known concepts and/or the current state of the art.” Pannu v. Iolab Corp., 155 F.3d 1344, 1351 (Fed. Cir. 1998) (citations omitted). This interplay between inventorship and ownership creates the anomalous situation that a co-inventor of even a single claim can then assert a right of joint ownership over an entire patent with multiple claims. See Fina Oil & Chem. Co. v. Ewen, 123 F.3d 1466, 1473 (Fed. Cir. 1997) (citations omitted) (“One need not alone conceive of the entire invention, for this would obviate the concept of joint inventorship.”); see also Ethicon, 135 F.3d at 1460 (“This rule presents the prospect that a co-inventor of only one claim might gain entitlement to ownership of a patent with dozens of claims.”).37

34. Regents of the Univ. of N.M. v. Knight, 321 F.3d 1111, 1119 (Fed. Cir. 2003); Beech Aircraft Corp. v. Edo Corp., 990 F.2d 1237, 1248 (Fed. Cir. 1993) (ownership initially vests in the named inventors of the patent); 35 U.S.C.S. § 261 (2009). 35. Knight, 321 F.3d at 1119 (citation omitted). 36. 35 U.S.C.S. § 262, P 1 (2009). 37. Israel Bio-Engineering Project v. Amgen Inc., 475 F.3d 1256, 1263–1264 (Fed. Cir. 2007).

Other Issues of Importance to New Inventions 613

Further, Section 262 of the Patent Statute provides: In the absence of any agreement to the contrary, each of the joint owners of a patent may make, use, offer to sell, or sell the patented invention within the United States, or import the patented invention into the United States, without the consent of and without accounting to the other owners.38

The Federal Circuit has explained the implications of Section 262 to a patent having split ownership as follows: [The] freedom [under Section 262] to exploit the patent without a duty to account to other co-owners also allows co-owners to freely license others to exploit the patent without the consent of other co-owners. Schering, 104 F.3d at 344 (“Each co-owner’s ownership rights carry with them the right to license others, a right that also does not require the consent of any other co-owner.”). Thus, the congressional policy expressed by section 262 is that patent co-owners are “at the mercy of each other.” Willingham v. Lawton, 555 F.2d 1340, 1344, 194 U.S.P.Q. (BNA) 249, 252 (6th Cir. 1977).39

The practical implications of Section 262 to a patent having unrestricted split co-ownership is that the patent is virtually worthless commercially because no party has exclusivity, or the right to grant it, and exclusivity is the essence of patent rights. For example, where a patent has even one co-inventor or co-owner who is not obligated to assign his or her rights to a party that otherwise owns all rights in a patent, the party owning all other rights cannot enforce, license, or assign exclusivity under the patent because the nonassigning co-owner could assign the patent to any third party, including a competitor of the other co-owner or a potential licensee or assignee of the co-owner. An independent co-inventor or co-owner could even dedicate the patent to the public to practice free of charge. Therefore, inventorship should always be investigated and determined when evaluating or opining on patentability of a potentially new invention. Generally, employees who make an invention within the course and scope of their employment are obligated to assign their patent rights to their employer under state law. However, this should be investigated. Further, if a decision is made to prepare and file a patent application, the inventors should execute a written assignment of their patent rights to the company, and this assignment should be recorded with the U.S. Patent Office when the patent application is filed. Because of the serious issues associated with unrestricted split ownership of patent rights, the possibility of co-inventors who are not under an obligation

38. 35 U.S.C.S. § 262 (2009). 39. Ethicon, Inc. v. U.S. Surgical Corp., 135 F.3d 1456, 1468 (Fed. Cir. 1998) (emphasis added).


to assign their rights to the company or who may even be under an obligation to do so to another entity should be thoroughly and carefully investigated as part of an evaluation or opinion of patentability of a potentially new invention. This includes asking the inventors who they worked with (in any way, and to any extent) in making the invention, including even those with whom they discussed their ideas regarding the invention. Red flags for potential split inventorship include research collaborations, shared or borrowed materials (e.g., biological materials obtained from unrelated parties and used in the invention), presence of any non-company employees in company laboratories (e.g., visiting professors and the like), and employees having associations with other institutions (such as inventors who are company employees and also university faculty members). Should any potential split ownership issues be detected, they should be resolved as soon as possible. Resolution of any potential co-inventorship or co-ownership issues should, if possible, occur prior to preparing, filing, and prosecuting a patent application. For example, the company could purchase any actual or potential ownership rights from actual or potential co-inventors or co-owners. Alternatively, a company could try to sell its actual or potential co-ownership in the patent rights to another entity also having actual or potential co-ownership rights in the invention. It is generally not advisable for a company to prepare and prosecute a patent application where there is actual or likely split co-inventorship or co-ownership that cannot be resolved, despite a company’s best efforts to resolve the issue.

B. Investigate Potential Nonstatutory Obviousness-Type Double-Patenting Issues Another issue that should be investigated when evaluating or opining on the patentability of a potentially new invention is the relationship of claimed subject matter of the potentially new invention to subject matter of other U.S. patents or patent applications that are commonly owned by the company. Specifically, the issue of nonstatutory obviousness-type double patenting (“ODP”) should be investigated if the potentially patentable subject matter of a potentially new invention is similar to that claimed in any pending U.S. patent application or issued U.S. patent owned by the same company. If this is the case, there is a potential for an ODP rejection in the prosecution of a U.S. patent application claiming the new invention. Because of this possibility, the priority dates of any pending company-owned U.S. patent applications (or the terms of any company-owned issued U.S. patents) claiming similar subject matter should be determined. Resolution of ODP rejections typically requires the filing of a terminal disclaimer in the rejected application that disclaims the term of any patent issuing from the rejected application extending beyond the expiration of the commonly owned U.S. patent or patent application on which the ODP rejection is based. Thus, one should always

Practice Points

investigate the potential loss of term that might result if a new patent application may be subject to an ODP rejection based on anther company-owned application or patent. In circumstances where: (a) there is a high likelihood of a new application being rejected under OPD based on a commonly owned U.S. patent or application; (b) it appears that it will be difficult to overcome the rejection other than by filing a terminal disclaimer based on the patent or patent application; and (c) the term of the patent (or the term of any patent issuing from a patent application) that forms the basis of an ODP rejection will expire such that the term of any patent issuing off the new application with an OPD rejection and a terminal disclaimer will be substantially shortened, this should be considered when determining whether to prepare and file a patent application on the new invention. It is possible under these circumstances that any patent issuing off a new invention application having an ODP rejection and requiring the filing of a terminal disclaimer to remove the rejection may have such a substantially shortened term that it may not be worth preparing, filing, and prosecuting a patent application on the invention.

IX. Practice Points A. Avoid Expressing Doubts about Patentability in Writing As a general rule, one should avoid expressing doubts in writing about the patentability of a potentially new invention. For example, as discussed throughout this chapter, in determining what subject matter to claim in a patent application on a new invention, there may be several iterations of claims that may be changed for various reasons, including to overcome potential issues with patentability. There is nothing improper about this process, provided that claims that are filed with the Patent Office are believed to be patentable when they are filed. Written evaluations or opinions expressing doubts about patentability of inventions should be avoided. For example, it is possible to determine patentable subject matter in a different way after reviewing different aspects of an invention disclosure and claims having differing scope. In such a case, a patent may issue having claims that were never questioned as to their patentability. However, if the resulting patent is enforced against an infringer, and a written opinion expressing initial doubts about the patentability of the invention is discovered by the defendant, it could cause problems in enforcing the patent. This may be the case even if the written statement was based on differently claimed subject matter or an incorrect understanding of the invention. Thus, as a general rule, one should refrain from expressing negative opinions about a company’s patent rights in any situation, including in evaluating and opining on patentability of potentially new inventions.

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B. Prior to Beginning Any Evaluation or Opinion of Patentability of a Potentially New Invention, It is Essential for the Reviewing Attorney to Obtain a Thorough Understanding of the Invention As a necessary first step in any evaluation or opinion of patentability of a potentially new invention, the reviewing attorney should obtain a thorough and complete understanding of the invention. Ideally this is done by working with the inventors. Frequently, invention disclosures do not disclose the full extent of an invention. For example, they may exclude embodiments of the invention or critical data, and even mischaracterize the essence of the invention. Therefore, it is important that a reviewing attorney obtain as complete an understanding as possible of a potentially new invention from the invention disclosure and, if possible, by discussing the invention with the inventors.

C. It Is Best if the Evaluating Attorney Can Work Closely with the Inventors Throughout the Evaluation Process It can be very helpful for the attorney who is performing the evaluation or opinion of patentability to be able to work closely with the inventors throughout the process. For example, the inventors can help the attorney obtain a complete and accurate understanding of the invention at the beginning of the project. Further, the inventors can work with the attorney to be certain that the claims drafted properly cover the invention. Further, during the evaluation process, the evaluating attorney may be able to guide the inventors in expanding and more fully supporting and describing their invention. Still further, it can be helpful for the evaluating attorney to consult with the inventors during possible reiterative review stages of the evaluation (i.e., where claims covering the invention, or the invention disclosure, may need to be altered as a result of initial evaluations of prior art or of the sufficiency of the description of the invention).

D. A Patent Attorney May Guide the Inventors to Disclose Additional Aspects or Embodiments of Their Invention, but Must Not Become a Co-Inventor It is common for a patent attorney evaluating the patentability of a potentially new invention to work with the inventors to expand their disclosure of the invention. For example, as prior art becomes known that better informs the inventors of the basis of their invention and its patentability over the art,

Practice Points

inventors typically expand or contract their description of their invention. Further, a patent attorney may explain the need for the description of the invention to better enable and describe the inventive subject matter. This may cause the inventors to disclose their invention in greater detail (e.g., by including multiple embodiments). This is a typical process in which an invention disclosure is reviewed for patentable subject matter or a patent application is prepared on a new invention. However, patent attorneys must be careful not to engage with the inventors to the extent the attorney could potentially be considered a co-inventor. The attorney may guide the inventors into more fully expressing their invention, but should avoid making inventive suggestions.

E. Prior to Analyzing the Invention for Patentability, the Invention Must Be Claimed and the Claims Must Be Construed Evaluations and opinions of patentability must be based on claims drawn from the description of a potentially new invention. An evaluation of patentability is like an evaluation of validity of an issued patent that must be based on the construed claims of the patent. Similarly, evaluations of patentability must be based on construed claims of a potentially new invention. Claims should be prepared as they would be to cover a new invention when drafting a patent application. The law of claiming and claim construction as discussed in Chapter 2 should be considered when drafting claims. For example, the evaluating attorney should expressly define claim terms that have an intended meaning in the claim that is (or may be) different from the meaning of that term to one of ordinary skill in the relevant art, or in which a claim term has multiple definitions to such a person.

F. A Proper Patentability Evaluation or Opinion Ensures That the Invention Description Is Sufficient to Enable, Describe, and Define the Claimed Subject Matter It is important for a patentability evaluation or opinion to take into consideration patentability issues beyond the prior art. In preparing evaluations or opinions of patentability of a potentially new invention, one may sometimes consider addressing only whether the invention is patentable over the prior art. Instead, in addition to addressing the prior art, one should also evaluate whether the description of the invention is sufficient to meet the enablement, written description, and best mode requirements of 35 U.S.C. § 112, first paragraph, and the definiteness requirement of 35 U.S.C. § 112, second paragraph. Doing so will help to ensure that any patent application on the

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invention will meet these requirements. It is important that this be done before a patent application is filed because once an application is filed, one cannot add new matter to the specification.

G. Ask the Inventors about Best Mode and Assure That the Description of the Invention Enables the Best Mode Yet another advantage of working with the inventors during a patentability evaluation or opinion is the opportunity to explain to the inventors the best mode requirement of 35 U.S.C. § 112, first paragraph, and ask them if they have contemplated a best mode for carrying out the claimed invention. If so, it is important to be certain that the specification enables the practice of the best mode in order for any patent application filed on the invention to comply with the best mode requirement of Section 112, first paragraph.

H. Apply the Proper Law and Analysis Be certain to apply the proper law and analysis when evaluating and opining on patentability. This includes (but is not limited to) issues related to anticipation such as the requirement that a single prior art reference disclose (explicitly or inherently) every limitation of a claim; that obviousness determinations need to evaluate evidence of nonobviousness; that the enablement requirement of Section 112, first paragraph, requires that the invention disclosure enable one of ordinary skill in the art to practice the full scope of the claimed invention without undue experimentation; that to meet the written description requirement, an invention’s disclosure must describe the invention such that one of skill in the art can understand that the inventor possessed the claimed invention when an application is filed; and that in order to satisfy the definiteness requirement of Section 112, second paragraph, the claims must clearly and definitely define the scope of the claimed invention.

I. Even if an Invention Is Patentable, There May Not Be a Reason to Obtain a Patent; Strategic Patenting Requires That a Patent Application Lead to a Useful Patent Once subject matter of a new invention has been determined to likely be patentable, the potentially patentable subject matter must be reviewed in light of a company’s strategic patenting goals. A patent application should be pursued only if the potentially patentable subject matter falls within the company’s

Practice Points

strategic patenting goals. It is important to guard against patenting an invention merely because it is patentable. More specifically (and as discussed in Chapter 18), generally, a company should only file and prosecute patent applications where the subject matter: (a) covers its existing commercial technology or technology necessary to support its existing commercial technology or research and development activities; (b) covers likely future commercial technology or technology necessary to support likely future commercial technology or research and development activities; (c) provides the ability to block a competitor from pursuing its commercial or other desired technology, such that a company may use the patent rights as leverage against its competitor; or (d) constitutes a situation in which the patent rights are not relevant to the company or its competitors, but can be licensed or sold to a third party for income sufficient to justify the costs of obtaining the rights.

J. Consider Other Issues Such as Inventorship/Ownership and Potential Nonstatutory Obviousness-Type Double Patenting Once an invention has been found to likely be patentable, an evaluation must be made to determine at least: (a) the potential for any problems with coownership; and (b) the potential for any significant shortening of the term of a patent issuing from an application likely to have a nonstatutory obviousness-type double patenting rejection requiring the filing of a terminal disclaimer. As explained in detail above, it is very important that the ownership rights in a patent be controlled by a single entity. Unrestricted co-ownership, even by one other party, can virtually eliminate the commercial value of a patent because it destroys exclusivity, the hallmark of patent rights. Thus, one must carefully evaluate the inventorship of a new invention to determine whether any co-inventors may have no obligation to assign their rights in the invention to the company (as discussed above, inventorship determines the initial ownership of U.S. patent rights). Also, if an application is filed on a new invention, it is important to have all inventors assign their interests in writing to the company and to record the assignments with the U.S. Patent Office. Further, if a company has one or more issued U.S. patents or pending applications that claim subject matter that is similar to that of a new invention, the potential for a patent application on the new invention being rejected for nonstatutory obviousness-type double patenting should be carefully evaluated. The terms of any commonly owned U.S. patents or patent applications that may form the basis for a nonstatutory obviousness-type double patenting rejection of the new application should also be determined. If there is a

619


substantial likelihood that an application on the new invention may have to disclaim term to overcome a nonstatutory obviousness-type double patenting rejection based on a commonly owned patent or patent application with a short remaining or potential term, this issue should be seriously considered prior to preparing and filing a patent application on the new invention. It may be that the possibility of a patent application on the new invention having to disclaim its term significantly due to nonstatutory obviousness-type double patenting may outweigh the potential benefit and costs of seeking a patent on it.

CHAP T ER

18 Evaluating and Opining on One’s Own Patents Strategic Patenting, Including Patent Landscapes, Evaluations and Opinions of Claim Scope/Infringement, Validity, Enforceability, and Ownership

I. Strategic Patenting and Patent Landscapes A. Patent Landscapes

624 624

1. Issued and Enforceable U.S. Patents

625

2. Prior Art and Other Non-Patentable Subject Matter

627

3. Potentially Patentable Subject Matter

628

4. The Company’s Technology

629

5. Reporting Patent Landscapes

630

B. Strategic Patenting

635

1. Always Focus Patenting Efforts and Strategy on the Company’s Commercially Important Subject Matter

635

2. Strategic Patenting Should Involve Outside Patent Counsel

636

3. Strategic Use of Patent Landscapes

637

a) One’s Own Patents

637

b) Third Party Patents

639

c) Subject Matter Potentially Free from Patent Coverage

641

d) Potentially Patentable Subject Matter

642

e) Identification of Significant Patent Holders in a Technology and Strategic Use of This Knowledge

642

II. Claim Construction Is Required for Evaluations and Opinions of Patent Claim Scope/Infringement, Validity, Enforceability, and Ownership A. Claim Construction Is Essential to Virtually All Patent Evaluations and Opinions, Including Claim Scope/Infringement, Validity, Enforceability, and Ownership

621

643

644

622

Chapter 18 Evaluating and Opining on One’s Own Patents B. Claim Construction Must Be Based on a Patent’s Intrinsic Evidence: The Claims, the Specification, and Its Prosecution History in the U.S. Patent Office, Including All Cited Prior Art III. Claim Scope/Infringement Evaluations and Opinions

644 645

A. For Infringement Determinations, Clearly Define the Potentially Infringing Subject Matter

646

B. Claim Construction Is Always Required

646

C. Infringement Evaluations and Opinions Should Consider Both Literal Infringement and Infringement Under the Doctrine of Equivalents

647

D. Consider Possible Indirect Infringement

647

E. Reporting Considerations

648

IV. Validity Evaluations and Opinions

648


649

B. Consider All Possible Means of Validity, Including All Types of Anticipation, Enablement, Written Description, Best Mode, and Other Issues

649

C. Every Claim Must Be Addressed in Validity Evaluations and Opinions

650

D. Prior Art Searching

650

E. Limiting Search-Related Liability

651

G. Reporting Considerations

652

V. Enforceability Evaluations and Opinions

652


653

B. Not Every Claim May Need to Be Addressed in Evaluations and Opinions of Enforceability of Patents

654

C. Potential Enforceability Issues

654

D. Reporting Considerations

655

VI. Evaluations and Opinions Regarding Patent Ownership

655

A. Ownership of a U.S. Patent Is Based on Inventorship

656

B. A Co-Inventor to Even One Claim (or His Assignee) Has Joint Ownership of the Entire Patent

656

C. A Co-Owner Has the Right to Fully Exploit the Patent Without Requiring Permission From (or Accounting to) the Other Co-Owners

657

D. Claim Construction Is Always Required

658

E. Every Claim Must Be Addressed in Evaluations and Opinions of Ownership of Patents

658

Evaluating and Opining on One’s Own Patents F. Potential Ownership Issues

659

G. Correcting Split Ownership of U.S. Patents

660

H. Correction of Inventorship Errors

660


661

A. Patent Landscapes Are Flexible

661

B. As a General Rule, Never Produce a Document That Indicates (Either Expressly or by Implication) That a Company Believes, Has Reason to Believe, or Should Believe, That Its Technology Infringes a Claim of a Valid and Enforceable Third Party Patent

661

C. Strategic Patenting Coordinates a Company’s Actual, Commercial, Technology with Its Patenting Strategy

662

D. In Strategic Patenting, Patenting Issues Can Direct Commercial Development

662

E. When Outside Patent Counsel Is Used, Outside Counsel Should Be Informed of a Company’s Commercial Development, Both Current and Future, So That Its Patenting May Best Match the Company’s Commercial Technology

663

F. Companies and Patent Counsel Should Avoid Blindly Patenting Anything Patentable

663

G. Be Aware of Patent Applications and Patents Covering Early Stages of a Company’s Technology

664

H. A Company’s Patent Portfolio Should Be Evaluated for Scope, Validity, Enforceability, and Ownership, and Errors Corrected Where Possible

664

623

624

Chapter 18 Evaluating and Opining on One’s Own Patents

Usage Note: Other chapters of this treatise that relate to this chapter include Chapter 2 (claim construction), Chapters 3–5 (infringement), Chapters 6–9 (validity), Chapter 10 (enforceability), Chapter 11 (patent due diligence for third party patents), Chapter 12 (clearance ( freedom to operate), noninfringement, and invalidity evaluations and opinions of third party patents), Chapter 17 (patentability determinations), Chapter 19 (defensive due diligence), and Chapter 21 (post-grant corrections of patents). Therefore, the reader of this chapter is referred to these chapters for further information on these specific issues.

I. Strategic Patenting and Patent Landscapes Strategic patenting is the use of patent rights to maximize a company’s value and competitive position. It is accomplished by informed, focused, forwardlooking, and efficient patenting tactics. These tactics allow a company to obtain a patent position that outmaneuvers the competition, ensuring a competitive advantage to the company in practicing subject matter that is commercially important to it. A critical and necessary component of strategic patenting is defining the “patent landscape” in which a company’s technology is located. As explained in detail below, a patent landscape portrays for a given technology the scope of patent coverage, including that of a company and its competitors, areas of the technology that are likely open to patenting, and areas of the technology that are likely free from and closed to patenting. Companies use this information in developing strategies to obtain and use patent rights to ensure a company’s long-term dominance in its commercially important current and future subject matter.

A. Patent Landscapes A patent landscape is a detailed analysis of the patent rights in a specific technology, including those of a company and its competitors. U.S.1 patent landscapes are generally divided into different types of technology such as: (a) technology covered by issued and enforceable U.S. patents, including the company’s own patents and those of third parties; (b) technology that is likely unpatentable (e.g., because it is described in prior art); and (c) technology that is

1. In keeping with the scope of this treatise, the focus of this chapter is on U.S. patent rights. Therefore, U.S. patent landscapes are discussed. Nevertheless, the teaching of this chapter may easily be adapted to international patent landscapes simply by expanding the concepts to include both U.S. and non-U.S. patent rights.

Strategic Patenting and Patent Landscapes

potentially patentable. The technology may also be divided, for example, to show the company’s current and proposed technology. 1. Issued and Enforceable U.S. Patents Issued and enforceable U.S. patent rights (and the technology they cover) comprise subject matter that may be portrayed in a patent landscape. The scope of issued and enforceable U.S. patent rights is the scope of the claims of the patents.2 Patent rights are generally considered “enforceable” for purposes of patent landscapes when: (a) a patent has issued; (b) the patent has not expired; and (c) the patent has not been found by a U.S. court of law or the U.S. Patent Office to be invalid or unenforceable. The scope of technology covered by a company’s issued and enforceable U.S. patent rights in a patent landscape is determined by performing evaluations and opinions of claim scope/infringement of the company’s issued patents. (This is discussed in detail in Section III below.) The identification of issued and enforceable third party patent rights within a patent landscape, the determination of the scope of technology they cover, and their potential strength is accomplished by conducting clearance (freedom to operate), infringement, noninfringement, invalidity, and unenforceability evaluations and opinions. Careful and thorough analysis of third party patents is a critical and necessary requirement for creating patent landscapes and must not be avoided or undervalued. While third party patent evaluations and opinions can be expensive and time-consuming, they are necessary to identify third party patents and their scope of coverage and strength within patent landscape. Chapter 12 covers evaluations and opinions of third party patents for clearance (freedom to operate), infringement, noninfringement, invalidity, and unenforceability, and should be consulted regarding these issues when preparing patent landscapes. Typically, third party patents that are issued and enforceable, but for which a company has determined in a clearance (freedom to operate) evaluation or opinion are not infringed, are invalid, or are unenforceable, are portrayed in a patent landscape but may be distinguished from third party patents for which no such determination has been made. This allows a company to view the landscape of third party issued and enforceable patents knowing which third party patents have been determined to have potential issues of noninfringement, invalidity, or unenforceability.

2. As discussed below (and in detail in Chapter 2), a U.S. patent’s claims define the subject matter of the patent grant, which is the technology for which the patent owner has the right to exclude others from practicing without permission.

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Importantly, however, care must be taken regarding how third party patents for which a company does not have evaluations or opinions of noninfringement, invalidity, or unenforceability are portrayed and described in a patent landscape. This is significant because (as discussed below) a patent landscape shows the relationship of a company’s technology to third party patent rights. Thus, a patent landscape may show that certain third party patents rights might cover (i.e., might be infringed by) certain aspects of a company’s technology. When this occurs, care must be taken in describing third party patent rights that potentially cover the company’s technology, for patents for which the company does not have evaluations or opinions of noninfringement, invalidity, or unenforceability. As a rule, when one prepares evaluations and opinions on the relationship of a company’s technology to third party patent rights in any context, documents (including patent landscapes) should never conclude or imply that a company believes that any aspect of its technology may be infringed by valid and enforceable third party patent rights. Thus, care must be taken when portraying third party patents in a patent landscape that may cover portions of a company’s technology and for which a company does not have an evaluation or opinion that the patents are not infringed, or are invalid or unenforceable. One way to address this issue is to make it clear in a patent landscape that noninfringement, invalidity, and unenforceability evaluations and opinions for these patents are in the process of being conducted. Further, it should state that as the analyses are ongoing, the actual scope of the claims (i.e., the patent rights) of these patents is not yet known. Therefore, the scope of these patent rights shown in the patent landscape is only approximated, solely for purposes of illustration. Accordingly, it should be clearly stated that any indication in the landscape that these patents may cover any aspect of a company’s technology is not based on an analysis of the actual scope of the patents’ claims. Therefore, the patents may in fact not cover any aspect of the company’s technology (and/or may be invalid or unenforceable). The practical effect of this should be that a company identifies third party patent rights that require further investigation, but avoids creating a document that shows or implies that the company believes that any valid and enforceable third party patent rights might or would be infringed by its technology. Of course—and most importantly, if there is any concern that a document (including a patent landscape) could be construed as showing that a company believes, has reason to believe, or should believe that any aspect of its technology infringes any valid and enforceable third party patent rights, the document should not be prepared or distributed, even confidentially. In addition, consideration should be given to not removing from the patent landscape third party patents that have been determined in evaluations and opinions to be noninfringed, invalid, or unenforceable. U.S. patents are presumed valid, and invalidity and unenforceability must be proven in a court of law. Therefore, it is important that companies be reminded of these patents,


perhaps in patent landscapes, even though the companies may believe that they do not pose significant blocking (infringement) risks to the practice of the companies’ technology. Again, however, the controlling rule is that no documents (including patent landscapes) should conclude or imply that a company believes that any aspect of its technology may be infringed by valid and enforceable third party patent rights. Thus, if a document may communicate such information, the document should not be prepared or distributed, even confidentially. 2. Prior Art and Other Non-Patentable Subject Matter Prior art and other non-patentable subject matter typically comprises one of the classes of technology portrayed in a patent landscape.3 This category shows the aspects of the technology of the patent landscape that are not covered by issued and enforceable U.S. patents, and in which no party is believed capable of obtaining valid patent rights.4 Typically, this includes subject matter that is within the prior art such that it is not patentable under U.S. law. As discussed in detail in Chapters 6 and 7, generally one may not obtain a U.S. patent having claims covering subject matter that has been previously invented or disclosed (or that is obvious over such subject matter), which subject matter is typically referred to as prior art. Printed publications are probably the most common evidence of prior invention and disclosure. Generally, subject matter described in a printed publication cannot be patented more than one year from its publication date.5 Thus, subject matter described in (or obvious from that described in) printed publications that are more than one year old is generally not patentable. Scientific and technical articles, descriptions of commercial technology such as in sales and marketing materials, issued patents, and published patent applications are common examples of printed publication prior art. Patents and published patent applications are considered printed prior art publications for all subject matter that they describe, regardless of what subject matter is claimed in the patent or application.6 Further, patents and published patent applications are prior art as printed publications regardless of any legal rights that may be related to them. Thus, they are prior art regardless of whether a patent is valid and enforceable, has expired, or is invalid or unenforceable.

3. Importantly, this is to be distinguished from patentable improvements in this subject matter, which should be listed in the patent landscape as potentially patentable subject matter. 4. Id. 5. As discussed in detail in Chapter 6, under U.S. patent law, there is a one-year “grace period” for printed publications, such that printed publications are not evidence of prior invention or disclosure to a U.S. patent application if the application is filed within one year of the publication date of the printed publication. 35 U.S.C.S. § 102(b) (2009). 6. See Chapter 6 for further information.

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Thus, patents that are issued and enforceable and have been issued more than one year will typically be listed in a patent landscape as both prior art and as issued and enforceable patents as discussed above. When the patent expires, or otherwise becomes invalid or unenforceable, it is removed from the issued and enforceable patents category, but remains as prior art. Similarly, patent applications that have been published for more than one year and have claims covering potentially patentable subject matter will typically be listed in a patent landscape as both prior art and as potentially patentable subject matter (discussed below). Should the application issue as a U.S. patent, it will be moved from the category of potentially patentable subject matter to issued and enforceable patents. However, the application will remain listed as prior art. Further, should the application become abandoned with no pending related applications, it may be removed from the category of potentially patentable subject matter, but will remain listed as prior art. In addition to printed publications, other prior art that precludes patenting includes (but is not limited to) subject matter that has been in public use or on sale in the United States for more than one year.7 Further still (as discussed in detail in Chapters 8–10), there are several other types of subject matter that are not be patentable under U.S. patent law. This includes, for example, natural phenomena in their natural state—that is, natural phenomena that have not been modified or applied in an inventive manner.8 Prior art and other invalidating information is typically generated while one conducts the evaluations and opinions necessary to determine the content of other aspects of the patent landscape (such as issued and enforceable U.S. patents and potentially patentable subject matter). For example, evaluating and opining on the validity of third party patents typically includes searching for invalidating prior art, including printed publications in the form of scientific articles, patents, and published patent applications. These prior art searches usually yield prior art within the technology of the patent landscape. Thus, they necessarily populate the category of prior art in the patent landscape. Generally, it is not necessary to do separate prior art searching to populate this section of the landscape. In the event that technologies of the patent landscape are not searched for invalidating prior art, prior art searches should be performed to fully populate this category of the patent landscape. 3. Potentially Patentable Subject Matter Another category in a patent landscape is potentially patentable technology. Generally, this is subject matter that is not covered by one or more issued and enforceable patents and that does not appear to have patentability issues

7. See Chapter 7 for further information. 8. See Chapter 9 for further information; 35 U.S.C.S. § 101 (2009).


(e.g., because of prior art). This subject matter includes the claims in pending patent applications and the subject matter of invention disclosures of the company preparing the landscape. This especially includes technology for which the company has performed patentability evaluations and opinions (as discussed in detail in Chapter 17). This category also includes the subject matter of the claims of pending patent applications of third parties, unless this subject matter is clearly not patentable (e.g., because it clearly falls within the category of prior art and other non-patentable subject matter). The technology in this category of a patent landscape may be of particular importance in strategic planning, as it is technology in which the company—and third parties— may likely obtain patents. As explained below, this category of patent landscapes is of particular importance for long-term strategic planning, including coordinating patenting decisions with a company’s strategic planning for its research and development and future commercial technologies. 4. The Company’s Technology Patent landscapes may also include the technology of the company preparing the landscape. This includes subject matter that is currently being used, made, or sold by the company, as well as technology that the company plans on (or is considering) making, using, or selling. This technology is evaluated in the landscape in relation to the technology as a whole, as well as the specific categories of subject matter discussed above. For example, patent landscapes show and map the relationship of the company’s patents to its technology, as well as the relationship of third party patents to its technology.9 Still further, patent landscapes show and map the relationship of a company’s technology to prior art and other non-patentable subject matter (as well as to potentially patentable subject matter). Still further, additional categories of information can be added to patent landscapes to address additional issues. For example, competitors’ technology can be added to patent landscapes. Competitors’ technologies can be mapped on patent landscapes in much the same way that a company’s technology is mapped. For example, a patent landscape can show the relationship of competitors’ technology to issued and enforceable patent rights of the company and of third parties (potentially including the competitors) and in relationship to potentially patentable and non-patentable subject matter. This and other data obtained from patent landscapes provides a wealth of information for use in strategic patenting, as discussed below.

9. Importantly, showing or describing the relationship of a company’s technology to third party patent rights must be subject to the limitations on this issue discussed in Section I[A][1] above. These limitations must be considered prior to preparing any documents representing the relationship of a company’s technology to third party patent rights.

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5. Reporting Patent Landscapes Patent landscapes can be reported in various ways, and ideally should be reported in at least two different fashions. Generally, people best perceive nonverbal information when it is delivered to them in one of two ways: (a) in writing; or (b) graphically. Therefore, patent landscapes are best reported both in writing and graphically. Written reporting of patent landscapes can be challenging because the subject matter typically better lends itself to graphic presentation. Nonetheless, patent landscapes can be reported in written form by carefully describing and explaining the patent landscape, including the different categories and types of subject matter, their scope, and their relationship to one another. This may be best achieved by reporting the subject matter using an outline that divides the subject matter by various parameters (as discussed above). It is also useful to describe the subject matter of the landscape in descending order of complexity; first broadly explaining the overall landscape, then more narrowly explaining the subject matter and how they each interact and relate to one another. Additionally, tables are helpful in written presentations of patent landscapes. Graphic presentation of patent landscapes can range from simple pie charts to complex three-dimensional representations. Graphic presentations of patent landscapes tend to work well because they allow displays of the relationships of various subject matter groupings to each other. For example, as shown in Figures 18-1 through 18-3, one may create a three-dimensional patent landscape display by dividing a two-dimensional plane into different classes of subject matter (such as technology covered by issued and enforceable U.S. patents, prior art and other non-patentable technology, and potentially patentable technology). The relative weight, importance, scope, etc. of each class can be shown graphically by the proportion of the plane that each subject matter occupies. One can then add three-dimensional bars rising from the two-dimensional plane representing subject matter such as third parties patents, company-owned patents, etc. The relationship of this subject matter to that of the plane is shown by the bars within sections of the plane to which they relate. The relative weight, importance, scope, etc. of the subject matter of the bars is shown graphically by the height of the bars. Labeling and other means of distinguishing visually between the bars, such as colors, crosshatching, or shading, allow for further divisions of subject matter in a patent landscape. For example, labeling, colors, cross-hatching, or shading can be used to identify different bars, and thus to identify and visually distinguish among, for example, a company’s own patents and third party patents owned by different companies. The final product is a three-dimensional graphic showing a complete patent landscape for a given technology. Further, these graphic means are easily modified to show any patent landscape issues at any level of detail desired.


II

IV

III

V

III I

I

II

A (50%) B (25%) C (25%)

FIGURE 18.1

For example, Figure 18-1 shows a graphic representation of the patent landscape for a given technology. The two-dimensional plane is subdivided into the three basic classifications of subject matter by patent rights: patented technology (area A), prior art and other non-patentable subject matter (area B), and potentially patentable subject matter (area C). The relationship of each of areas A, B, and C to each other and to the technology as a whole represents the proportion of the entire technology that is made up of each of these areas. In particular, Figure 18-1 shows that 50 percent of the overall subject matter of the technology is patented technology (area A), twenty-five percent is prior art and other non-patentable subject matter (area B), and twenty-five percent is potentially patentable subject matter (area C). Figure, 18-1 shows that, despite the fact that 75 percent of the technology is already patented or is not patentable, there is still strong interest and competition in seeking to obtain new patent rights in the technology, as shown by the number of companies and their relative levels of activities in area C. The division of overall subject matter for the technology shown in Figure 18-1 is typical for a technology in which patent rights are rather well developed, yet also where there is significant activity in obtaining new patent rights.

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The maturity of this technology is reflected by the relative dominance of area A, patented subject matter, making up half of the overall subject matter, and by prior art and other non-patentable subject matter (which includes expired patents) comprising another twenty-five percent of the overall subject matter of the technology. Thus, three quarters of the subject matter of the technology is patented or has been patented or previously described. As technologies mature, the proportion of patented technology (area A) and prior art and other non-patentable subject matter, including expired patents, (area B) increase relative to potentially patentable subject matter (area C). Further, the proportion of patented technology (area A) to prior art and other nonpatentable technology (area B) decreases as patents in area A expire, and their coverage becomes reflected in area B. Conversely, in nascent technologies, the relative proportion of potentially patentable technology (area C) to the overall technology tends to be large, while the scope of patented technology (area A), and especially of prior art and other non-patentable technology (area B), is smaller compared with the technology as a whole. More specifically regarding Figure 18-1, the verticals bars within areas A and C represent the patent rights (for area A) or potential patent rights, such as pending patent applications, (for area C), subdivided by the companies that own these rights. Figure 18-1 shows that within the specific technology of the figure, company II significantly dominates the existing patent rights, and companies I and III each own approximately the same proportion of patent rights. The figure further shows that within the scope of potentially patentable subject matter (area C), the relative dominance between companies I, II, and III differs considerably from that of the issued patent rights. Of particular note is that company II lacks the relative dominance in potentially patentable technology that it enjoys in issued patent rights in this technology. Further, company III dominates the potentially patentable technology. Further still, the graph shows that additional companies are seeking to obtain new patent rights in this technology (companies IV and V). Other information that can be obtained from Figure 18-1 includes, for example, an indication that Company II may be in danger of losing its dominance in the issued patent rights in the technology. This could happen if, over time, the companies currently shown in the potentially patentable subject matter (area C) obtain issued patents in proportion to their relative presence in area C. Thus, as patents issue to these companies, they move to the patented technology (area A), and, thus, the relative dominance of company II in area A will likely diminish over time. This may be further exasperated by the fact that company II has a much smaller presence in area C (potentially patentable subject matter) relative to its competitors. Thus, a patent landscape graphic such as Figure 18-1 can provide a wealth of information that can be used for a host of different purposes. For example, a company considering licensing or purchasing patent rights in the technology of Figure 18-1 would be cautioned that although company II holds the


I

I II III II A (60%)

B (40%)

FIGURE 18.2

dominant position in issued patent rights at the time of the graphic, this might not remain the case as the potential patent rights issue into patent rights. Figure 18-1 could indicate, for example, that company II may be having difficulty in its patent program, and thus that any company interested in company II’s patent rights in the technology shown should carefully investigate this issue. Of course, an overall patent landscape such as that of Figure 18-1 is necessarily limited in specific details. Additional graphics may be prepared to show information that is more detailed within a given area of a technology. One can prepare patent landscape graphics to virtually any level of detail. For example, Figure 18-2 shows a more detailed analysis of a smaller range of technology, such as a subsection of the overall technology shown in Figure 18-1. Specifically, Figure 18-2 shows the relationship of issued product patents (area A) to process patents (area B) within in a specific, broader technology. As can be seen from the figure, 60 percent of the issued patents in this technology are product patents (area A) and 40 percent are process patents (area B). Figure 18-2 shows that company I clearly dominates both issued product and process patents over its competitors, companies II and III. The figure further shows that company III has no issued process patents. A party considering this

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I

II

II I

A (70%)

B (30%)

FIGURE 18.3

patent landscape may choose to examine further the exact patents held by company I, including how they relate to those held by companies II and III, to determine further detailed information on extent of dominance of company I in the technology. Figure 18-3 shows another representation of a technology subdivided by issued product patents (area A) and process patents (area B). In Figure 18-3, the relative dominance of companies I and II are reversed between product and process patents, which may, for example, indicate a potential for crosslicensing between the companies. Of course, these graphics may be further divided into greater detail, indeed, to any level of detail desired. For example, a limitation of Figures 18-2 and 18-3 is that they do not represent the scope of the patent rights, as would be determined by construing the scope of the patents’ claims, of the companies, alone or relative to each other. Thus, while these graphics show the relative dominance of each company based on the number of issued patents (which determines the relative heights of the bars in the figures), they do not show important information related to the claims of the patents. For example, these figures do not indicate whether any companies may have patents with


blocking claims that, despite the overall dominance of one company to another based solely on the number of issued patents, might substantially alter the balance of power in the patent landscape. This could be determined by construing the patent claims, and displayed graphically by showing the scope of each company’s patent claims relative to the patent claims of the other companies, and to the technology as a whole. As is apparent from these figures and this discussion, there is no limit to the level of detail that patent landscapes may graphically display.

B. Strategic Patenting Once a complete patent landscape has been prepared for the technology of interest, the wealth of information in the landscape is tactically used to direct strategic patenting. At the outset, it is important to emphasize that one of the most important purposes of and disciplines in strategic patenting is assuring that a company’s patenting activities and patent portfolio are—and remain— directed to providing exclusivity and freedom to practice the company’s commercially important technology, both present and future. This includes assuring that a company’s patenting strategy aligns tightly with the company’s business model, including its current and future commercial technologies and its research and development activities. An important goal of strategic patenting is efficient use a company’s patenting resources (e.g., by avoiding needless, unfocused patenting activities). 1. Always Focus Patenting Efforts and Strategy on the Company’s Commercially Important Subject Matter Patents are of little value to a company if they do not provide coverage and/or leverage allowing a company to practice technology that is commercially important to it. Sometimes companies patent subject matter simply because it is patentable, without considering the goal that is to be achieved by obtaining a patent. Strategic patenting focuses on obtaining only patents that further a company’s business goals of practicing a given technology. This includes securing rights to exclude others from practicing the technology and providing freedom to practice the company’s commercially important technology. Every patent a company obtains or seeks to obtain, or that it licenses or challenges, should fit within these goals. A limited exception involves a situation in which a company has, or can obtain, patent rights to subject matter that others wish to practice, but that a company has no interest in practicing. In this limited circumstance, these patents may be of value to third parties seeking to practice their subject matter, especially if the company’s patents may block the practice of the parties’ technology. In such a case, the patentee may generally be best served

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by selling or licensing the rights in these patents to the third parties interested in the technology. However, prior to offering these rights for sale or license, the company should conduct defensive due diligence (as discussed in detail in Chapter 19). For example, to potentially increase the value of these rights, the company should research the patent landscape of the relevant technology and determine whether there are competing parties interested in obtaining the rights. If so, the company may increase the value of the rights by offering to sell or license them to the highest bidder. Also, a company may decide to use these patent rights as leverage against third parties who desire to practice the technology and who also own patent rights that may block or adversely affect the ability of the company to practice its commercially important technology. In such situations, the patent-owning company may cross-license its rights in these patents to the third party company in exchange for a license to the third party’s potentially blocking patents. In all cases, however, the primary focus of strategic patenting should remain on obtaining a patent position that best allows a company to practice its commercially important subject matter, now and in the future, including the ability to block competitors from practicing this subject matter. 2. Strategic Patenting Should Involve Outside Patent Counsel It is important that strategic patenting involve outside patent counsel. Frequently, when companies use outside counsel to prepare and prosecute their patent applications and maintain their patents, the counsel may be unaware of the company’s business goals of practicing a given technology or how the company’s patenting strategy can best meet these goals. This often occurs because outside counsel is simply not given this information. This is particularly problematic when more than one outside law firm is used for patenting various aspects of a company’s technology. If outside counsel is unaware of a company’s business model and patenting goals, counsel may simply obtain the broadest claims possible based on the information given them by the company, often only in the form of an invention disclosure. Effective strategic patenting requires, at a minimum, that a company closely monitor the patenting activities of outside counsel, inform them of their business and patenting goals, and guide them toward obtaining patent rights that are appropriate for the company’s goals. More preferably, companies should involve outside counsel in their strategic patenting discussions and decisions. Doing so should help keep the company’s patenting in line with its commercial business goals and avoid unnecessary, unfocused patenting. Additionally, a company may benefit by involving outside patent counsel in its strategic patenting decisions by obtaining outside counsel’s perspective on patenting and business decisions.


When a company has internal patent counsel, it may only need to communicate its strategic business and patenting goals to its outside patent counsel. However, when a company lacks inside patent counsel, involving outside patent counsel in its strategic patenting process and decision making is virtually required for successful results. 3. Strategic Use of Patent Landscapes A company can use patent landscapes for strategic patenting in a number of ways. Patent landscapes inform a company about its own patent rights, including where the company has dominance and can block third parties from practicing certain technologies. Patent landscapes also inform a company about the patent rights of third parties, including patents that might block the ability of the company to practice certain aspects of its commercial technology. Additionally, patent landscapes identify technology areas that appear to be free from patent rights and that are likely to remain so, due, for example, to prior art describing the technology. Finally, patent landscapes inform companies of potentially patentable subject matter within a given technology. This is important for strategically planning the company’s future commercial development goals. Ideally, the company can obtain patent protection on this technology and avoid blocking patents owned by third parties. a) One’s Own Patents A patent landscape typically includes a company’s own patents. This can feature a showing of the coverage of the company’s patents, including how their coverage relates to the overall technology of the patent landscape, and to the coverage of third party patents in that technology. It can also show the strengths and potential weaknesses of the company’s patent position. One important aspect of this is the identification of technology areas in which the company has significant dominant patent rights. A patent landscape may also identify subject matter in which a company has significant potential patent rights (e.g., pending patent applications, invention disclosures, and ongoing research). Further, it can also identify areas of the technology of the patent landscape where the company has little or no current or potential patent coverage. As a company’s patenting efforts should be focused on allowing the company to exclusively practice subject matter that is commercially important to it, the dominant technology areas covered by a company’s patents in a patent landscape should align closely with the technology of the company’s business model. This includes future technology of the company. If there is substantial variance between a company’s commercial technology and its patent rights, a company’s patenting strategy should be evaluated carefully and realigned with the business goals of the company as necessary.

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An example of a common situation in which a company’s patenting strategy has lost its focus on the company’s commercial technology involves the payment of maintenance fees on patents and the prosecution of patent applications that claim subject matter that no longer covers a company’s commercial technology. Thus, these claims do not block the competition from potentially copying the company’s commercial technology. This can happen when patent applications are filed early in the development of a company’s commercial technology and the final commercial subject matter differs from that covered in the early applications and patents issuing from these applications. This can be exacerbated when, for example, outside counsel is responsible for obtaining and maintaining these patent rights, but this counsel has not been kept up-to-date by the company on the evolution and development of its commercial technology. If these patents or applications have value for reasons other than covering a company’s technology (such as by blocking a third party’s technology), the company should consider licensing or selling them to third parties. Otherwise, there may be little or nothing for the company to gain by paying maintenance fees on these patents or paying to prosecute these applications. Nevertheless, this situation often occurs simply because a company automatically pursues all of its patent applications and pays all of its patents’ maintenance fees without regard to the strategic value of the applications or patents. Again, the goal of strategic patenting is to focus a company’s patenting resources toward obtaining patent protection for its current and future commercial technology and to avoid unfocused and unproductive activities. When evaluating a company’s patent portfolio, it is important to analyze the company’s patent dominance in the technology of the patent landscape. This includes determining the extent to which the company owns patents or potential patent rights (such as those in pending applications or company inventions) that cover its commercial technology and that block third parties from practicing this subject matter. Generally, a company’s most valuable patent rights are those that allow it to control who may practice the subject matter of its commercial technology so that it can prevent its competition from copying its commercial technologies. Companies generally choose to retain these patent rights. However, where the company’s patent exclusivity covers subject matter beyond what the company practices or plans to practice, the company may license its patent rights to third parties. Further, where a company’s patents dominate a certain aspect of a technology, this should be taken into consideration in planning future patenting and commercial developments of the company’s technology. As all patents expire,10 strategic patenting should include consideration of obtaining as many patents

10. 35 U.S.C.S. § 154(a)(2) (2009) (generally, the term of a U.S. patent is 20 years from the earliest priority date of the patent).


as possible in the technology where the company has dominant patent rights. For example, this may be done by patenting as many aspects of a patent’s specification as possible through continuation and divisional applications. This approach also includes strategically extending patent coverage in the technology by developing and patenting improvements in the technology that still cover the key aspects of the technology the company needs protected to cover its current and future commercial technologies. Improvement patents can extend the term of exclusivity because they have later filing dates (and thus later-expiring terms) than the original patents. Importantly, obtaining improvement patents to maintain a company’s patent dominance in a given technology may best be done by coordinating the company’s research and development with the scope of the potentially patentable subject matter and commercially important technology. In this manner, research and development are driven in a direction that allows a company to maintain, extend, and expand its patent dominance in its commercially important subject matter. However, as stressed throughout this chapter, a company should not allow the mere possibility of obtaining or extending patent exclusivity in a technology to drive the direction of its commercial development. Rather, under strategic patenting, the potential of obtaining patent exclusivity in a technology should be a factor in determining the future direction of a company’s technology, but should be considered with all other factors. b) Third Party Patents A key use of patent landscapes is the identification and characterization of third party patents that might adversely affect (e.g., block) the practice of a company’s commercially important technology.11 When such patents are noted, consideration should be given to clearance (freedom to operate) issues as discussed in Chapter 12, including determining whether the patents may be found by a reasonable court not to be infringed, or to be invalid or unenforceable.12 Other issues to consider regarding potentially blocking third party patents include designing around the patents’ claims, licensing (including reciprocal (cross-) licensing), and acquiring the patents. Challenging the patents (e.g., in post-grant challenges as discussed in Chapter 15) is also a consideration.13

11. Importantly, showing or describing the relationship of a company’s technology to third party patent rights must be subject to the limitations on this issue discussed in Section I[A][1] above. These limitations must be considered prior to preparing any documents representing the relationship of a company’s technology to third party patent rights. 12. Id. 13. Id.

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Where potentially blocking third party patents are noted, close attention should be paid to the possibility of related U.S. patents that may also potentially block the company’s technology. Typically, such patents include those issuing from the same parent application, such as from continuation or divisional applications. U.S. Patent Office records may be searched for issued patents based on a number of criteria including assignee name and key technical terms in the claims, abstract, or specification.14 These searches may locate additional third party patents with claims that may affect the practice of the company’s technology. U.S. Patent Office records should also be searched for published, pending third party patent applications having claims that might cover or affect the company’s technology.15 The claims and the status of any such applications should be monitored for the possibility of any patents issuing with claims that could potentially affect (e.g., block) the practice of the company’s technology. Clearance evaluations and opinions of the claims of these applications will provide information on whether the practice of the company’s technology might infringe any valid claims of any U.S. patents that may issue from these applications.16 In addition, the expiration dates of important third party patents should be noted. All U.S. patents expire.17 Typically, the term of a U.S. patent is 20 years from the earliest priority date of the patent application.18 However, there are certain provisions under U.S. patent law that can extend the term of a patent.19 Finally, the presence and scope of third party potentially blocking patents should be taken into consideration in developing a company’s commercial subject matter. As mentioned above, when a third party patent blocks a certain aspect of a company’s current or future commercial technology, it may be

14. E.g., http://www.uspto.gov/ (follow the prompts to search U.S. patents by assignee (company) name, key terms in claims or specification, etc.). 15. E.g., http://www.uspto.gov/ (follow the prompts to search pending published U.S. patent applications by assignee (company) name, key terms in claims or specification, etc.). 16. Importantly, any showing or describing the relationship of a company’s technology to third party patent rights must be subject to the limitations on this issue discussed in Section I[A][1] above. These limitations must be considered prior to preparing any documents representing the relationship of a company’s technology to third party patent rights. 17. 35 U.S.C.S. § 154(a)(2) (2009). 18. Id. 19. 35 U.S.C.S. § 154(b) (2009) (“patent term adjustment” allowing for the extension of a patent’s term for up to three years for delays caused by the U.S. Patent Office in examining the patent’s application); 35 U.S.C.S. §§ 155–156 (2009) (“patent term restoration” allowing the extension of a patent’s term for up to five years under very specific circumstances related to FDA review and approval of subject matter claimed in a patent).


possible to design around the patent’s claims.20 However, when considering designing around technology, care must be taken that the design-around technology does not adversely affect the commercialization of the company’s technology. Also, prior to designing around a patent’s claims, care must be taken to be certain that all related or similar patents and patent applications have been located so that a company can be as certain as possible that designaround technology will not infringe other patents or claims of pending applications. Further still, prior to designing around specific claims, a careful and complete noninfringement evaluation or opinion must be conducted21 on all claims that are close to the technology so that the design-around technology is free of infringing the claims—literally22 or under the doctrine of equivalents.23 c) Subject Matter Potentially Free from Patent Coverage Patent landscapes identify and define subject matter that is potentially free from patent coverage and likely to remain so. A common example is subject matter that has been described in (or is obvious from that described in) a printed publication (including scientific and technical papers, issued patents, and published patent applications) for more than one year before a patent application was filed claiming (or having the ability to claim) the subject matter disclosed. Because of the prior art, a company cannot obtain its own exclusivity within this subject matter. Therefore, it cannot use patent rights to prohibit others from copying its activities within the subject matter. However, neither can any third party. Therefore, under strategic patenting, this subject matter should be taken into account when considering commercial development and related patenting strategies. One manner in which a company may use this subject matter to its advantage is to develop and patent improvements in it. If these improvements are commercially important to the company, patent rights on the improvements could provide exclusivity to the improvement.

20. Importantly, any showing or describing the relationship of a company’s technology to third party patent rights must be subject to the limitations on this issue discussed in Section I[A][1] above. These limitations must be considered prior to preparing any documents representing the relationship of a company’s technology to third party patent rights. 21. Importantly, all analyses, evaluations and opinions regarding design-around technology and any other issues must be subject to the prohibition of expressly or impliedly indicating that any of a company’s technology may infringe any valid and enforceable third party patent, as discussed in Section I[A][1] above. These limitations must be considered prior to preparing any documents representing the relationship of a company’s technology to third party patent rights. 22. See Chapters 3 and 12 for noninfringement evaluations and opinions for literal infringement. 23. See Chapters 4 and 12 for noninfringement evaluations and opinions for infringement under the doctrine of equivalents.

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Further, the improved technology would be unlikely to be blocked by third party patents on the unimproved subject matter. d) Potentially Patentable Subject Matter Another important aspect of patent landscapes is the identification of areas of technology that are not currently covered by known U.S. patent rights, but that appear to be patentable. Frequently, this subject matter is the claimed subject matter of pending company and third party patent applications. This may be especially significant where a company has pending applications claiming what appears to be patentable subject matter and there are no known third party patents or patent applications claiming the same or similar subject matter. This information is useful in strategic patenting so that patent attorneys can work with a company’s research and development and commercial development teams in determining the direction of future commercial development. The potential ability for a company to obtain exclusive patent rights in new technology can be a strong factor in its decision in which direction it should take its future technology. Moreover, where no third party patents have been identified in this subject matter, the company may be able to practice its technology having patent exclusivity, free from potentially blocking third party patents. Should this technology become commercially important, it is possible that, in the future, third parties could obtain patent rights for their own patentable inventions within the technology. These patents might even block certain aspects of future patenting or development for the company. However, if the company is the first company to enter a technology area, it will likely obtain the broadest possible patent rights in the technology, thus obtaining the broadest possible ability to block third parties in the technology and avoid being blocked by others. e) Identification of Significant Patent Holders in a Technology and Strategic Use of This Knowledge Patent landscapes show the major holders of patents in the technology of the landscape and the aspects of the technology in which specific patent holders dominate. They may also show the relative strength of each company’s patents. This information can be useful in forming strategic alliances as well as in considering licensing and acquisitions, including for individual patents and entire companies. For example, a patent landscape may show a situation in which company A owns patents covering a certain aspect X of the technology of the landscape, and company B owns patents covering a different aspect Y of the technology. Furthermore, the combination of patents covering both X and Y technology would block third parties from practicing much of the

Claim Construction Is Required for Evaluations and Opinions 643

technology of the landscape. In such a situation, companies A and B may desire to merge, or one company may want to purchase the other company or its patents so that a single entity would control patent rights covering most of the technology of the patent landscape. In another example, a patent landscape may show a situation in which company A owns patents covering a certain aspect of the technology of the landscape and company B owns patents covering a different aspect of the technology, and wherein company A’s patents block the practice of company B’s commercial technology. In such a case, company B may desire to purchase company A or its patents, or to license its patents to remove the blocking patents. In still another example, company A owns patents covering a certain aspect of the technology of the landscape and company B owns patents covering a different aspect of the technology; company A’s patents block the practice of company B’s commercial technology and vice versa. Companies A and B may choose to cross-license each others’ patents so that each company may practice its technology free from being blocked by the other company’s patents. Another useful advantage of identifying the companies owning patents covering specific aspects of the technology of a patent landscape is that it allows a company to identify its patenting competitors. The company then can keep a watch on the patenting activities of its competitors to coordinate its strategic patenting in light of those activities. This allows the company to strategize proactively its patenting to obtain maximum exclusivity and minimum adverse exposure to third party patent rights. Information on a company’s patenting activities can be found online at the U.S. Patent and Trademark Office’s Web site24 and through other publically accessible databases (such as SEC filings).25

II. Claim Construction Is Required for Evaluations and Opinions of Patent Claim Scope/Infringement, Validity, Enforceability, and Ownership Prior to addressing patent evaluations and opinions of claim scope/infringement, validity, enforceability, and ownership in Sections III through VI below, this section discusses claim construction. This is a necessary first step to these topics because claim construction is a requirement of virtually all evaluations

24. E.g., http://www.uspto.gov/ (follow the prompts to search U.S. patents and pending patent applications by assignee (company) name). 25. E.g., http://www.sec.gov/ (follow the prompts to search SEC filings using various criteria).


and opinions of patent claim scope/infringement, validity, enforceability, and ownership. As discussed in Chapter 2, claim construction is the determination of the proper legal meaning of a patent’s claims. It is based upon determining the ordinary meaning of claim language to one of ordinary skill in the relevant art at the time of the patent application, taking into consideration any specific meanings given to the claim terms in the specification of the patent or during its prosecution history in the U.S. Patent Office (i.e., the intrinsic evidence).26

A. Claim Construction Is Essential to Virtually All Patent Evaluations and Opinions, Including Claim Scope/ Infringement, Validity, Enforceability, and Ownership As the claims of a patent define the subject matter of the patent grant, claim construction is essential to virtually all evaluations and opinions of U.S. patents, including those of claim scope/infringement, validity, enforceability, and ownership.27 Indeed, without determining the proper meaning of a patent’s claims, it is simply not possible to evaluate and opine on patents for purposes of determining these matters. In fact, U.S. courts consistently hold that it is not possible to prepare a competent legal opinion of noninfringement or invalidity without properly construing a patent’s claims.28 Rare exceptions to this rule might include situations in which only a patent’s term, and not its claims, is at issue.

B. Claim Construction Must Be Based on a Patent’s Intrinsic Evidence: The Claims, the Specification, and Its Prosecution History in the U.S. Patent Office, Including All Cited Prior Art Claim construction involves determining the meaning of a patent’s claims based on the intrinsic evidence relevant to the patent, which comprises the patent’s claims, specification, and prosecution history in the U.S. Patent Office,

26. E.g., Phillips v. AWH Corp., 415 F.3d 1303 (Fed. Cir. 2005) (en banc); Markman v. Westview Instruments, Inc., 52 F.3d 967 (Fed. Cir. 1995) (en banc), aff ’d, 517 U.S. 370 (1996); Vitronics Corp. v. Conceptronic, Inc., 90 F.3d 1576 (Fed. Cir. 1996); Innova/Pure Water, Inc. v. Safari Water Filtration Sys., 381 F.3d 1111 (Fed. Cir. 2004). 27. See Chapter 2; e.g., Phillips, 415 F.3d at 1303; Markman, 52 F.3d at 967; Vitronics, 90 F.3d at 1576; Innova/Pure Water, 381 F.3d at 1111. 28. E.g., Critikon, Inc. v. Becton Dickinson Vascular Access, Inc., 120 F.3d 1253, 1259–60 (Fed. Cir. 1997) (finding that opinions were not sufficiently competent to overcome a charge of willful infringement where they contained “no analysis of specific claims, [and] no interpretation of claim language. . . .”).

Claim Scope/Infringement Evaluations and Opinions

including all cited prior art.29 Therefore, it is necessary for anyone creating an evaluation or opinion of a U.S. patent to obtain and review the complete prosecution history of the patent.30 Importantly, the prosecution history of a U.S. patent includes the prosecution history in the U.S. Patent Office of the application that issued as the subject patent. Additionally, it includes the prosecution histories of other U.S. patents and/or patent applications that are “formally” related to the subject patent and in which a common claim term is at issue. Applications that are formally related to a patent include: (a) parent and ancestor applications from which the patent at issue is related as, or via, continuation, divisional, or continuation-in-part applications from the parent or ancestor applications; (b) sibling applications to the patent at issue that are related to it because of pending from a common ancestor or parent application as, or via, continuation, divisional, or continuation-in-part applications; and (c) child and grandchild applications that are related to the patent at issue as, or via, continuation, divisional, or continuation-in-part applications. Therefore, the prosecution history of a patent may include “formally related” applications having at least one claim term in common with the patent at issue, wherein the related applications were prosecuted in the U.S. Patent Office before, during, or even after prosecution of the application that issued as the patent at issue.31 Furthermore, the intrinsic evidence also includes prior art cited in the patent or in the patent’s prosecution history. Thus, this prior art must also be considered in construing a patent’s claims.

III. Claim Scope/Infringement Evaluations and Opinions Typically, one analyzes one’s own patents for claim scope/infringement in order to determine the scope of coverage of the claims for preparing a patent

29. E.g., Phillips, 415 F.3d at 1313; Vitronics, 90 F.3d at 1582; Nystrom v. Trex Co., Inc., 424 F.3d 1136, 1142 (Fed. Cir. 2005). 30. E.g., Markman, 52 F.3d at 980. 31. E.g., Goldenberg v. Cytogen, Inc., 373 F.3d 1158, 1167–68 (Fed. Cir. 2004) (formal relationship required); Microsoft Corp. v. Multi-Tech Sys., Inc., 357 F.3d 1340, 1349 (Fed. Cir. 2004) (statement made during prosecution of related patent operated as a disclaimer with respect to a later-issued patent.”); Advanced Cardiovascular Sys. v. Medtronic, Inc., 265 F.3d 1294, 1305 (Fed. Cir. 2001) (the prosecution history of a related patent must address “a limitation in common with the patent in suit”); NTP, Inc. v. Research in Motion, Ltd., 418 F.3d 1282, 1293 (Fed. Cir. 2005); Verizon Servs. Corp. v. Vonage Holdings Corp., 503 F.3d 1295, 1306 (Fed. Cir. 2007) (“We have held that a statement made by the patentee during prosecution history of a patent in the same family as the patent-in-suit can operate as a disclaimer.” (citing Microsoft)).

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landscape. Another common use includes due diligence on the part of a patentee prior to selling or licensing its patent rights to others. Often, it is only necessary to evaluate and opine on a patent’s claim scope, which is done by construing the patent’s claims. Combined infringement and claim scope evaluations and opinions are usually performed only when one seeks to determine the scope of the patent’s claims and to determine whether a given technology infringes them. For example, this may be done prior to filing a patent infringement suit as part of a patentee/infringement plaintiff ’s duties of prefiling investigation under Rule 11 (as discussed in Chapter 20). Infringement evaluations and opinions are also commonly carried out prior to licensing or selling patent rights so that the patentee knows whether a potential licensee’s or purchaser’s technology infringes the claims of the patent to be licensed or sold (as discussed in Chapter 19). Evaluations and opinions of claim scope of U.S. patents involve an objective determination (based on proper application of up-to-date U.S. patent law) of how a reasonable U.S. court should construe the claims of a patent. Evaluations and opinions of infringement involve an objective determination of how a reasonable U.S. court would decide whether specific subject matter might infringe the objectively construed claims of a patent, either literally or under the doctrine of equivalents.

A. For Infringement Determinations, Clearly Define the Potentially Infringing Subject Matter When evaluating or opining on a patent’s claims for both scope and potential infringement, it is important that the potentially infringing subject matter be defined fully and clearly. Infringement evaluations and opinions are based on the subject matter exactly as described in the evaluation or opinion. Moreover, they cannot be applied to any other subject matter, however slight the differences may be, because infringement is determined by comparing the precise details of the technology with the construed claims. Thus, where multiple embodiments of a given technology are to be evaluated for potential infringement, a complete and separate evaluation and opinion must be rendered for each embodiment of the technology. There are no shortcuts in infringement evaluations and opinions, especially regarding the potentially infringing subject matter.

B. Claim Construction Is Always Required As discussed above, a first and necessary step in virtually all evaluations and opinions of patents is claim construction. This is, of course, the goal of claim

Claim Scope/Infringement Evaluations and Opinions

scope evaluations and opinions. Further, claim construction is a necessary first step in evaluating and opining on patent infringement.32 In infringement evaluations and opinions, the construed claims are then compared against the explicitly defined potentially infringing subject matter to determine whether there is infringement.33

C. Infringement Evaluations and Opinions Should Consider Both Literal Infringement and Infringement Under the Doctrine of Equivalents A claim of a U.S. patent is infringed if every claim limitation is found in the potentially infringing subject matter, either literally or equivalently.34 Therefore, infringement evaluations and opinions of U.S. patents should consider both literal infringement and infringement under the doctrine of equivalents.35 Chapter 3 provides a detailed discussion on evaluating and opining on literal infringement, and Chapter 4 provides one on evaluating and opining on infringement under the doctrine of equivalents.

D. Consider Possible Indirect Infringement Direct infringement occurs when an accused technology literally or equivalently contains every limitation of a patent’s claim.36 However, U.S. patent law provides for a number of means by which a U.S. patent may be infringed in addition to direct infringement. These are covered in detail in Chapter 5, and include inducement of infringement, contributory infringement, and joint infringement. Thus, if an infringement evaluation and opinion contains a finding that certain subject matter does not infringe the claims of a U.S. patent directly, the person creating the evaluation and opinion must also consider whether the potentially infringing subject matter infringes the claims under any other

32. E.g., Cybor Corp. v. FAS Techs., Inc., 138 F.3d 1448, 1454 (Fed. Cir. 1998) (en banc); WarnerLambert Co. v. Purepac Pharm. Co. (In re Gabapentin Patent Litig.), 503 F.3d 1254, 1259 (Fed. Cir. 2007); Becton Dickinson & Co. v. C.R. Bard, Inc., 922 F.2d 792, 796 (Fed. Cir. 1990). 33. E.g., Cybor Corp., 138 F.3d at 1454; Warner-Lambert, 503 F.3d at 1259; Becton Dickinson, 922 F.2d at 796. 34. E.g., Festo Corp. v. Shoketsu Kinzoku Kogyo Kabushiki Co., 535 U.S. 722, 731–732 (U.S. 2002); Allen Eng’g Corp. v. Bartell Indus., 299 F.3d 1336, 1345 (Fed. Cir. 2002). 35. E.g., Festo, 535 U.S. at 731–32; Allen Eng’g., 299 F.3d at 1345. 36. E.g., Festo, 535 U.S. at 731–32; Allen Eng’g, 299 F.3d at 1345.

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theory of infringement as discussed in Chapter 5. An evaluation or opinion of no infringement should not be reached until all possible forms of infringement have been ruled out. Conversely, once one form of infringement has been determined to be clearly likely, it is usually not necessary to evaluate other potential forms of infringement. Typically, in the context of infringement evaluations and opinions, if the subject matter of interest infringes the patents, it is due to direct infringement. Thus, where direct infringement is clearly shown, it is usually not necessary to evaluate other forms of infringement.

E. Reporting Considerations Evaluations and opinions on patent infringement need not and, in fact, preferably do not contain absolute determinations and opinions. As discussed throughout this treatise, U.S. patent law is complex and constantly evolving, and evaluations and opinions of patent infringement are necessarily based on facts that rarely allow one to conclude issues with certainty. Indeed, the Federal Circuit Court of Appeals has recognized that “[a]n opinion of counsel, of course, need not unequivocally state that the client will not be held liable for infringement. An honest opinion is more likely to speak of probabilities than certainties.”37 Appendices A, B, and C provide examples of patent noninfringement and invalidity opinions, including ways in which to express the level of certainty of conclusions.

IV. Validity Evaluations and Opinions Evaluations and opinions of validity of one’s own U.S. patents are typically performed when evaluating a company’s patent portfolio for purposes such as creating a patent landscape wherein the strength and validity of a company’s patents are shown. This may also be done prior to a company bringing an infringement suit in order to satisfy a patentee/plaintiff ’s Rule 11 duties (as discussed in Chapter 20), to a company potentially seeking post-issuance correction of a patent (as discussed in Chapter 15), or to a company licensing or selling a patent (as discussed in Chapter 19). Evaluations and opinions of validity of U.S. patents involve an objective determination that, based on proper application U.S. patent law, a reasonable U.S. court should hold that at least one claim (and preferably all claims) of a


Validity Evaluations and Opinions

specific U.S. patent are valid based on the evidence expressly described in the evaluation or opinion.

A. Claim Construction Is Always Required As discussed above, a first and necessary step in virtually all evaluations and opinions of patents is claim construction. Accordingly, claim construction is a necessary first step in evaluating and opining on patent validity.38 The construed claims are then evaluated for validity by comparing them with the prior art (for art-based validity) or with the specification (for validity based on issues such as lack of enablement or written description).39

B. Consider All Possible Means of Validity, Including All Types of Anticipation, Enablement, Written Description, Best Mode, and Other Issues A patent’s claims may be invalid under many different and divergent grounds. These are discussed in detail in Chapter 6 (anticipation by printed publications), Chapter 7 (other forms of anticipation), Chapter 8 (obviousness), and Chapter 9 (other forms of validity). For example, a common form of validity is anticipation under 35 U.S.C. § 102(b) based on a printed publication. A patent claim is invalid under 35 U.S.C. § 102(b) by a printed publication if the publication is prior art to the patent40 and discloses “each and every claim limitation . . . either explicitly or inherently.”41 Moreover, “a prior art reference may anticipate without disclosing a feature of the claimed invention if that missing characteristic is necessarily present, or inherent, in the single anticipating reference.”42 In addition to anticipation by a printed publication, U.S. patent law provides a number of means by which a patent claim may be anticipated. For example, the following nonlimiting examples occurring under certain circumstances43 may render a patent claim invalid due to anticipation: sale, offer for sale, public use, public knowledge, prior patenting, or abandonment of the invention.

38. 39. 40. 41. 42. 43.

E.g., In re Omeprazole Patent Litig., 483 F.3d 1364, 1371 (Fed. Cir. 2007). Id. See Chapter 6 for details. Omeprazole, 483 F.3d at 1371. Schering Corp. v. Geneva Pharm., Inc., 339 F.3d 1373, 1377 (Fed. Cir. 2003). See Chapter 7 for details.

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Still further (as discussed in detail in Chapter 9), U.S. patent law provides other means by which a patent’s claims may be found invalid. These include the following nonlimiting examples: lack of an enabling description for the subject matter of the claim,44 lack of sufficient written description to support the claim,45 and lack of description of the best mode of practicing the claimed invention.46 Therefore, those creating evaluations and opinions of patent validity should consider all possible bases of validity. This is particularly important in evaluations and opinions of one’s own patents where the goal is to rule out all possible means of validity and to opine that a patent appears to be valid.

C. Every Claim Must Be Addressed in Validity Evaluations and Opinions As discussed in Chapters 6–9, the validity of a patent is determined on a claim-by-claim basis. Therefore, evaluations and opinions of patent validity must consider the validity of each claim of a patent separately and in full. This necessarily includes construing the terms of each claim of the patent. This is distinguished from a patent infringement evaluation and opinion, in which it is not always necessary to address infringement of all claims. For example, if it is determined that an independent claim is not infringed, it is unnecessary to address infringement of the claims that depend from the noninfringed claim, because these claims cannot be infringed by the same subject matter.47

D. Prior Art Searching A critical aspect of validity determinations of patents is prior art searching. As mentioned above, anticipation by printed publication is among the most common ways that an issued patent’s claims are found to be invalid. This is likely due (at least in part) to the relative ease of obtaining prior art printed publications and of proving the disclosure of printed publications. For this reason, those preparing validity evaluations and opinions should always perform detailed and extensive searches of prior art for printed publications

44. 45. 46. 47.

35 U.S.C.S. § 112, P 1 (2009). Id. Id. E.g., Jeneric/Pentron, Inc. v. Dillon Co., Inc., 205 F.3d 1377, 1383 (Fed. Cir. 2000); Wolverine World Wide, Inc. v. Nike, Inc., 38 F.3d 1192, 1199 (Fed. Cir. 1994); Wahpeton Canvas Co., Inc. v. Frontier, Inc., 870 F.2d 1546, 1553 (Fed. Cir. 1989).

Validity Evaluations and Opinions

that may invalidate claims of the subject patent. This searching is especially important when one is evaluating one’s own patent for validity as one must ultimately conclude that the prior art does not appear to invalidate the claims. Therefore, it is very important that all prior art that might affect the patent’s validity be located. Important issues when searching for potentially invalidating prior art include the use of preferably two or more independent and responsible search agencies to conduct separate, independent searches. It is extremely important that the search agencies be given as much general and specific information as possible as to the invention claimed so that the prior art search can be as broad, yet as focused as possible. Furthermore, the attorneys conducting the validity evaluation and opinion generally should also conduct their own independent prior art search for potentially invalidating prior art as they are generally the most knowledgeable about a client’s patented technology and, therefore, the most likely to identify potentially invalidating prior art. Valuable information for use in searching for potentially invalidating prior art that should be given to independent searching agencies and used by the evaluating and opining attorneys includes: (a) the patent under scrutiny; (b) any patents related to the patent under scrutiny (both U.S. and non-U.S. patents); (c) third party patents (both U.S. and related non-U.S. patents) located in searches for potentially blocking third party patents in related clearance evaluations and opinions, if any; and (d) any prior art (both U.S. and non-U.S.) cited in the prosecution histories of the patent under scrutiny and those of any related patents (both U.S. and non-U.S.). As discussed in Section I[A] above, the results of prior art searches on technology within a patent landscape can be used to prepare patent landscapes. Specifically, the results of these searches can be used to populate the field of the landscape covering prior art and other non-patentable subject matter for the technology of the searches.

E. Limiting Search-Related Liability The importance of thorough, competent prior art searching cannot be overstated in the context of evaluating and opining that a patent’s claims appear to be valid. This same significance applies to evaluating the patent for potential invalidity under the non-printed publication grounds of patent invalidity (as discussed above and in Chapters 7–9). However, it is never possible to guarantee a company that there is no printed prior art in existence that would invalidate one or more claims of its patents, or that no court would find that there are no other types of invalidity that could affect the patent. Therefore, evaluations and opinions of the validity of a company’s patents should never conclusively state or guarantee that the claims of the patents are valid. Rather (and as discussed in more detail in

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Chapter 13 in the context of evaluating and opining on patent validity in due diligence), validity results in patent validity evaluations and opinions should be reported in the context of the limitations that prevent anyone drawing an absolute conclusion that the company’s patents are valid. For example, these include details of the technology searched, the search terms, dates searched, databases searched, and any limitations the client may have imposed (such as restricting the use of multiple independent searching agencies, time and cost constraints, and the like).

G. Reporting Considerations Evaluations and opinions on patent validity need not and, in fact, preferably do not contain absolute determinations and opinions. As discussed throughout this treatise, U.S. patent law is complex and constantly evolving, and evaluations and opinions of validity of U.S. patents are necessarily based on facts that rarely allow one to conclude issues with certainty. Indeed, the Federal Circuit Court of Appeals has recognized that “[a]n opinion of counsel, of course, need not unequivocally state that the client will not be held liable for infringement. An honest opinion is more likely to speak of probabilities than certainties.”48 Appendices A, B, and C provide examples of patent noninfringement and invalidity opinions, including ways in which to express the level of certainty of conclusions.

V. Enforceability Evaluations and Opinions Evaluations and opinions of enforceability of one’s own U.S. patents are typically performed when evaluating a company’s patent portfolio for purposes such as creating a patent landscape. This allows the company to evaluate the strength and enforceability of its patents prior to bringing an infringement suit in order to satisfy a patentee/plaintiff ’s Rule 11 duties (as discussed in Chapter 20) or to licensing or selling a patent (as discussed in Chapter 19), as well as for purposes of discovering potential grounds of unenforceability that may be “cured” before selling or enforcing the patents. Evaluations and opinions of enforceability of U.S. patents involve an objective determination that based on proper application of up-to-date U.S. patent law, a reasonable U.S. court should hold that a U.S. patent is not unenforceable. As discussed in detail in Chapter 10, U.S. courts generally hold



patents unenforceable when patentees have engaged in inequitable conduct (also know as fraud on the Patent Office) in obtaining a U.S. patent49 or have engaged in improper enforcement of a U.S. patent. As discussed in detail in Chapter 10, enforceability issues most frequently arise in situations where, during prosecution of a patent’s application, a patentee intentionally withholds known material prior art from the Patent Examiner in violation of the patentee’s duty of disclosure to the U.S. Patent Office.50 As also discussed in Chapter 10, a patent that is unenforceable is not, for that reason, invalid.51 Rather, the patent cannot be enforced in court. However, the practical effect of a court determining that a U.S. patent is unenforceable is similar to the effect of its holding that all of the claims of a patent are invalid. If a court holds that a patent is unenforceable for conduct relating to even one claim of a patent, the entire patent is unenforceable.52 Therefore, as with a patent having all invalid claims, an unenforceable patent cannot be infringed because the claims cannot be enforced by the patentee in an infringement action.

A. Claim Construction Is Always Required As discussed above, a first and necessary step in virtually all evaluations and opinions of patents is claim construction. Accordingly, claim construction is also a necessary first step in evaluating and opining on patent enforceability.53 The construed claims are then evaluated for potential unenforceability.54 Because a holding of inequitable conduct in the procurement of a patent (leading to a potentially unenforceable patent) requires a court to hold that the patentee intentionally and fraudulently made a material misrepresentation or omission to the Patent Office, one must construe the patent’s claims, often as existing during prosecution, to determine whether any representation or

49. However, a finding by a court of inequitable conduct does not compel a holding that a patent is unenforceable. Kemin Foods, L.C. v. Pigmentos Vegetales Del Centro S.A. De C.V., 464 F.3d 1339, 1346 (Fed. Cir. 2006) (“Even when a court finds that the patentee failed to disclose material information to the PTO and acted with deceptive intent, the court retains discretion to decide whether the patentee’s conduct is sufficiently culpable to render the patent unenforceable.”); Hoffmann-La Roche, Inc. v. Promega Corp., 323 F.3d 1354, 1359, 1372 (Fed. Cir. 2003). 50. See Chapter 10; e.g., Dayco Prods. v. Total Containment, Inc., 329 F.3d 1358, 1363 (Fed. Cir. 2003). 51. See Chapter 10; e.g., Minn. Mining & Mfg. Co. v. Johnson & Johnson Orthopaedics, Inc., 976 F.2d 1559, 1569 (Fed. Cir. 1992). 52. E.g., PerSeptive Biosystems, Inc. v. Pharmacia Biotech, Inc., 225 F.3d 1315, 1322 (Fed. Cir. 2000). 53. E.g., Li Second Family L.P. v. Toshiba Corp., 231 F.3d 1373, 1380 (Fed. Cir. 2000); Minn. Mining, 976 F.2d at 1569. 54. E.g., Li Second Family, 231 F.3d at 1380; Minn. Mining, 976 F.2d at 1569.


omission to the Patent Office was material.55 As discussed in detail in Chapter 10, materiality is related to the patentability of a patent’s properly construed claims.56

B. Not Every Claim May Need to Be Addressed in Evaluations and Opinions of Enforceability of Patents As discussed in Chapter 10, a patent that is unenforceable (e.g., for fraud on the Patent Office due to a material misrepresentation to even a single claim), is unenforceable as to every claim.57 Therefore, the evaluation may end as soon as a single claim is found to be unenforceable. However, where the evaluation and opinion is that a patent is enforceable, every claim must be evaluated, as a finding that even one claim is unenforceable renders an entire patent unenforceable. Thus, in order to produce an evaluation or opinion that a patent appears to be enforceable, every claim must be individually examined and found to be enforceable.

C. Potential Enforceability Issues Issues to investigate when evaluating a patent for potential enforceability problems include whether prior art from related cases having similar claims (including art cited in related non-U.S. applications) was cited in the subject patent application, and whether related, co-pending U.S. patent applications (including Office Actions in related applications concerning similar claimed subject matter) were brought to the attention of the Examiner. Other sources of information that may be material and should be checked for citation to the Patent Office in the patent of interest include litigation related to the claimed subject matter (both in the U.S. and abroad) and data related to the invention submitted to the FDA or published, especially negative data. Other evidence that may lead to enforceability for inequitable conduct includes intentional omission of co-inventors, failure to disclose issued patents to standardssetting organizations, declarations submitted that provide false or misleading data or fail to properly disclose the relationship between the declarant and the

55. Kemin Foods, L.C. v. Pigmentos Vegetales Del Centro S.A. De C.V., 464 F.3d 1339, 1346 (Fed. Cir. 2006); Hoffmann-La Roche, Inc. v. Promega Corp., 323 F.3d 1354, 1372 (Fed. Cir. 2003). 56. See Chapter 10; e.g., Kemin Foods, 464 F.3d at 1346; Hoffmann-La Roche, 323 F.3d at 1372. 57. E.g., PerSeptive Biosystems, Inc. v. Pharmacia Biotech, Inc., 225 F.3d 1315, 1322 (Fed. Cir. 2000).

Evaluations and Opinions Regarding Patent Ownership 655

applicant, and intentionally incorrect use of past tense in describing prophetic examples.

D. Reporting Considerations Evaluations and opinions on patent enforceability need not and, in fact, preferably do not contain absolute determinations and opinions. As discussed throughout this treatise, U.S. patent law is complex and constantly evolving, and evaluations and opinions of inequitable conduct are based on facts that rarely allow one to conclude issues with certainty. Indeed, the Federal Circuit Court of Appeals has recognized that, in the context of patent noninfringement and invalidity opinions “[a]n opinion of counsel, of course, need not unequivocally state that the client will not be held liable for infringement. An honest opinion is more likely to speak of probabilities than certainties.”58 Appendices A, B, and C provide examples of patent noninfringement and invalidity opinions, including ways in which to express the level of certainty of conclusions.

VI. Evaluations and Opinions Regarding Patent Ownership Evaluations and opinions of the ownership of a company’s patents should be performed when a company evaluates its patent rights, including (but not limited to) when creating a patent landscape and when preparing to sell, license, or enforce those rights. Evaluations and opinions of the ownership of a company’s patents are critically important. If there is even one co-inventor on a U.S. patent who is not under an obligation to assign his or her patent rights to a company that otherwise owns all other rights in the patent, this split ownership virtually eliminates the commercial value of the patent. As discussed below, this is true because under U.S. patent law, a co-owner of a patent has an undivided interest in the patent and may fully exploit the entire patent without requiring permission from, or accounting to, the other co-owners. Practically, this means that a co-owner of a patent who is not under an obligation to assign his or her rights to the other co-owner(s) of the patent may assign or license his or her rights to the entire patent to any third party, including competitors of the other co-owner(s), and can even dedicate his or her the rights to the patent to the public to use free of charge.



A. Ownership of a U.S. Patent Is Based on Inventorship The inventorship of a U.S. patent determines the ownership of the patent.59 Inventors, including co-inventors, are presumed to own patents they invent unless they have assigned their ownership interest, in writing, to another party. As explained by the Federal Circuit, “initial ownership of a patent vests in the inventor by operation of law, § 261 [35 U.S.C. § 261] provides that inventors can assign all or part of their interest in a patent.”60

B. A Co-Inventor to Even One Claim (or His Assignee) Has Joint Ownership of the Entire Patent Under U.S. patent law, a co-inventor of even one claim has undivided joint ownership of the entire patent. The U.S. Patent Statute defines co-inventors as follows: When an invention is made by two or more persons jointly, they shall apply for patent jointly and each make the required oath, except as otherwise provided in this title. Inventors may apply for a patent jointly even though (1) they did not physically work together or at the same time, (2) each did not make the same type or amount of contribution, or (3) each did not make a contribution to the subject matter of every claim of the patent.61

As explained by the Federal Circuit: We have held: “All that is required of a joint inventor is that he or she (1) contribute in some significant manner to the conception or reduction to practice of the invention, (2) make a contribution to the claimed invention that is not insignificant in quality, when that contribution is measured against the dimension of the full invention, and (3) do more than merely explain to the real inventors well-known concepts and/or the current state of the art.” Pannu v. Iolab Corp., 155 F.3d 1344, 1351 (Fed. Cir. 1998) (citations omitted). This interplay between inventorship and ownership creates the anomalous situation that a co-inventor of even a single claim can then assert a right of joint

59. Regents of the Univ. of N.M. v. Knight, 321 F.3d 1111, 1119 (Fed. Cir. 2003); Beech Aircraft Corp. v. Edo Corp., 990 F.2d 1237, 1248 (Fed. Cir. 1993) (ownership initially vests in the named inventors of the patent); 35 U.S.C.S. § 261 (2009). 60. Knight, 321 F.3d at 1119 (citation omitted). 61. 35 U.S.C.S. § 262, P 1 (2009).

Evaluations and Opinions Regarding Patent Ownership 657 ownership over an entire patent with multiple claims. See Fina Oil & Chem. Co. v. Ewen, 123 F.3d 1466, 1473 (Fed. Cir. 1997) (citations omitted) (“One need not alone conceive of the entire invention, for this would obviate the concept of joint inventorship.”); see also Ethicon, 135 F.3d at 1460 (“This rule presents the prospect that a co-inventor of only one claim might gain entitlement to ownership of a patent with dozens of claims”).62

C. A Co-Owner Has the Right to Fully Exploit the Patent Without Requiring Permission From (or Accounting to) the Other Co-Owners Section 262 of the Patent Statute provides: In the absence of any agreement to the contrary, each of the joint owners of a patent may make, use, offer to sell, or sell the patented invention within the United States, or import the patented invention into the United States, without the consent of and without accounting to the other owners.63

The Federal Circuit has explained the implications of Section 262 to a patent having split ownership as follows: [The] freedom [under Section 262] to exploit the patent without a duty to account to other co-owners also allows co-owners to freely license others to exploit the patent without the consent of other co-owners. Schering, 104 F.3d at 344 (“Each co-owner’s ownership rights carry with them the right to license others, a right that also does not require the consent of any other co-owner.”). Thus, the congressional policy expressed by section 262 is that patent co-owners are “at the mercy of each other.” Willingham v. Lawton, 555 F.2d 1340, 1344, 194 U.S.P.Q. (BNA) 249, 252 (6th Cir. 1977).64

The practical implications of Section 262 to a patent having split coownership is that the patent is virtually worthless commercially because neither party has the exclusivity, or the right to grant it, and exclusivity is the essence of patent rights. For example, where a patent has even one co-inventor, or co-owner, who is not obligated to assign his or her rights to a company that otherwise owns all rights in a patent, the company owning all other

62. Israel Bio-Engineering Project v. Amgen Inc., 475 F.3d 1256, 1263–1264 (Fed. Cir. 2007). 63. 35 U.S.C.S. § 262 (2009). 64. Ethicon, Inc. v. U.S. Surgical Corp., 135 F.3d 1456, 1468 (Fed. Cir. 1998) (emphasis added).


rights cannot enforce, license, or assign exclusivity under the patent because the non-assigning co-owner could assign the patent to any third party (including a competitor of the other co-owner or a licensee or assignee of the co-owner), or even dedicate the patent to the public to practice free of charge.

D. Claim Construction Is Always Required As discussed above, a first and necessary step in virtually all evaluations and opinions of patents is claim construction. Accordingly, claim construction is also a necessary first step in evaluating and opining on a patent’s ownership. This is true because patent ownership is determined by a patent’s inventorship, and inventorship is based on conception of claimed subject matter.65 Therefore, to determine inventorship of a patent, the claims must first be construed. Then inventorship is determined by evaluating whether a putative co-inventor contributed to the conception of the subject matter of at least one claim.66 As indicated by the Federal Circuit: [T]he inventorship analysis, like an infringement or invalidity analysis, first requires the construction of each disputed claim to determine the subject matter encompassed thereby. The second step is a comparison of the alleged contributions of each asserted co-inventor with the subject matter of the correctly construed claim to determine whether the correct inventors were named. Ethicon, 135 F.3d at 1460–61.67

E. Every Claim Must Be Addressed in Evaluations and Opinions of Ownership of Patents As discussed above, a co-inventor of even one claim of a U.S. patent owns an undivided share of the entire patent. Therefore, it is necessary to evaluate every claim of a patent for co-inventorship issues. Once it has been determined that a specific person co-invented at least one claim of a patent, it is not necessary to evaluate any additional claims regarding that person’s co-inventorship. However, each claim must be analyzed for potential co-inventorship issues to determine whether there are additional co-inventors. Further, in order to

65. Israel Bio-Engineering, 475 F.3d at 1263–64. 66. Id. 67. Gemstar-TV Guide Int’l, Inc. v. ITC, 383 F.3d 1352, 1381–82 (Fed. Cir. 2004) (some citations omitted).

Evaluations and Opinions Regarding Patent Ownership 659

conclude that there are no co-inventorship/co-ownership issues with a patent, it is necessary to evaluate the inventorship of every claim of a patent.

F. Potential Ownership Issues Typically, inventors who are company employees have obligations to assign their ownership rights to the company for inventions they make for the company. However, this should be confirmed in any evaluation or opinion on patent ownership by reviewing the inventor/employee’s agreements with his or her employer. Further, even in the absence of specific employment agreements requiring employee/inventors to assign their patent rights to their employers, most states have laws that address this issue. But-for specific issues of U.S. federal patent law, such as those discussed above (e.g., that initial patent ownership vests in inventors and that coinventors own an undivided share of an entire patent), other issues related to patent ownership are addressed by state law. An analysis of the patent ownership laws of the individual states of the U.S. is beyond the scope of this chapter. However, most U.S. states have laws that require inventors who make inventions while employed that are within the course and scope of their employment to assign some or all of the rights in any U.S. patent covering the invention to their employer. An example of a situation in which co-ownership issues may arise in a company’s patents is when an invention is made by employees of the company working in collaboration with employees of a third party. Should a U.S. patent issue on subject matter having co-inventors from the company and the third party, there might be co-ownership issues. Absent an agreement to the contrary, co-inventors employed by the third party might have an obligation to assign their rights in the patent to the third party. Thus, any company patents having inventors employed by third parties should be closely examined to be sure that the third party inventors have assigned—or have an obligation to assign—their rights in the patent to the company. A related example occurs when a company patent names only company inventors, but claims subject matter than may have been the result of collaborative work between the company and a third party, such as a university. Such patents should be evaluated to confirm that the inventorship is properly named on the patent and that no inventive contribution was made by any employees of a third party. Another related example involves a company employee who may also be employed by a third party, such as one who is also a professor at a university. Agreements between the company and the third party for such employees should be reviewed to confirm that the rights to any invention made by the employee are to be assigned only to the company and not to the third party. In the absence of such an agreement, all company-owned

660


patents naming inventors who are employed by a third party in addition to the company should be carefully evaluated to determine whether there may be any issues that might require an employee to assign his or her rights in the patent to a third party instead of the company.

G. Correcting Split Ownership of U.S. Patents Split ownership of company patents can be corrected by having a third party co-owner assign his or her rights in the patent to the company owning the other rights. In such circumstances, some form of compensation will likely be demanded by the third party co-owner. In this situation, the third party has leverage over the company seeking the rights because if the party does not assign its rights, the patent is virtually worthless commercially to the company seeking the rights (for the reasons discussed above). On the other hand, the company seeking the third party’s rights has leverage over the third party for the same reasons. If the rights to the patent remain divided in ownership, neither party owns full exclusionary rights in the patent and thus, neither party owns rights in the patent having any real commercial value.

H. Correction of Inventorship Errors When evaluating and opining on patent ownership, a company may discover that the named inventors on a company patent are incorrect. If they were not made with deceptive intent, U.S. patent law provides two means to correct such mistakes. Section 116 of the Patent Statute provides for the correction of named inventors while patent applications are pending with the U.S. Patent Office: Whenever through error a person is named in an application for patent as the inventor, or through error an inventor is not named in an application, and such error arose without any deceptive intention on his part, the Director may permit the application to be amended accordingly, under such terms as he prescribes.68

Section 256 of the U.S. Patent Statute allows for the correction of inventorship by U.S. courts in issued U.S. patents: Whenever through error a person is named in an issued patent as the inventor, or through error an inventor is not named in an issued patent and such error arose without any deceptive intention on his part, the Director may, on application of

68. 35 U.S.C.S. § 116, P 3 (2009); Stern v. Trustees of Columbia Univ., 434 F.3d 1375, 1377–78 (Fed. Cir. 2006); Eli Lilly & Co. v. Aradigm Corp., 376 F.3d 1352, 1358–59 (Fed. Cir. 2004).

Practice Points all the parties and assignees, with proof of the facts and such other requirements as may be imposed, issue a certificate correcting such error. The error of omitting inventors or naming persons who are not inventors shall not invalidate the patent in which such error occurred if it can be corrected as provided in this section. The court before which such matter is called in question may order correction of the patent on notice and hearing of all parties concerned and the Director shall issue a certificate accordingly.69

VII. Practice Points A. Patent Landscapes Are Flexible Patent landscapes are flexible and may be modified to reflect the nature of information sought from them. For example, a “complete” U.S. patent landscape of a technology, which is important and useful in strategic patenting, generally includes all of a company’s and third party issued and enforceable U.S. patents and pending U.S. patent applications in all aspects of a defined technology. Further, the technology is generally divided into technology covered by issued and enforceable U.S. patents (both of the owner and third parties), potentially patentable subject matter (including that claimed in pending U.S. patent applications), and unpatentable subject matter, such as that described by or obvious over the prior art. However, a patent landscape can also contain less information and be more focused on specific issues. For example, one may create a patent landscape showing a given technology and the relationship of a company’s patent rights to that technology. Similar patent landscapes could be created for third party patent rights to the same technology. In fact, patent landscapes can contain virtually any combinations of subject matter that one wishes to analyze in relation to each other.

B. As a General Rule, Never Produce a Document That Indicates (Either Expressly or by Implication) That a Company Believes, Has Reason to Believe, or Should Believe, That Its Technology Infringes a Claim of a Valid and Enforceable Third Party Patent When preparing patent landscapes and conducting strategic patenting, situations may arise in which one could inadvertently create documents that

69. 35 U.S.C.S. § 256 (2009); Shum v. Intel Corp., 499 F.3d 1272, 1277 (Fed. Cir. 2007) (“A correction for inventorship claim under section 256 creates a cause of action in federal courts that authorizes a district court to resolve inventorship disputes over issued patents.”).

661


show—or could be argued to show—that a company’s technology infringes one or more valid and enforceable claims of a third party patent. Accordingly, caution and vigilance must be used at all times when preparing documents in strategic patenting (such as patent landscapes) to avoid inadvertently creating documents that expressly or implicitly may show that a company believes, has reason to believe, or should believe that its technology infringes a valid and enforceable claim of a third party’s patent. Such documents should never be created or distributed, even confidentially.

C. Strategic Patenting Coordinates a Company’s Actual, Commercial, Technology with Its Patenting Strategy One of the most important aspects of strategic patenting is coordinating a company’s patenting with its actual, commercial technology, both current and future. For various reasons, a company’s patenting can become disassociated from its commercial activities. For example, when a company’s patenting team is ill-informed about its commercial developments, a company may own patents that claim patentable subject matter that does not cover the company’s commercial products or processes. Patents that do not cover a company’s commercial embodiments may be of limited value to the company, unless they affect a third party.

D. In Strategic Patenting, Patenting Issues Can Direct Commercial Development An example of successful strategic patenting involves a company’s patent counsel working with its research and marketing teams to direct its commercial development such that its commercial technology (both present and future) is covered by a strong patent portfolio. For example, patent landscapes can inform patent counsel of technologies in which a company may be able to obtain broad, pioneering patent protection and avoid potentially adverse third party patent rights. If that technology is in line with a company’s commercial goals, the company’s commercial development can be coordinated with patentable subject matter so that the company’s technology is well protected by broad patent rights. In addition to directing a company’s development into technologies offering strong patent protection, this can also include strategically designing a company’s commercial technology to avoid potential issues with third party patents. Design-around technology requires patent counsel working closely

Practice Points

with a company’s development teams. For example, successful design-around technologies require patent counsel to properly and thoroughly search for third party patents and potential patents (e.g., pending patent applications), then determine what technology is beyond infringement of third party claims, either literally or under the doctrine of equivalents. This information must then be successfully communicated to a company’s research and design teams so that the company can develop technology that is free from infringement of third party patents (and, ideally, is also covered by a strong company patent portfolio).

E. When Outside Patent Counsel Is Used, Outside Counsel Should Be Informed of a Company’s Commercial Development, Both Current and Future, So That Its Patenting May Best Match the Company’s Commercial Technology Companies that use outside counsel for patent preparation, prosecution, and maintenance must exercise care that counsel is aware of a company’s needs for patent protection. This is best done by keeping outside counsel informed and involved in a company’s development of its commercial technology. Further, companies can benefit by having outside patent counsel work with them in their commercial development efforts. For example, this allows patent issues to inform commercial development issues (as discussed above) and helps patent counsel obtain patents with claims that best cover a company’s commercial technology.

F. Companies and Patent Counsel Should Avoid Blindly Patenting Anything Patentable When a company’s patenting activities are not well coordinated with its current and future commercial development, it may obtain patents simply because subject matter is patentable without regard to how it relates to the company’s actual technology. This can result in a company having a patent portfolio that does not protect—or only weakly protects—its actual commercial technology. To avoid this, companies should routinely evaluate their patenting strategies (including the scope of claims in pending applications and issued patents) for coordination with its commercial technology, both present and future. Of course, if patent counsel is working with a company’s development teams in strategic patenting, this should not be an issue, as all decisions in research and development and patenting should be made together and in light of each other.

663

664


G. Be Aware of Patent Applications and Patents Covering Early Stages of a Company’s Technology One of the most common causes of patents and patent applications not covering a company’s actual commercial technology is when a patent application is prepared in the early stages of development of a company’s technology. As it is not unusual for a company’s technology to grow and change from its early phases to its commercial embodiments, it is also not unusual for patent applications written to cover early stages of a company’s technology to not cover the actual commercial technology. Thus, patents and pending applications based on early technologies should be given particular scrutiny (e.g., in patent landscapes) to be sure they cover the company’s actual technology. Applications and patents that do not cover a company’s commercial technology should be evaluated for the potential of licensing or sale if they cover a third party’s technology, or for abandonment or nonpayment of maintenance fees if they have no exclusionary or other value.

H. A Company’s Patent Portfolio Should Be Evaluated for Scope, Validity, Enforceability, and Ownership, and Errors Corrected Where Possible Another aspect of strategic patenting is evaluating one’s own patents for claim scope by performing claim scope/infringement evaluations and opinions and evaluations and opinions on patent validity, enforceability, and ownership. Such analyses may detect important deficiencies or errors in patents or applications that may be correctable. Certain errors in issued patents may be corrected by reissue proceedings. The discovery of new documentary prior art issues may be addressed in reexamination proceedings. In certain limited situations, enforceability issues may also be corrected. For example, unenforceability related to inequitable conduct may be correctable if caught and corrected before issuance of a patent. In addition, unenforceability due to patent misuse may be correctable. Finally, errors in naming inventors may be corrected if there was no deceptive intent in their original naming.

CHAP T ER

19 Evaluating and Opining on One’s Own Patent Rights Defensive Due Diligence, Pre-Sale and Pre-Licensing Evaluations and Opinions of Patents

I. Overview of Defensive Due Diligence II. Initial Steps in Defensive Due Diligence: Audit of U.S. Patent Rights A. Timing of Patent Audits

668 670 670

1. Patent Rights Inventory

670

2. Patent Valuation

673

III. Clearance (Freedom to Operate), Infringement, Validity, and Enforceability Evaluations and Opinions for Defensive Due Diligence

674

A. Patent Clearance (Freedom to Operate) Evaluations and Opinions

675

1. Identification of Potential Purchasers of Patent Rights

675

2. Applications to Potential Representations and Warranties of Noninfringement

676

B. Patent Infringement Evaluations and Opinions

677


677

C. Evaluations and Opinions of Patent Validity

677

D. Evaluations and Opinions of Patent Enforceability

678

E. Evaluations and Opinions of Patent Ownership

679


679

2. Identification of Errors in Named Inventors

680

3. Complying with Representations and Warranties on Patent Ownership

680

665

666

Chapter 19 Evaluating and Opining on One’s Own Patent Rights IV. Curing Potential Issues of Unenforceability

680

A. Curing Unenforceability Due to Inequitable Conduct in Procuring a U.S. Patent

681

B. Curing Unenforceability Due to Misuse of an Issued U.S. Patent

683

V. Correcting Errors and Potential Invalidity in Issued Patents

684

A. Reissue

684

B. Reexamination

686

C. Correcting Inventorship

688

VI. Risk of Declaratory Judgment for Licensing Overtures

689

VII. Avoiding Waiver of Attorney-Client Privilege and Work Product Immunity of Patent Opinions in Due Diligence

691

A. Overview: Exercise Due Care with Attorney-Client Privilege and Work Product Immunity in Due Diligence

692

B. Choice of Law for Waiver in Patent Due Diligence

693

C. Disclosure of a Privileged Opinion to a Third Party May Result in Waiver of the Attorney-Client Privilege and Work Product Immunity of the Opinion

694

D. Disclosure of a Privileged Opinion to a Third Party May Waive All Privileges Associated with the Opinion, Even If the Disclosure Is Confidential and Under a Confidentiality Agreement

695

E. The Common Interest Doctrine

697

F. Other Considerations When Disclosing Privileged Materials to Third Parties During Due Diligence

699

1. Confidentiality Agreement

700

2. Joint Defense Agreement

700

3. Timing of Disclosure

700

4. To Whom the Disclosure Is Made

701

5. Plan on Waiver

701


702

A. Refer to Chapters 18 and 12 for More Detailed Discussion

702

B. Defensive Due Diligence Should Be Proactive

702

C. Defensive Due Diligence Should Be Performed in All Situations

702

D. Defensive Due Diligence Should Work with Strategic Patenting, Including the Use of Patent Landscapes

703

Evaluating and Opining on One’s Own Patent Rights E. Use Defensive Due Diligence, Strategic Patenting, and Patent Landscapes to Identify Interested Buyers and Licensees

703

F. Be Sure to Account for Licenses and Other Grants to Third Parties

704

G. Companies Should Carefully Evaluate Which Patent Rights Should Be Sold or Licensed

704

H. As a General Rule, Never Produce a Document That Indicates, Either Expressly or by Implication, That a Company Believes, Has Reason to Believe, or Should Believe That Its Technology Infringes a Claim of a Valid and Enforceable Third Party Patent

705

I. Evaluate Patent Portfolios, Including Pending Patent Applications, for Potential Issues with Validity, Enforceability, and Inventorship (Ownership), and Make Corrections Where Necessary and When Allowed

705

J. Play Close Attention to Patent Inventorship, Which Initially Determines Ownership

705

K. Use Defensive Due Diligence to Comply with Representations and Warranties in Sale and Licensing of Patent Rights

706

L. Use Caution in Licensing Overtures to Avoid Declaratory Judgment Actions

706

M. Use Caution to Avoid Waiving Attorney-Client Privilege and Work Product Immunity of Patent Opinions

706

667


Usage Note: Other chapters of this treatise that relate to this one include Chapter 2 (claim construction), Chapters 3–5 (infringement), Chapters 6–9 (validity), Chapter 10 (enforceability), Chapter 11 (patent due diligence for third party patents), Chapter 12 (clearance (freedom to operate), noninfringement, and invalidity evaluations and opinions of third party patents), Chapter 17 (patentability determinations), Chapter 18 (strategic patenting, patent landscapes, evaluations and opinions of claim scope/infringement, validity, enforceability, and ownership), and Chapter 21 (post-grant corrections of patents). Therefore, the reader of this chapter is referred to these chapters for further information on these specific issues.

I. Overview of Defensive Due Diligence An informed seller is virtually always better positioned in a deal than is an uninformed one. This is certainly the case with sellers and licensors of U.S. patent rights. Defensive due diligence is the process by which sellers or licensors of patent rights become fully informed of their patent rights as well as the relevant marketplace for selling or licensing those rights. Defensive due diligence is proactive; therefore, it is best conducted prior to a company making any overtures toward selling or licensing its patent rights. Generally, defensive due diligence first involves a company taking stock of its patent rights through a comprehensive patent audit. This audit defines a company’s patent portfolio, which can include issued U.S. patents,1 pending U.S. patent applications, and other evidence of invention (such as invention disclosures). Next, the U.S. patent rights in the portfolio2 are analyzed for scope, as well as for strengths and weaknesses via evaluations and opinions of patent scope, validity, enforceability, and ownership. Defensive due diligence may also include clearance (freedom to operate) evaluations and opinions of the ability to practice the technology of the company’s patent rights relative to third party patents. As explained in detail in Chapter 18, the process of evaluating and opining on a company’s U.S. patent portfolio defines a patent landscape. As also

1. A company’s patent portfolio may contain both U.S. and non-U.S. patents and patent applications. In keeping with the scope of this treatise, this chapter addresses only U.S. patent rights, and only U.S. patent law. Therefore, this chapter is not applicable to (and should not be relied upon regarding) any non-U.S. patent rights. Any evaluations and opinions of non-U.S. patents should be performed by competent patent counsel in the countries of the patents. Further, U.S. counsel not licensed in other countries should not evaluate or opine on any non-U.S. patent rights or issues related thereto. 2. Id.

Overview of Defensive Due Diligence

discussed in Chapter 18, patent landscapes show U.S. patent rights of the company and third parties in a specific technology field, which is typically the commercially important technology of the company’s patent rights. In showing the patent rights of the company and third parties, patent landscapes identify aspects of the technology over which the company has significant exclusionary patent rights as well as technologies patented by third parties. This may include the identification of specific company patents that may adversely affect (e.g., block) the ability of third parties to practice aspects of the technology, as well as the identification of specific third party patents that may adversely affect (e.g., block) the ability of company to practice aspects of the technology. Patent landscapes may also show the scope, strengths, and weaknesses of a company’s U.S. patents and other important information such as expiration dates of patents. Evaluation of a company’s U.S. patent rights and those of third parties in the technology relevant to the company’s patents (i.e., creating a patent landscape) has the additional benefit of identifying third parties that might be especially interested in purchasing or licensing a company’s patent rights. For example, patent landscapes may identify third parties that are blocked in the exploitation of their commercial technology by company patents. If these company-owned patents cover aspects of technology of limited value to the company, they may be sold or licensed to third parties identified as having particular interest in the patents. Another important aspect of defensive due diligence is the identification of issues in a company’s U.S. patent portfolio that potentially could affect the validity or enforceability of certain of its U.S. patents. It is important to identify any of these issues prior to offering patent rights for sale or license, for example, in case representations and warranties to a buyer or licensee are required on any of these issues. Additionally, certain of these issues may be corrected prior to selling or licensing patent rights. Thus, prior to offering patent rights for sale or license, a patent owner should evaluate its U.S. patent portfolio for (and potentially correct): (a) certain errors in issued patents that may be correctable in reissue proceedings; (b) certain prior art-based validity issues that may be correctable in reexamination proceedings; (c) certain issues that could potentially affect a patent’s enforceability or the enforceability of a patent issuing from a patent application that may be correctable; and (d) certain errors in naming inventors in patent applications and issued patents that may be correctable. Defensive due diligence also works to minimize the risk that a company’s patent licensing overtures to third parties could potentially create declaratory judgment jurisdiction for the potential licensee to sue the patent owner alleging noninfringement, invalidity, and unenforceability of the patent sought to be licensed.

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II. Initial Steps in Defensive Due Diligence: Audit of U.S. Patent Rights Generally, the first step in defensive due diligence involves a company taking stock of its patent rights through a comprehensive patent audit. A U.S. patent audit defines a company’s U.S. patent portfolio,3 which can include issued patents, pending patent applications, and other evidence of invention (such as invention disclosures).

A. Timing of Patent Audits In general, defensive due diligence is proactive; therefore, if possible, all aspects of defensive due diligence should be completed before a company makes even a first overture toward selling or licensing its patent rights. Further, even companies that have no plans to sell or license their patent rights still routinely conduct defensive due diligence, which is closely tied to strategic patenting as discussed in Chapter 18, and keep the results up-to-date at all times. Doing so allows a company to be prepared at all times for unsolicited offers to buy the company or its patent rights. Moreover, the results of defensive due diligence (including patent audits and patent landscapes) are useful for other purposes, such as strategic patenting (discussed in detail in Chapter 18) and for complying with U.S. securities laws and regulations (as discussed in detail in Chapter 16). Indeed, defensive due diligence is so important to patent owners that even if a patentee has not initiated defensive due diligence prior to commencement of negotiations to sell or license its patent rights, the patentee should begin defensive due diligence as soon as possible after commencement of negotiations. As a rule, the more a company knows about its own patent rights—and those of others—the better a company is able to take full advantage of transactions regarding its patent rights. 1. Patent Rights Inventory The first step in a patent audit is to identify all of a company’s U.S. patent rights. As mentioned above, these include currently enforceable rights claimed in issued and enforceable U.S. patents as well as pre-issued patent rights, such as those embodied in pending patent applications, invention disclosures, and other evidence of invention (such as laboratory notebooks).4

3. Id. 4. A comprehensive patent audit as performed for strategic patenting (as discussed in Chapter 18), to comply with U.S. securities laws and regulations (as discussed in Chapter 16), or as part

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A patent rights inventory and patent audit for defensive due diligence must also report and describe all issues that may affect the company’s ability to fully and freely assign or license its patent rights to third parties and other issues that may affect the validity, enforceability, or ownership of the patent rights. These include (but are not limited to): (a) past, present, or threatened challenges to the validity, enforceability, or inventorship of patent rights; (b) issues that might affect the ownership of patent rights; (c) whether maintenance fees have been paid on issued patents; and (d) whether there are prior licenses, security interests held by third parties, or other third party rights that may affect any of a company’s patent rights. These investigations are generally required before selling or licensing a company’s patent rights at least because many patent assignments and licenses require the seller or licensor to warrant and represent to the buyer or licensee: (a) that the company owns all rights in the subject patents; (b) that the company has full power to transfer or grant the rights free from any third party claims; (c) that the patents are valid and enforceable; and (d) that there are no past, present, or threatened challenges to the validity, enforceability, or inventorship (or ownership) of the patents. Further, patent assignments and licenses may require the seller or licensor to indemnify the buyer or licensee for any losses related to a breach of the seller or licensor’s representations and warranties. Therefore, these issues must be thoroughly evaluated with extreme care and diligence. Rights in issued U.S. patents are usually the easiest patent assets to identify. However, when evaluating these rights, it is important to note the following: (a) the terms of the patents, including anything that may shorten the terms (such as terminal disclaimers) or extend them (such as patent term extensions and patent term restorations); (b) whether maintenance fees have been timely and correctly paid5 on the issued patents; and (c) whether there are any circumstances that may adversely affect the validity or enforceability of the patent. These may include, but are not limited to, potential errors in a patent; potential errors in named inventorship; potential issues of unenforceability; adverse holdings in current or past patent litigation, interferences, reissues, or reexaminations; or the discovery of potentially invalidating prior art. As indicated above, a patent audit for purposes of defensive due diligence must account for all patent rights that have already been licensed by the

of a bankruptcy case (as discussed in Chapter 22) generally also includes patent rights licensed by the company from third parties. An audit of licensed third party patent rights may not be essential for purposes of defensive due diligence alone. However, it is at least important in patent audits for defensive due diligence to account for company patent rights that have been licensed to third parties as this affects the ability of the company to further license or sell the licensed patent rights. 5. For example, if maintenance fees were paid as a small entity, is the patent owner in fact a small entity under the U.S. Patent Office’s definition of one?


company to third parties. This is essential because licenses may affect the ability of a company to further license or sell rights to the licensed patents. Patent licenses to third parties should be investigated and characterized by the nature of the license. For example, these questions should be posed: What rights are licensed? Is the license “exclusive?” If so, to what extent has exclusivity been granted? Is the exclusivity complete, partial, field-, or region-specific? Is the license assignable? Does the license have a term? Have the obligations of both parties to the license been performed? Another important issue to examine in a patent audit for defensive due diligence is the inventorship and ownership of U.S. patent rights. As discussed in detail in Chapter 18, the inventorship of a U.S. patent determines the ownership of the patent. Inventors, including co-inventors, are presumed to co-own patents if they have contributed to the claimed invention of even one claim unless they have assigned their ownership interest in writing to another party.6 Typically, inventors who are company employees have obligations to assign these rights to the company for inventions that they make for the company. However, this issue requires investigation and confirmation when performing patent audits for defensive due diligence. The importance of inventorship and ownership of U.S. patents becomes apparent by the fact that under U.S. law, a co-inventor owns an undivided share of an entire patent for which she is a co-inventor. Further, under U.S. patent law, the amount of inventive contribution by a co-inventor to a patent does not affect the amount of the ownership rights the co-inventor obtains in a patent. Thus, for example, a co-inventor who contributes to the invention of only one claim of a patent obtains full rights to the entire patent, which is exactly the same ownership that a co-inventor who contributes to the invention of every claim of a patent would obtain.7 Still further, absent an agreement to the contrary, each co-inventor of a U.S. patent has full rights to license, assign, and otherwise exploit the entire patent without any duty to seek permission from or account to the other co-inventors.8 One example of a situation in which co-inventorship or co-ownership problems can arise is where an invention was made by employees of the company conducting the audit (“company A”) working in collaboration with employees of a different company (“company B”). In such an event, the coinventors who are not associated with the auditing company likely do not have an obligation to assign their patent rights to that company. (In fact, they

6. Beech Aircraft Corp. v. Edo Corp., 990 F.2d 1237, 1248 (Fed. Cir. 1993) (ownership initially vests in the named inventors of the patent); Regents of the Univ. of N.M. v. Knight, 321 F.3d 1111, 1119 (Fed. Cir. 2003) (“initial ownership of a patent vests in the inventor by operation of law, § 261 [35 U.S.C. § 261] provides that inventors can assign all or part of their interest in a patent.”) (citation omitted); 35 U.S.C.S. § 261 (2009). 7. 35 U.S.C.S. § 262 (2009). 8. Id.

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likely have an obligation to assign their patent rights to company B that employed them during the invention of the patent.) In such a case, the subject patent is likely co-owned by both companies, with each company having full rights to assign, license, or otherwise exploit the patent without accounting to the other company. Therefore, the existence of even one co-inventor on a company’s patent who is not under an obligation to assign his or her rights to the company can effectively destroy all commercial value in that patent. This is because a company loses all rights of exclusivity to a patent when even one co-inventor does not assign his or her interest in the patent to the company. If, in such a case, the company attempts to assign or license to a third party its rights to the patent, the co-inventor who is not under an obligation to assign his or her rights to the company may assign or license the patent to a different third party under any terms the person desires. For example, non-assigning coinventors could license or assign their rights in the patent to a company that is a competitor of a company seeking to buy or license patent rights from the auditing company. In fact, a non-assigning inventor could even dedicate the use of the patent to the public free of charge. Therefore, it is of utmost importance that U.S. patent audits in defensive due diligence investigate fully the inventorship and ownership of all U.S. patent rights. Further, a patent audit should determine whether all ownership rights to the company’s patents (including written assignments from the inventors to the company) have been properly recorded with the U.S. Patent Office. In order to have the effect of constructive notice against third parties, patent assignments must be recorded with the U.S. Patent and Trademark Office.9 Further still, those performing patent audits for defensive due diligence should investigate and report whether the company has granted security interests or other liens on its patent rights to any third parties. This includes determining the nature of any security interest or lien, as well as whether it has been properly perfected under applicable UCC requirements (as discussed in Chapter 22) and properly recorded with the U.S. Patent and Trademark Office (also discussed in Chapter 22). 2. Patent Valuation After a complete inventory of a company’s U.S. patent rights has been taken, the next step in a patent audit for defensive due diligence is typically to place a value on the company’s patent rights. This specialized and detailed topic is beyond the scope of this treatise. Competent accounting experts should be consulted for valuations of U.S. patent rights.

9. 35 U.S.C.S. § 261 (2009).

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However, as discussed below and in Chapter 18, evaluations and opinions by patent counsel of a company’s patent rights can greatly assist in the valuation of the patent rights. The valuation of a company’s U.S. patent rights may be heavily influenced by how the company’s patent rights fall within the patent landscape of the company’s technology. Important issues include whether the rights may be practiced free of infringing third party patents, whether the rights may be infringed by third party activities, and whether the rights are valid and enforceable. Evaluations and opinions of patent clearance (freedom to operate), infringement, validity, and enforceability are discussed below. Further, as discussed below and in detail in Chapter 18, the information from patent landscapes created by patent audits and evaluations and opinions of patent clearance (freedom to operate), infringement, validity, and enforceability can be used to identify third parties who may be particularly interested in purchasing or licensing certain patent rights. This information can also heavily influence the valuation of a company’s patent rights. For example, if a company can identify a third party that is blocked by a company’s patent— and the company is willing to assign or license the patent, the identification of the blocked third party can greatly enhance the value of the blocking patent. The blocked company may be greatly interested in purchasing or licensing the rights so that it may practice its technology free of the blocking patent. Further, comprehensive patent landscapes often identify multiple third parties that may be interested in acquiring a company’s patent or patents. For example, a patent landscape may show that one or more company patents block several competing third parties. If the company is willing to assign or license the patents, a bidding war could result among the competing third parties for exclusive rights to the company’s blocking patents. Such situations can greatly enhance the value of a company’s patent portfolio.

III. Clearance (Freedom to Operate), Infringement, Validity, and Enforceability Evaluations and Opinions for Defensive Due Diligence Defensive due diligence, including the valuation of a company’s patent rights and the identification of potential purchasers or licensees, is typically heavily influenced by how the company’s patent rights fall within the patent landscape of the company’s technology. This includes whether the rights may be practiced free of infringing third party patents, whether the rights may be infringed by third party activities, and whether the rights are valid and enforceable. Evaluations and opinions of patent clearance (freedom to operate), infringement, validity, and enforceability of a company’s patent rights are addressed in detail in Chapters 12 and 18, but are also addressed briefly

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below. (The reader is referred to Chapters 12 and 18 for further details on these topics.)

A. Patent Clearance (Freedom to Operate) Evaluations and Opinions As discussed in detail in Chapters 12 and 18, patent clearance (freedom to operate)10 evaluations and opinions are performed when evaluating a company’s patent portfolio for purposes of determining the scope in which a company’s patented technology may be practiced free of infringing third party patents. Clearance evaluations and opinions identify important third party patents that may affect (e.g., block) the company’s ability to practice its patented technology. As such, they provide important insight into the patent landscape of the company’s patented technology as it relates to the patent rights of others. Important third party patents are then evaluated for issues such as noninfringement, invalidity, unenforceability, purchase, licensing, or design-around.11 This information is important in determining the value of a company’s patent portfolio prior to entering into negotiations for sale or licensing. For example, generally the broader the scope in which the company’s patented subject matter may be practiced free from infringement of third party patents, the greater the value of the company’s patent rights. 1. Identification of Potential Purchasers of Patent Rights Patent clearance evaluations and opinions are also important in defensive due diligence because they typically identify third parties who may be particularly interested in acquiring parts of a company’s patent portfolio to expand their

10. As discussed in Chapters 12 and 18, it is preferable to refer to these evaluations and opinions as clearance evaluations and opinions rather than freedom to operate. This is because welldrafted clearance evaluations and opinions are restricted and limited by expressly defined facts and presumptions. Therefore, they represent clearance of third party patents in expressly defined circumstances. Use of the term freedom to operate may communicate a broader evaluation and opinion, perhaps even conveying that the evaluation and opinion assures complete freedom to operate against all third party patents, which, in fact, can never be the case. 11. Importantly, no document should be created, even confidentially, showing or describing the relationship of a company’s technology to third party patent rights that admits—or could be argued to show—that the company knew, had reason to know, or should have known that its technology infringed a valid and enforceable claim of a third party patent. These limitations must be considered prior to preparing any documents representing the relationship of a company’s technology to third party patent rights.

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patent portfolio in the patent landscape. For example, when a third party is identified in a patent clearance evaluation or opinion as having potentially blocking patents12 to the practice of the technology of certain patents of the selling or licensing company, that party may be particularly interested in acquiring the company’s potentially blocked patents13 to expand its patent portfolio in the common subject matter. If the patent-owning company is interested in selling or licensing its rights in this technology (e.g., because the company does not commercially practice that technology), it may be able to obtain particularly favorable sale or licensing terms from the interested third party. Moreover, when third parties are identified in clearance evaluations or opinions as having patents that may affect a company’s ability to practice certain aspects of its patented technology, it is also likely that one or more of the company’s patents may be determined in infringement evaluations and opinions (discussed below) to block the same third parties from practicing their patented technology. In such cases, these parties may be especially eager to purchase the company’s patents to remove blocking patents from their technology. Still further, when multiple third parties are identified as being potentially blocked by a company’s patents, they may each be interested in purchasing these patent rights. Thus, several potentially blocked third parties may engage in competitive bidding to obtain the rights to practice the potentially blocked technology—and to exclude others from doing so. This may significantly increase the value of these patent rights. 2. Applications to Potential Representations and Warranties of Noninfringement In certain situations, assignees or licensees may demand representations and warranties by the assignor or licensor that practice of the technology of the assigned or licensed patents will not infringe third party patents. Generally, such representations and warrantees should be avoided on the part of the assignor or licensor because (as discussed in Chapters 12 and 18) it is not practically possible to determine with certainty that the practice of a given technology will not infringe any third party patents. However, if such representations and warranties are provided, they should be limited, for example as follows: “To the knowledge of the assignor or licensor at the time of the agreement, the practice of the technology of the assigned or licensed patents does not infringe any third party patents.” Where such representations and warrantees are made, they should be based on the results of comprehensive clearance evaluations and opinions that show no infringement of any third

12. Id. 13. Id.


party patents by the practice of the technology of the assigned or licensed patents.

B. Patent Infringement Evaluations and Opinions As discussed in detail in Chapter 18, patent infringement evaluations and opinions conducted for a company’s patents are another tool in defensive due diligence in determining the value of a company’s patent portfolio. They also may identify potential assignees or licensees of a company’s patent rights. These evaluations and opinions search for—and evaluate—third party technologies that, when practiced, may infringe patents owned by a company. 1. Identification of Potential Purchasers of Patent Rights Infringement evaluations and opinions are of particular importance in evaluating a company’s patent portfolio because they may identify specific companies that may potentially be blocked from practicing their technology by the company’s patents. Thus, these companies might be especially interested in purchasing or licensing the company’s patent rights to remove potentially blocking patents and to expand their patent portfolio’s size and strength within the relevant patent landscape, including obtaining the ability potentially to block others. If the patent-owning company is willing to assign or license these patent rights, the company may significantly enhance its return by approaching the specific companies identified in the infringement evaluations and opinions as being potentially blocked by the company’s patents. Further, a thorough patent infringement evaluation and opinion (as discussed in Chapter 18) may map the patent landscape to the extent that more than one competing third party company is identified as being potentially blocked by one or more of a company’s patents. In such a case, a bidding competition between two or more competing companies seeking to obtain the blocking rights of the patents of the company may increase the value of the company’s patent assets.

C. Evaluations and Opinions of Patent Validity As discussed in detail in Chapter 18, evaluations or opinions of the validity of a company’s patents may affect the value of the patents either positively (if it appears that the patents are valid), or negatively (if it appears that there may be invalidity issues with the patents). Accordingly, such evaluations and opinions performed on a company’s patent portfolio in defensive due diligence may assist in the valuation of the company’s patent assets.


Additionally (as discussed in Section V below), under certain limited circumstances, some issues potentially affecting the validity of a U.S. patent can be corrected in post-issuance proceedings (i.e., reexamination and reissue proceedings). Therefore, evaluations and opinions of patent validity in defensive due diligence are also important for their potential to identify issues of possible invalidity that may be “cured” prior to offering to assign or license a patent. Of course, a patent free from potential invalidity issues should be of greater value in assignments and licensing than one having potential issues with validity. Additionally, if time constraints do not allow correction of potential invalidity issues prior to sale or licensing of a patent, noting the potential to correct the issues to potential buyers or licensees of that patent might increase the value of those patent in an assignment or license. Further, evaluations and opinions of patent validity may be required in defensive due diligence in situations where, as discussed above, assignees or licensees require representations and warranties from the seller or licensor that the assigned or licensed patents are believed to be valid at the time of the agreement.

D. Evaluations and Opinions of Patent Enforceability As discussed in detail in Chapter 18, evaluations and opinions of the enforceability of a company’s patents may affect their value in their sale or licensing. Patents that are apparently free of issues of enforceability should have greater value than those having potential issues with enforceability. Therefore, evaluations of enforceability should be conducted in defensive due diligence. As discussed in Section IV below, under certain limited circumstances, enforceability issues may be “cured.”14 Therefore, evaluations and opinions of patent enforceability in defensive due diligence are also important for their potential to identify issues of possible unenforceability that may be “cured” prior to offering to assign or license a patent. Additionally, in the event that time constraints do not allow curing of patent unenforceability issues prior to sale of a patent or pending patent application, noting the potential to cure enforceability issues to potential buyers or licensees of the patent rights might increase the value of those patent rights in an assignment or license.

14. See Chapters 10 and 18; Rohm & Haas Co. v. Crystal Chemical Co., 722 F.2d 1556, 1571–72 (Fed. Cir. 1983) (in certain limited circumstances it may be possible to “cure” inequitable conduct during prosecution of the same application in which the inequitable conduct occurred); B. Braun Med., Inc., v. Abbott Labs., 124 F.3d 1419, 1427 (Fed. Cir. 1997) (patents are “unenforceable until the misuse is purged.”); C.R. Bard. Inc. v. M3 Sys., Inc., 157 F.3d 1340, 1372 (Fed. Cir. 1998) (“Patent misuse arises in equity, and a holding of misuse renders the patent unenforceable until the misuse is purged; it does not, of itself, invalidate the patent.”); Qualcomm Inc. v. Broadcom Corp., 548 F.3d 1004, 1025 (Fed. Cir. 2008) (“[P]atent misuse does not render a patent unenforceable for all time.”).


Further, evaluations and opinions of patent enforceability may be required in defensive due diligence in situations where, as discussed above, assignees or licensees require representations and warranties from the seller or licensor that the assigned or licensed patents are believed to free from enforceability issues at the time of the agreement.

E. Evaluations and Opinions of Patent Ownership As discussed above and in more detail in Chapter 18, the ownership of a company’s patents is extremely important in determining the value of its patents. Where there is a co-inventor on a U.S. patent who is not under an obligation to assign his or her patent rights to a company that otherwise owns all other rights in the patent, the commercial value of the patent is virtually eliminated.15 Unless the company can obtain the unassigned rights, the non-assigning co-inventor has full, undivided, rights to the patent and can freely assign or license the patent to any party. The non-assigning co-inventor can even dedicate the patent to the public to be used free of charge. Therefore, it is very important that in defensive due diligence a company’s patent portfolio be evaluated carefully for any issues concerning potential coinventors not obligated to assign their patent rights to the company. If any such issues are noted, it may be of value to the company to attempt to obtain the non-assigned co-inventor’s rights prior to attempting to assign or license the patent. 1. Identification of Potential Purchasers of Patent Rights If it is determined in defensive due diligence that a company’s patent has a co-owner who is not obligated to assign his or her rights in the patent to the company, the company may attempt to sell its rights in the patent to the nonassigning co-owner. In fact, the non-assigning co-owner faces the same problems as does the company with the commercial value of the patent being virtually eliminated due to split ownership. Therefore, the non-assigning coowner might be interested in purchasing the company’s co-ownership rights in the patent so that the non-assigning co-owner can obtain full ownership of the patent—and thus, full control of the patent. Additionally, if the patent is a blocking patent to other companies in a competitive patent landscape, it may also be that competitors of the nonassigning owner of the patent may desire to purchase the company’s coownership in the patent so that no company can enforce the patent against them. Indeed, in such a case, a bidding war may even emerge among competitors and the co-owner for the company’s co-ownership rights.

15. E.g., Ethicon, Inc. v. U.S. Surgical Corp., 135 F.3d 1456, 1467 (Fed. Cir. 1998).


The above example of competing companies bidding to purchase a coowned patent provides a good illustration of the importance of conducting defensive due diligence prior to offering patent rights for sale or licensing. Doing so should help identify companies in the patent landscape that may be especially interested in purchasing or licensing a company’s patent rights, and thus should increase the value of these rights. 2. Identification of Errors in Named Inventors Because, as discussed above, ownership of U.S. patents is originally based on inventorship, defensive due diligence investigations of patent ownership may result in an error being detected in the named inventors of a company’s patent. As discussed in Section V below, when an error in inventorship is made without deceptive intent, the inventorship can be corrected. Therefore, defensive due diligence evaluations and opinions of ownership may allow a company to correct errors in inventorship before its patents are offered for sale or licensing. 3. Complying with Representations and Warranties on Patent Ownership Evaluations and opinions of patent ownership are frequently required in defensive due diligence because patent assignments and licenses frequently include representations and warranties by the assignor or licensor that it has full ownership rights to the assigned or licensed patent and, in the case of assignments, that the ownership is freely transferable. Further, assignments and licenses may also contain indemnification clauses whereby the assignor or licensor agrees to indemnify the assignee or licensee for any losses due to problems with a patent’s ownership. Therefore, determining the proper ownership of a company’s patent rights is extremely important in defensive due diligence.

IV. Curing Potential Issues of Unenforceability When those conducting defensive due diligence discover a potential issue of patent unenforceability, the patentee may “cure” the unenforceability if certain conditions are met. Therefore, when potential issues of unenforceability are revealed, corrective measures should be considered before offering a potentially unenforceable patent for sale or licensing. Moreover, in the event that it appears an issue of potential unenforceability can be cured, but there is insufficient time for the patent owner to do so prior to assigning or licensing a patent, the patentee should consider disclosing the potential issue and the

Curing Potential Issues of Unenforceability

potential cure to the purchaser or licensee. Disclosure of this information prior to an assignment or license may increase the likelihood of completing the transaction and/or the value of the patent rights, and may satisfy representations and warranties regarding enforceability of the subject patents. Unenforceability of a U.S. patent may be cured in different ways, depending on the nature of the conduct that led to the unenforceability. In the case of inequitable conduct before the U.S. Patent Office in the procurement of a U.S. patent, such conduct may be cured if certain acts are taken during the prosecution of the application (or a related priority application) in which the inequitable conduct occurred and before a patent issues. In the case of unenforceability due to misuse of an issued patent, the unenforceability may be cured by addressing the acts that led to the unenforceability.

A. Curing Unenforceability Due to Inequitable Conduct in Procuring a U.S. Patent Inequitable conduct (fraud) in the prosecution of a U.S. patent application can be cured if during the application (or a related priority application) in which the fraud occurred, the applicant: (a) expressly advises the Patent Office of the existence of a prior misrepresentation, including stating specifically wherein it was made; (b) advises the Patent Office of the actual facts; (c) indicates that further examination may be necessary; and (d) establishes that the subject matter is patentable in view of the actual facts.16 The Federal Circuit explained this as follows: Specifically, the narrow issue we now deal with is whether voluntary efforts during prosecution by or on behalf of an applicant, knowing that misrepresentations have been made to the examiner of his application, can ever alleviate its effect. Taking into account human frailty and all of the objectives of the patent system, we think it desirable to permit misdeeds to be overcome under certain limited circumstances. The first requirement to be met by an applicant, aware of misrepresentation in the prosecution of his application and desiring to overcome it, is that he expressly advise the PTO of its existence, stating specifically wherein it resides. The second requirement is that, if the misrepresentation is of one or more facts, the PTO be advised what the actual facts are, the applicant making it clear that further examination in light thereof may be required if any PTO action has been based on the misrepresentation. Finally, on the basis of the new and factually accurate record, the applicant must establish patentability of the claimed subject matter. Considering the overall objectives of the patent system, we think

16. Rohm, 722 F.2d at 1571–72.

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682 Chapter 19 Evaluating and Opining on One’s Own Patent Rights it desirable that inventions meeting the statutory requirements for patentability be patented and, therefore, we also think it desirable to reserve the possibility of expiation of wrongdoing where an applicant chooses to take the necessary action on his own initiative and to take it openly.17

However, the court cautioned: It does not suffice that one knowing of misrepresentations in an application or in its prosecution merely supplies the examiner with accurate facts without calling his attention to the untrue or misleading assertions sought to be overcome, leaving him to formulate his own conclusions.18

However, once a patent issues having inequitable conduct in its prosecution history, the inequitable conduct may not be cured by a post-issuance reissue proceeding. The Federal Circuit has been careful to draw a distinction between curing fraud before an application issues as a U.S. patent (i.e., curing fraud in the same application or series of co-pending priority applications in which the fraud originally occurred, such that the fraud is cured before any patent issues), and curing fraud after a patent issues. As stated by the Federal Circuit: [W]e wish to focus as sharply as possible on the exact issue before us. In this case . . . [t]he assertion of invalidity . . . is based on what occurred during the prosecution of the application—more accurately, the whole sequence of copending applications. The problem, therefore, is what, if anything, could have been done in the PTO during prosecution to cure or overcome misconduct consisting of intentional misstatements of asserted material facts so as to have saved the later issued patent from the consequences of the misconduct. We are not dealing with the question of what, if anything, can be done after the patent issued to alleviate the effect of misconduct, as did one of our predecessor courts in In re Clark, 522 F.2d 623 (CCPA 1975) (unsuccessful attempt to overcome failure to inform the PTO of highly relevant prior art by reissue of patent).19

In In re Clark, the predecessor court to the Federal Circuit held that reissue proceedings cannot be used to cure patents of fraud that occurred, uncorrected, in the prosecution of a patent: Reissue is not available to rescue a patentee who had presented claims limited to avoid particular prior art and then had failed to disclose that prior art (the examiner not having cited it) after that failure to disclose has resulted in the

17. Id. 18. Id. at 1572. 19. Id. at 1571.

Curing Potential Issues of Unenforceability invalidating of the claims. The sole goal of appellant in soliciting a reissue is to have the examiner re-examine his claims in light of the reference he originally failed to disclose in order, apparently, to relieve him of the consequences of his failure.20

B. Curing Unenforceability Due to Misuse of an Issued U.S. Patent In addition to unenforceability due to inequitable conduct (fraud) in procurement of a patent from the U.S. Patent Office, an issued U.S. patent may be unenforceable under the doctrine of patent misuse due to improper assertion of patent rights. As explained by the Federal Circuit: The defense of patent misuse arises from the equitable doctrine of unclean hands, and relates generally to the use of patent rights to obtain or to coerce an unfair commercial advantage. Patent misuse relates primarily to a patentee’s actions that affect competition in unpatented goods or that otherwise extend the economic effect beyond the scope of the patent grant. See Mallinckrodt, Inc. v. Medipart, Inc., 976 F.2d 700, 703–04 (Fed. Cir. 1992) (“The concept of patent misuse arose to restrain practices that did not in themselves violate any law, but that draw anticompetitive strength from the patent right, and thus were deemed to be contrary to public policy”).21

Patents that have been misused are unenforceable.22 However, patent misuse may be cured and the patents enforced: Patent misuse arises in equity, and a holding of misuse renders the patent unenforceable until the misuse is purged; it does not, of itself, invalidate the patent. See Morton Salt Co. v. G. S. Suppiger Co., 314 U.S. 488, 86 L. Ed. 363, 62 S. Ct. 402 (1942); Senza-Gel Corp. v. Seiffhart, 803 F.2d 661, 668 n.10 (Fed. Cir. 1986).23

20. In re Clark, 522 F.2d 623, 627 (C.C.P.A. 1975); Rohm, 722 F.2d at 1572 (“one of our predecessor courts in In re Clark, 522 F.2d 623 (CCPA 1975) [found an] unsuccessful attempt to overcome failure to inform the PTO of highly relevant prior art by reissue of patent[.]”). 21. C.R. Bard v. M3 Sys., 157 F.3d 1340, 1372 (Fed. Cir. 1998). 22. Rohm., 722 F.2d at 1571–72 (Fed. Cir. 1983); B. Braun Med., Inc., v. Abbott Labs., 124 F.3d 1419, 1427 (Fed. Cir. 1997); C.R. Bard, 157 F.3d at 1372; Qualcomm Inc. v. Broadcom Corp., 548 F.3d 1004, 1025 (Fed. Cir. 2008). 23. C.R. Bard, 157 F.3d at 1372; Rohm, 722 F.2d at 1571–72 (in certain limited circumstances it may be possible to “cure” inequitable conduct during prosecution of the same application in which the inequitable conduct occurred); B. Braun Med., 124 F.3d at 1427 (patents are “unenforceable until the misuse is purged.”); Qualcomm, 548 F.3d at 1025 (“[P]atent misuse does not render a patent unenforceable for all time.”).

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V. Correcting Errors and Potential Invalidity in Issued Patents When as a result of defensive due diligence, a potential error is discovered in an issued patent, in prior art that could potentially adversely affect the validity of an issued patent, or in the named inventorship, the patent owner may consider correcting the error in a reissue proceeding, vetting the prior art in a reexamination proceeding, or correcting inventorship prior to offering the patent for sale or licensing. Moreover, in the event that it appears that there may be a potential error in an issued patent that may be corrected in a reissue proceeding, potentially adverse prior art that may be vetted in a reexamination proceeding, or inventorship errors that may be corrected, but there is insufficient time for the patent owner to do so prior to assigning or licensing the patent, the patentee should consider disclosing the potential issue and the potential cure to the purchaser or licensee. Disclosing this information prior to an assignment or licensing may increase the likelihood of completing the transaction and/or the value of the patent rights, and may satisfy representations and warranties regarding the subject patent. As discussed below, certain errors in issued U.S. patents may be corrected by reissue proceedings. In addition, documentary prior art that was not considered in a patent’s prosecution24 may be considered by the Patent Office in a reexamination proceeding. Both procedures are discussed in detail in Chapter 21 and briefly below. Still further, as discussed below, inventorship may be corrected under certain circumstances.

A. Reissue When as a result of defensive due diligence, an error is discovered in an issued patent, depending on the nature of the error and the timing, it might be possible for the patent owner to correct the error through a reissue proceeding in the U.S. Patent Office. If the reissue proceedings are successful, the U.S. Patent Office issues a corrected version of the patent (a reissue patent) that the patent owner may then offer for sale or licensing. As discussed in detail in Chapter 21, reissue is a procedure conducted in and by the U.S. Patent Office for the correction of certain types of errors in issued U.S. patents. A common error that is correctable in reissue occurs when the patentee claimed more or less than he had a right to claim in the patent. However, there are strict limitations on the types of errors correctable by

24. Or where a specific issue related to documentary prior art was not considered in a patent’s prosecution.

Correcting Errors and Potential Invalidity in Issued Patents

reissue, and on the time in which certain errors may be corrected. Further, any claims that issue in a reissue patent in violation of these limitations are invalid. Reissue is based on 35 U.S.C. § 251, which sets forth the requirements for reissuance of a U.S. patent: Whenever any patent is, through error without any deceptive intention, deemed wholly or partly inoperative or invalid, by reason of a defective specification or drawing, or by reason of the patentee claiming more or less than he had a right to claim in the patent, the Director shall, on the surrender of such patent and the payment of the fee required by law, reissue the patent for the invention disclosed in the original patent, and in accordance with a new and amended application, for the unexpired part of the term of the original patent. No new matter shall be introduced into the application for reissue. The Director may issue several reissued patents for distinct and separate parts of the thing patented, upon demand of the applicant, and upon payment of the required fee for a reissue for each of such reissued patents. The provisions of this title relating to applications for patent shall be applicable to applications for reissue of a patent, except that application for reissue may be made and sworn to by the assignee of the entire interest if the application does not seek to enlarge the scope of the claims of the original patent. No reissued patent shall be granted enlarging the scope of the claims of the original patent unless applied for within two years from the grant of the original patent.25

Reissuance of U.S. patents is remedial in nature. As explained by the Federal Circuit in In re Weiler: “In enacting the statute, Congress provided a statutory basis for correction of ‘error.’ The statute is remedial in nature, based on fundamental principles of equity and fairness, and should be construed liberally.”26 The Federal Circuit later noted: Pursuant to 35 U.S.C. § 251, a patentee may obtain reissue of a patent if the patent is, through error “without any deceptive intention, deemed wholly or partly inoperative or invalid, . . . by reason of the patentee claiming more or less than he had a right to claim in the patent. . . .” 35 U.S.C. § 251; see also 37 C.F.R. § 1.175. “In considering the ‘error’ requirement, we keep in mind that the reissue statute is ‘based on fundamental principles of equity and fairness, and should be construed liberally.’ ” Hester Indus., Inc. v. Stein, Inc., 142 F.3d 1472, 1479 (Fed. Cir. 1998) (citation omitted). We have stated that “[a]n attorney’s

25. 35 U.S.C. § 251 (2009). 26. In re Weiler, 790 F.2d 1576, 1579 (Fed. Cir. 1986) (citations omitted).

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686 Chapter 19 Evaluating and Opining on One’s Own Patent Rights failure to appreciate the full scope of the invention is one of the most common sources of defects in patents,” and is generally sufficient to justify reissuing a patent. In re Wilder, 736 F.2d 1516, 1519 (Fed. Cir. 1984); see also Hester, 142 F.3d at 1479–80; In re Clement, 131 F.3d 1464, 1468 (Fed. Cir. 1997); Mentor Corp. v. Coloplast, Inc., 998 F.2d 992, 995 (Fed. Cir. 1993); Scripps Clinic & Res. Found. v. Genentech, Inc., 927 F.2d 1565, 1575 (Fed. Cir. 1991). It is not necessary that the error be unavoidable or that the error could not have been discovered by the patentee through proper communication with the prosecuting attorney. Wilder, 736 F.2d at 1519.27

However, the Federal Circuit has cautioned: [N]ot every event or circumstance that might be labeled “error” is correctable by reissue. . . . The reissue statute was not enacted as a panacea for all patent prosecution problems, nor as a grant to the patentee of a second opportunity to prosecute de novo his original application. . . . The grant of reissues [is not required] on anything and everything mentioned in a disclosure. . . . [Section] 251 does not authorize a patentee to re-present his application. Insight resulting from hindsight on the part of new counsel does not, in every case, establish error.28

Nonlimiting examples29 of “errors” that cannot be corrected by reissue include: (a) intentional, deliberate acts, decisions, and the like, made during preparation of the patent or during the original prosecution of the patent application, including deliberate decisions to surrender subject matter by amendment and arguments;30 and (b) intentionally made priority claims.31

B. Reexamination When defensive due diligence discovers documentary prior art that may adversely affect the validity of one or more claims of a patent, under certain limited circumstances the U.S. Patent Office may reexamine the patent based

27. Medtronic, Inc. v. Guidant Corp., 465 F.3d 1360, 1372 (Fed. Cir. 2006). 28. Weiler, 790 F.2d at 1579, 1582, 1583 n. 4. 29. For further information, see Chapter 21; see also Kunin & Schor, The Reissue Recapture Doctrine: Its Place Among the Patent Laws, 22 Cardozo Arts & Ent LJ 451 (2004). 30. E.g., Mentor Corp. v. Coloplast, Inc., 998 F.2d 992, 995 (Fed. Cir. 1993); Kim v. ConAgra Foods, Inc., 465 F.3d 1312, 1322 (Fed. Cir. 2006) (footnote omitted) (“A patentee can surrender subject matter either through arguments or amendments made during the prosecution of the original patent.”). 31. In re Serenkin, 479 F.3d 1359, 1366–61 (Fed. Cir. 2007).

Correcting Errors and Potential Invalidity in Issued Patents

on the prior art. If the reexamination successfully overcomes the prior art, the potential issue of invalidity is not eliminated for the reexamined patent. However, the burden of proving invalidity in a U.S. court based on that prior art is increased. As discussed in detail in Chapter 21, reexaminations are procedures conducted in and by the U.S. Patent Office in which the Patent Office reexamines the patentability of issued patents when documentary prior art raises a substantial new question of patentability of at least one claim of an issued patent. A patentee requests reexamination by filing a Request for Reexamination and paying a Reexamination Request Fee.32 A Request for Reexamination may be filed at any time during which an issued patent is enforceable.33 Reexamination will only be ordered based on documentary prior art, such as U.S. patents and printed publications under 35 U.S.C. § 102(b).34 However, admissions by the patent owner, whether in the patent’s record or in court, relating to any prior art (including prior sale and public use) may be considered by the Examiner in reexamination if considered in conjunction with patents or other printed publications.35 Still further, a Request for Reexamination must raise a “substantial new question of patentability affecting [at least one] claim of the patent concerned.”36 This requirement does not necessarily mean that prior art considered by the Patent Office in examining the subject patent cannot be relied upon in a Request for Reexamination.37 As explained by the Federal Circuit: The PTO, however, may only grant a reexamination request if it determines that “a substantial new question of patentability affecting any claim of the patent concerned is raised by the request.” . . .

32. 35 U.S.C.S. § 302 (2009). 33. 21 C.F.R. § 1.501 (2009) (A Request for Reexamination may be filed “[a]t any time during the enforceability of a patent. . . .”); M.P.E.P. § 2204 (8th ed., vol. 2, 2008) (“The period of enforceability is the length of the term of the patent plus the 6 years under the statute of limitations for bringing an infringement action (35 U.S.C.S. 286). In addition, if litigation is instituted within the period of the statute of limitations, citations may be submitted after the statute of limitations has expired, as long as the patent is still enforceable against someone.”). 34. 35 U.S.C.S. § 303 (2009); Quad Envtl. Techs. Corp. v. Union Sanitary Dist., 946 F.2d 870, 875 (Fed. Cir. 1991) (“[Q]uestions of public use and on sale were explicitly excluded by statute from those issues on which reexamination could be obtained.”). 35. Quad Envtl., 946 F.2d at 875 n.7 (“[M.P.E.P.] § 2217 was revised . . . to allow consideration of admissions of public use or sale . . . ‘An admission relating to any prior art (i.e., on sale, public use, etc.) established in the record or in court may be used by the examiner in combination with patents or printed publications in a reexamination proceeding.’ ”) (emphasis in original) (quoting M.P.E.P. § 2217 (5th ed., rev. 12, 1989)). 36. 35 U.S.C.S. § 303 (2009). 37. Id. (“The existence of a substantial new question of patentability is not precluded by the fact that a patent or printed publication was previously cited by or to the Office or considered by the Office.”).

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688 Chapter 19 Evaluating and Opining on One’s Own Patent Rights Section 303(a) now mandates that “the existence of a substantial new question of patentability is not precluded by the fact that a patent or printed publication was previously cited by or to the Office or considered by the Office.” Thus, under § 303(a) as amended, a reference may present a substantial new question even if the examiner considered or cited a reference for one purpose in earlier proceedings. Nothing in the statute creates an exception to this rule for references considered in the context of a rejection of prior claims. . . . The 2002 amendment removes the focus of the new question inquiry from whether the reference was previously considered, and returns it to whether the particular question of patentability presented by the reference in reexamination was previously evaluated by the PTO. As was true before the amendment, an “argument already decided by the Office, whether during the original examination or an earlier reexamination” cannot raise a new question of patentability. H.R. Rep. No. 96–1307; see also H.R. Rep. No. 107–120, at 3 (explaining that the amendment did not diminish the “substantial new question requirement” and that “[t]he issue raised must be more than just questioning the judgment of the examiner.”). As we explained in In re Recreative Technologies Corp., the substantial new question requirement “guard[s] against simply repeating the prior examination on the same issues and arguments” and bars “a second examination, on the identical ground that had previously been raised and overcome.” 83 F.3d at 1396–97. As we recognized even in In re Portola Packaging, a single reference might, alone or in combination, create multiple possible grounds of rejection and thus raise more than one “question of patentability.”38

C. Correcting Inventorship When evaluating and opining on patent ownership in defensive due diligence, a company may discover that the named owners on a company patent are incorrect. If they were not made with deceptive intent, U.S. patent law provides two means to correct such mistakes. Section 116 (35 U.S.C. § 116, P 3) allows for the correction of inventors while patent applications are pending with the U.S. Patent Office: Whenever through error a person is named in an application for patent as the inventor, or through error an inventor is not named in an application, and such error arose without any deceptive intention on his part, the Director may permit the application to be amended accordingly, under such terms as he prescribes.39

38. In re Swanson, 540 F.3d 1368, 1375–76, 1379–80 (Fed. Cir. 2008). 39. 35 U.S.C.S. § 116, P 3 (2009); Stern v. Trustees of Columbia Univ., 434 F.3d 1375, 1377–78 (Fed. Cir. 2006); Eli Lilly & Co. v. Aradigm Corp., 376 F.3d 1352, 1358–59 (Fed. Cir. 2004).

Risk of Declaratory Judgment for Licensing Overtures 689

Section 256 of the U.S. Patent Statute (35 U.S.C. § 256) allows for the correction of inventorship by U.S. courts in issued U.S. patents: Whenever through error a person is named in an issued patent as the inventor, or through error an inventor is not named in an issued patent and such error arose without any deceptive intention on his part, the Director may, on application of all the parties and assignees, with proof of the facts and such other requirements as may be imposed, issue a certificate correcting such error. The error of omitting inventors or naming persons who are not inventors shall not invalidate the patent in which such error occurred if it can be corrected as provided in this section. The court before which such matter is called in question may order correction of the patent on notice and hearing of all parties concerned and the Director shall issue a certificate accordingly.40

VI. Risk of Declaratory Judgment for Licensing Overtures As discussed above, an important role of evaluations and opinions of patents in defensive due diligence is to evaluate third party technology for potential infringement of a company’s patents (i.e., for company-owned blocking patents). Once such third parties are identified, they may be approached for potential licensing of the company’s blocking patents. However, caution should be exercised when approaching a potentially infringing third party for licensing negotiations. Under Federal Circuit law, if in patent licensing overtures, a patentee asserts to a third party that its activities infringe its patent, this assertion may provide the third party with jurisdiction to sue the patentee in a declaratory judgment action.41 In such an action, the third party could claim that its activities do not infringe the company’s patents—and could challenge the validity and enforceability of the asserted patents. Thus, a company merely seeking to license its patents could unwittingly be drawn into full-scale patent litigation (that it may not have the resources to prosecute). In such an event, the patent owner would have to

40. 35 U.S.C.S. § 256 (2009); Shum v. Intel Corp., 499 F.3d 1272, 1277 (Fed. Cir. 2007) (“A correction for inventorship claim under section 256 creates a cause of action in federal courts that authorizes a district court to resolve inventorship disputes over issued patents.”). 41. SanDisk Corp. v. STMicroelectronics, Inc., 480 F.3d 1372 (Fed. Cir. 2007); Adenta GmbH v. OrthoArm, Inc., 501 F.3d 1364, 1370 (Fed. Cir. 2007); Sony Elecs., Inc. v. Guardian Media Techs., Ltd., 497 F.3d 1271, 1286 (Fed. Cir. 2007); Teva Pharm. USA, Inc. v. Novartis Pharm. Corp., 482 F.3d 1330, 1346 (Fed. Cir. 2007).


fully defend and assert its patent or face a default judgment. This is what happened in the Federal Circuit’s SanDisk case.42 In SanDisk, the Federal Circuit stated the following regarding when patent licensing overtures may give an approached potential licensee jurisdiction to sue the patent holder in a declaratory judgment action: We hold . . . that where a patentee asserts rights under a patent based on certain identified ongoing or planned activity of another party, and where that party contends that it has the right to engage in the accused activity without license, an Article III case or controversy will arise and the party need not risk a suit for infringement by engaging in the identified activity before seeking a declaration of its legal rights.43

The court found that the following facts provided the potential licensee with jurisdiction to sue the potential licensor, patentee: Under the facts alleged in this case, SanDisk has established an Article III case or controversy that gives rise to declaratory judgment jurisdiction. ST sought a right to a royalty under its patents based on specific, identified activity by SanDisk. For example, at the August 27, 2004 licensing meeting, ST presented, as part of the “license negotiations,” a thorough infringement analysis presented by seasoned litigation experts, detailing that one or more claims of its patents read on one or more of SanDisk’s identified products. At that meeting, ST presented SanDisk with a detailed presentation which identified, on an elementby-element basis, the manner in which ST believed each of SanDisk’s products infringed the specific claims of each of ST’s patents. During discussions, the experts liberally referred to SanDisk’s present, ongoing infringement of ST’s patents and the need for SanDisk to license those patents. ST also gave SanDisk a packet of materials, over 300 pages in length, containing, for each of ST’s fourteen patents under discussion, a copy of the patent, reverse engineering reports for certain of SanDisk’s products, and diagrams showing a detailed infringement analysis of SanDisk’s products. ST communicated to SanDisk that it had made a studied and determined infringement determination and asserted the right to a royalty based on this determination. SanDisk, on the other hand, maintained that it could proceed in its conduct without the payment of royalties to ST. These facts evince that the conditions of creating “a substantial controversy, between parties having adverse legal interest, of sufficient immediacy and reality to warrant the issuance of a declaratory judgment” were fulfilled. SanDisk need not “bet the farm,” so to speak, and risk a suit for infringement by cutting

42. SanDisk, 480 F.3d at 1372 (Fed. Cir. 2007). 43. Id. at 1381.

Avoiding Waiver of Attorney-Client Privilege and Work Product Immunity off licensing discussions and continuing in the identified activity before seeking a declaration of its legal rights. See MedImmune, 127 S. Ct. at 774 n.11.44

Also of note in SanDisk was the court’s holding that a statement by the patent-owning company to the potential licensee that it would not sue them as to particular products did not remove declaratory judgment jurisdiction for the potential licensee: We decline to hold that Jorgenson’s statement that ST would not sue SanDisk eliminates the justiciable controversy created by ST’s actions, because ST has engaged in a course of conduct that shows a preparedness and willingness to enforce its patent rights despite Jorgenson’s statement. Having approached SanDisk, having made a studied and considered determination of infringement by SanDisk, having communicated that determination to SanDisk, and then saying that it does not intend to sue, ST is engaging in the kinds of “extra-judicial patent enforcement with scare-the-customer-and-run tactics” that the Declaratory Judgment Act was intended to obviate. ST’s statement that it does not intend to sue does not moot the actual controversy created by its acts.45

Therefore, patent owners should use caution when approaching potential patent licensees to minimize the risk of being drawn into a declaratory judgment action in which the patentee would have to defend and enforce the patent offered for licensing. At minimum, patentees should avoid communicating “a studied and considered determination of infringement” to a potential licensee, such as by providing a potential licensee with an infringement analysis showing that its activities infringe the company’s patents.

VII. Avoiding Waiver of Attorney-Client Privilege and Work Product Immunity of Patent Opinions in Due Diligence Another important aspect of defensive due diligence is preparing to conduct due diligence in a manner that avoids unwanted waiver of attorney-client privilege and work product immunity relating to opinions a company may have regarding its patents and clearance to practice its technology free from infringement of valid and enforceable third party patents.

44. Id. at 1382 (footnote omitted, some citations omitted). 45. Id. at 1382–83 (citation omitted); contra Benitec Austl., Ltd. v. Nucleonics, Inc., 495 F.3d 1340, 1347–48 (Fed. Cir. 2007) (distinguishing SanDisk, and holding that, on different facts, a covenant not to sue precluded declaratory judgment jurisdiction to a potential licensee).

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This section briefly discusses these issues; however, this topic is discussed in detail in Section VI of Chapter 24 (waiver of attorney-client privilege and work product immunity). It is highly recommended that the reader consult Section VI of Chapter 24 prior to entering into any due diligence discussions with third parties regarding patent rights. Waiver of attorney-client privilege and work product immunity is a serious issue, with significant ramifications that can occur readily when a company is not prepared in advance to protect its privileges and immunities.

A. Overview: Exercise Due Care with Attorney-Client Privilege and Work Product Immunity in Due Diligence Due diligence investigations involving patent rights commonly raise issues concerning waiver of attorney-client privilege and work product immunity. In patent due diligence, patent-owning companies (often referred to as “target” companies in due diligence) typically have the opinions of counsel discussed above. These include opinions regarding a company’s patents, such as those of claim scope, infringement, validity, enforceability, and ownership. Further, patent-owning companies generally have clearance opinions regarding their ability to practice their technology free from infringing valid and enforceable third party patents. These include opinions of noninfringement, invalidity, and unenforceability of third party patents. These opinions are generally privileged to the target company provided it has kept them confidential and has not otherwise waived its privileges and immunities as to these opinions. Unfortunately, as discussed in Chapter 24, the law regarding waiver of these opinions in due diligence is varied and ill-defined. Therefore, unintentional waiver of attorney-client privilege and work product immunity can occur in due diligence involving patent rights. This is especially likely when patentowning companies are not prepared in advance to address these issues. As discussed in Chapter 11 (due diligence), during a patent due diligence process it is common for the company seeking to acquire patent rights (typically referred to as an “acquiring company”) to ask to review the patent opinions of a target company. Acquiring companies often make this request to save the money and time that would be required for them to obtain their own opinions. Importantly, for the reasons discussed briefly below and in detail in Section VI of Chapter 24, target companies should attempt to avoid disclosing any privileged and immune opinions to acquiring companies, even under confidentiality provisions. If a target company shares its confidential opinions with an acquiring company, even under a confidentiality agreement and with a common interest in play, this may cause a waiver of the attorney-client privilege and work product immunity by the target company as to the shared opinions.

Avoiding Waiver of Attorney-Client Privilege and Work Product Immunity

Ideally, a target (patent-owning) company in patent due diligence should never share its attorney-client privileged and work product protected materials with any third party, including the acquiring party. Each party should obtain its own patent opinions and not disclose them to the other party. This should be the case regardless of whether there is a confidentiality agreement, an apparent common interest, or a joint defense agreement between the acquiring and target companies. However, due diligence investigations are often performed under less than ideal conditions. Frequently, pressures such as constraints of time and money place enormous pressure on target companies to disclose to the acquiring company attorney-client privileged and work product-protected materials such as freedom to operate opinions of the target company. In these instances, there is always an unavoidable risk that disclosure of attorney-client privileged and work product-protected materials between parties in due diligence may waive these privileges and protections. While this risk can never be entirely eliminated, steps can be taken in defensive due diligence to improve the odds of maintaining these privileges. For example, the risk of waiver can be lowered by making sure that all disclosures are confidential and limited and by complying with the requirements of establishing a common interest between the due diligence parties (such as by executing a joint defense agreement). These steps are discussed in detail in Section VI of Chapter 24 as well as briefly below.46

B. Choice of Law for Waiver in Patent Due Diligence As discussed in Chapter 24, the law is unclear as to whether the Federal Circuit will apply regional circuit law or its own law in considering waiver of attorneyclient privilege and work product immunity under different circumstances. The Federal Circuit has held that “[f]or procedural matters that are not unique to patent issues, we apply the perceived law of the regional circuit.”47 “ ‘Federal Circuit law applies when deciding whether particular written or other materials are discoverable in a patent case,’ at least if that issue clearly implicates substantive patent law.”48 However, the Federal Circuit has been less than clear on instructing exactly when Federal Circuit law or regional circuit law applies in patent cases.

46. Because of the importance of waiver of attorney-client privilege and work product immunity in due diligence, the reader is highly encouraged to read carefully Section VI of Chapter 24 and to apply its teachings in defensive due diligence. 47. In re Pioneer Hi-Bred Int’l, Inc., 238 F.3d 1370, 1374 (Fed. Cir. 2001). 48. Id.

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For example, the court has stated: [W]e apply the law of the circuit in which the district court sits with respect to nonpatent issues, but we apply our own law to issues of substantive patent law. See Institut Pasteur v. Cambridge Biotech Corp. (In re Cambridge Biotech Corp.), 186 F.3d 1356, 1358 (Fed. Cir. 1999). . . . Applying these standards, we have held, for example, that Federal Circuit law applies when deciding whether particular written or other materials are discoverable in a patent case, because they relate to an issue of substantive patent law. See id. (citing Truswal Sys. Corp. v. Hydro-Air Eng’g, Inc., 813 F.2d 1207, 1212, 2 U.S.P.Q.2D (BNA) 1034, 1038 (Fed. Cir. 1987) (“[A] determination of relevance implicates the substantive law of patent validity and infringement. Hence, we look to Federal Circuit law.”))49

On the other hand, the Federal Circuit has held: [T]his court . . . conclud[ed] that, under Seventh Circuit law, communications between a licensor and the attorneys of its licensee were protected by the attorney-client privilege. We applied the law of the regional circuit because the issue in that case, whether a licensor and a licensee are joint clients for purposes of privilege under the community of interest doctrine, was not unique to patent law.50

Therefore, while it remains rather unclear as to exactly when the Federal Circuit will apply its own law, at least “for purposes of [determining] privilege under the community of interest doctrine”51 (which is addressed below and in detail in Section VI[E] of Chapter 24), the Federal Circuit applies the law of the regional circuit.

C. Disclosure of a Privileged Opinion to a Third Party May Result in Waiver of the Attorney-Client Privilege and Work Product Immunity of the Opinion As a rule, whether under regional circuit or Federal Circuit law, disclosure by the privilege holder of a privileged opinion to a third party may result in waiver of the attorney-client privilege and work product immunity associated with that opinion. As stated by the Federal Circuit: “[A] waiver occurs . . .

49. In re Spalding Sports Worldwide, Inc., 203 F.3d 800, 803–4 (Fed. Cir. 2000). 50. Id. at 804. 51. Id


when a party . . . discloses advice of counsel or other privileged information in connection with the merger.”52 Further, as held by the Third Circuit: Accordingly, voluntary disclosure to a third party of purportedly privileged communications has long been considered inconsistent with an assertion of the privilege. United States v AT&T, 206 App. D.C. 317, 642 F.2d 1285, 1299 (D.C. Cir 1980). As one commentator cogently explained: If clients themselves divulge such information to third parties, chances are that they would also have divulged it to their attorneys, even without the protection of the privilege. Thus, once a client has revealed privileged information to a third party, the basic justification for the privilege no longer applies . . . Comment, Stuffing the Rabbit Back into the Hat: Limited Waiver of the Attorney-Client Privilege in an Administrative Agency Investigation, 130 U Pa L Rev 1198, 1207 (1982). Consequently, it is well-settled that when a client voluntarily discloses privileged communications to a third party, the privilege is waived. See Rockwell, 897 F.2d at 1265. See also 8 Wright & Miller, § 2016 at 127 and n71; id, § 2024 at 210 (citing cases).53

However, to make matters more complicated (as is apparent from the cases discussed in briefly below and in detail in Chapter 24), if a court determines that regional circuit law applies to waiver of attorney-client privilege and work product protection, there is substantial variability among circuits as to how flexible courts may be in finding waiver of privilege in the context of third party disclosures.54 Thus, the venue in which a privilege issue is tried may potentially affect the court’s decision on waiver.

D. Disclosure of a Privileged Opinion to a Third Party May Waive All Privileges Associated with the Opinion, Even If the Disclosure Is Confidential and Under a Confidentiality Agreement In another area of uncertainty, the law is not entirely clear on the role that confidentiality plays in whether disclosure of attorney-client privileged and work product protected materials to a third party results in waiver. For example, in Westinghouse, the Third Circuit held that a waiver of privilege

52. In re Pioneer Hi-Bred Int’l, Inc., 238 F.3d 1370, 1374 (Fed. Cir. 2001). 53. Westinghouse Elec. Corp. v. Republic of Phil., 951 F.2d 1414, 1424 (3d Cir. 1991) (emphasis added). 54. For example, as shown in the cases discussed below, in the context of waiver and the common interest doctrine, the Northern District of California has a more expansive view of privilege, whereas the Northern District of Ohio has a more restrictive view.

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occurred regardless of the fact that a disclosure to a third party was confidential and under a confidentiality agreement. Westinghouse further contends, however, that the SEC’s regulations concerning confidentiality and the stipulated court order memorializing the confidentiality agreement between Westinghouse and the DOJ must be regarded as preserving the attorney-client privilege with respect to the information disclosed because of Westinghouse’s expectations of confidentiality engendered thereby. We reject Westinghouse’s argument that it did not waive the privilege because it reasonably expected that the SEC and the DOJ would maintain the confidentiality of the information that it disclosed to them. Even though the DOJ apparently agreed not to disclose the information, under traditional waiver doctrine a voluntary disclosure to a third party waives the attorney-client privilege even if the third party agrees not to disclose the communications to anyone else. See, for example, Rockwell, 897 F.2d at 1265 (“The attorney-client privilege does not apply to communications that are intended to be disclosed to third parties or that in fact are so disclosed.”) (emphasis added). See also 8 Wigmore, Evidence § 2327 at 636; Note, 36 Stan L Rev at 792.55

The D.C. Circuit made a similar holding in Periman Corp. v. United States.56 On the other hand, in Hewlett-Packard Co. v. Bausch & Lomb, the Northern District of California held that although it was a “close question”57 and “a close case,”58 disclosure of a privileged letter to a third party did not result in waiver, in part because the “defendant did everything within its power to impress upon [the third party] the importance of maintaining the confidentiality of the letter and [the third party], in turn, seems to have undertaken to hold the letter in confidence.”59 Additionally, in Tenneco, the Northern District of Illinois held that disclosure of a noninfringement opinion by a target company to an acquiring company during a due diligence investigation did not result in waiver of the privileges associated with the disclosed opinion, in part because: [The acquiring company] took substantial steps to ensure that the opinion would remain confidential. According to [the acquiring company], “access to the opinion was controlled by specific procedures designed to prevent dissemination of its contents”; [the target company] showed the opinion to a limited

55. 56. 57. 58. 59.

Westinghouse, 951 F.2d at 1427 (footnote omitted, emphasis added). Periman Corp. v. United States, 665 F.2d 1214, 1221 (D.C. Cir. 1981). Hewlett-Packard Co. v. Bausch & Lomb, Inc., 115 F.R.D. 308, 309 (N.D. Cal. 1987). Id. at 312. Id. at 311.

Avoiding Waiver of Attorney-Client Privilege and Work Product Immunity number of [the acquiring company] representatives, and then only after they acknowledged that disclosure was subject to a confidentiality agreement. Thus, the opinion is privileged and need not be produced.60

Therefore, the best practice is to avoid disclosing privileged and work product protected materials to third parties. However, if this is not possible (e.g., because of financial and/or monetary constraints in due diligence), any such disclosures should be made under a confidentiality agreement between the disclosing and receiving parties. While this will not ensure that a court will hold that a waiver of attorney-client privilege and work product immunity did not occur, it is at least a step in the right direction.

E. The Common Interest Doctrine The common interest doctrine is frequently used as a basis for arguing against waiver of privilege that might otherwise result from a target company in due diligence disclosing privileged material to an acquiring company. However, as with all of the legal issues in this area, “[t]he legal boundaries which define the scope of the ‘common interest’ rule are by no means well defined.”61 Therefore, again, the best practice is always to avoid any third party disclosures in due diligence. However, where this is not possible, some district courts have found that the common interest doctrine can prevent waiver of attorney-client privilege and work product immunity when certain conditions are met. First, however, as discussed in Chapter 24, the common interest doctrine is not itself a privilege.62 Rather, it is an extension of an existing attorney-client and/or work product privilege.63 Second, as the common interest doctrine is an extension of privilege, the underlying scope of privilege law of the jurisdiction in which the privilege is being asserted is an important factor in how a court will define a “common interest” and whether a court will recognize the extension or will instead find waiver. For example, many of the district court cases64 that have recognized the common interest doctrine (including in the context of patent due diligence) have come from courts located in jurisdictions with an “expansive view” of privilege. These courts have defined the “common interest” in a manner that allows for a finding of privilege in furtherance of the jurisdiction’s expansive

60. Tenneco Packaging Specialty & Consumer Prods., Inc. v. S.C. Johnson & Son, Inc., 1999 U.S. Dist. LEXIS 15433, *8 (N.D. Ill. 1999). 61. GTE Directories Service, Corp. v. Pacific Bell Directory, 135 F.R.D. 187, 191 (N.D. Cal. 1991) (emphasis added). 62. Katz v. AT& T Corp., 191 F.R.D. 433, 436–37 (E.D. Pa. 2000). 63. Id. 64. There are virtually no appellate court cases on this issue.

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view of privilege.65 On the other hand, many of the district court cases that have failed to recognize the common interest doctrine (including in patent due diligence) and have found waiver of privilege have come from courts located in jurisdictions with a “restrictive view” of privilege. These courts have defined the “common interest” in a manner that allows for a finding of waiver of privilege in furtherance of the jurisdiction’s restrictive view of privilege.66 For example, in taking an expansive view of privilege and, therefore, finding common interest protection of privilege in patent due diligence, the HewlettPackard court ruled as follows: The issue in this discovery dispute is whether defendant Bausch & Lomb waived its rights under the attorney-client privilege and/or the work product doctrine when it voluntarily disclosed its attorney’s opinion letter to a non-party with whom it was attempting to negotiate the sale of a business. . . . At this juncture the court is persuaded that defendant’s disclosure of the opinion letter regarding the LaBarre patent should not constitute a waiver of the attorney-client privilege. This is a close question, on both sides of which there are substantial competing interests. . . . For the reasons set forth below, however, the court concludes that the interests that would be harmed by finding waiver in these circumstances outweigh the interests that would be advanced by such a finding.67

On the other hand, under not very different facts but by a court taking a restrictive view of privilege so as to find no common interest protection and hence waiver of privilege in patent due diligence, the Libbey Glass court ruled: Voluntary disclosure of an attorney’s advice to a third party ordinarily results in waiver of the attorney-client privilege. To overcome this general rule, Oneida argues that no waiver occurred because it, Pasabahce, and Ullmann had a common interest in the legal implications of the agreements that they were negotiating at the time of the disclosure. To encourage sharing of information when such disclosure enhances, rather than undercuts, the policies underlying the attorney-client privilege, the law in some limited circumstances allows communications to remain privileged even after disclosure to third parties. These circumstances include:. . .”common interest” relationships . . .

65. E.g., Hewlett-Packard Co. v. Bausch & Lomb, Inc., 115 F.R.D. 308 (N.D. Cal. 1987); Britesmile, Inc. v. Discus Dental, Inc., 2004 U.S. Dist. LEXIS 20023 (N.D. Cal. 2004); Johnson Elec. N. Am. Inc. v. Mabuchi N. Am. Corp., 1996 U.S. Dist. LEXIS 5227 (S.D.N.Y. 1996). 66. E.g., Libbey Glass, Inc. v. Oneida Ltd., 197 F.R.D. 342 (N.D. Ohio 1999); Corning Inc. v. SRU Biosystems, LLC, 223 F.R.D. 189 (D. Del. 2004). 67. Hewlett-Packard, 115 F.R.D. at 308–9.

Avoiding Waiver of Attorney-Client Privilege and Work Product Immunity Two lines of cases reflect differing views about the common interest arrangement. The more expansive view is expressed in Hewlett-Packard v. Bausch & Lomb. In that case, the court held that no waiver of the attorney-client privilege occurred when a patent owner, who was seeking to sell one of its divisions, disclosed its patent attorney’s opinion letter to the prospective purchaser. The narrower view of the common interest doctrine, as expressed in Bank Brussels Lambert v. Credit Lyonnais, (emphasis supplied), is that confidential communications can be shared only if both parties have more than “merely concurrent legal interests.” Instead, the parties must have “a common legal, as opposed to commercial, interest.” (emphasis supplied). Thus, the parties must show that the disclosures are made in the course of “formulating a common legal strategy.” (emphasis supplied). Clients must understand that legal information is like other types of proprietary information. Any sharing risks waiver of the privilege, and should occur under only certain specified conditions. Those conditions ensure that the information will not be disclosed beyond its use to serve the common legal interest. . . . The restrictive approach of Bank Brussels accommodates the objective of continued confidentiality more effectively than the expansive, unrestricted approach of Hewlett Packard. By limiting the opportunity to claim the common interest privilege, courts encourage parties to take effective steps in advance to acknowledge the privilege and implement the policies it fosters. This approach lends greater predictability to the law and implements the requirement of construing the attorney-client privilege narrowly.68

Therefore, as can be seen from the above cases, similar facts can have different outcomes depending on the jurisdiction in which the waiver issue is tried. Again, this argues strongly that the best practice of a target company is not to disclose any attorney-client privileged or work product immunityprotected information to an acquiring company during due diligence.

F. Other Considerations When Disclosing Privileged Materials to Third Parties During Due Diligence As discussed above, although a target company ideally should not disclose any confidential opinions to acquiring parties, this is often difficult to avoid given the realities of patent due diligence. Thus, those engaged in defensive due diligence should plan on potential disclosure of patent opinions to acquiring companies and should work to protect the attorney-client privilege and attorney work product immunity associated with the disclosed opinions.

68. Libbey Glass, 197 F.R.D. at 347–49 (some citations omitted, emphasis in original and added).

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The following sets forth suggestions for steps that can be taken to attempt to retain privilege and immunity on materials that are disclosed to third parties during due diligence. It cannot be overstressed, however, that the only way to guarantee that privileged and immune materials remain privileged and immune is for the party having the materials to never disclose them to a third party. This is the case even if there is a confidentiality agreement in place, the facts appear to fit a common interest situation, and/or there is a joint defense agreement between the parties. 1. Confidentiality Agreement Any due diligence investigation should have a joint confidentiality agreement in place among all parties before any confidential information is disclosed. Thus, a necessary preparation in defensive due diligence is ensuring that a confidentiality agreement is in place between the patent-owning company and any acquiring company before any disclosures occur. This is particularly important if attorney-client privileged and work product-protected materials are to be disclosed. Disclosure of privileged materials to a third party (such as by a target company to an acquiring company) in the absence of a confidentiality agreement will result in waiver of the attorney-client and work product immunity. As discussed above, depending on the jurisdiction under which the issue may be tried, a confidential disclosure within a due diligence investigation may protect privileges and immunities associated with the disclosed materials. However, as also discussed above, based on the court cases it is far from certain that a confidential disclosure, without more, will protect the privileges and immunities of the disclosed materials. 2. Joint Defense Agreement One of the factors courts consider in determining whether a common interest privilege exists is whether the parties are contemplating actual or potential litigation on the topic of the privileged disclosure. Executing a joint defense agreement prior to disclosing privileged information can provide evidence that the disclosure was made at a time when the parties were contemplating such action. Thus, another essential aspect of defensive due diligence is ensuring that a proper joint defense agreement is in place before any disclosures are made. 3. Timing of Disclosure To the extent possible, the parties to a due diligence investigation should delay any disclosure of privileged information until an agreement between them is near, preferably in its final stages. Disclosing privileged information too early


may be detrimental to establishing a common interest. In Katz, one of the reasons the court failed to uphold the privilege of disclosed materials was that it found: [T]he plaintiffs failed to meet their burden of showing the requisite identity of interests required under the doctrine because the parties had not reached an agreement, final or otherwise, as to the licensing issues prior to [the disclosure]. See In re Bevill, 805 F.2d at 122 (defendant did not produce evidence that parties agreed to pursue joint defense strategy).69

4. To Whom the Disclosure Is Made Additionally, it can be important who reviews the disclosed privileged information. This, too, should be taken into account in defensive due diligence and prior to any disclosures. For example, in Tennoco, the court favorably commented that the disclosing party “showed the opinion to a limited number of [the acquiring company] representatives.”70 In addition, to prove a common interest, it is important that the people viewing the disclosure do so for legal as opposed to business reasons. For example, in Walsh the court refused to find a common interest privilege where the content of a privileged disclosure was communicated not to attorneys, but to businesspeople. The court held: First, the common interest doctrine protects confidences shared by one party with the attorneys of another party. . . . The common enterprise upon which Salomon and Northrop were embarked was a business, not a legal, enterprise. Salomon was advising Northrop on financial and other business strategies. That is plain from the written agreement between them that was submitted to the court on this motion. There was undoubtedly a concern about litigation. Northrop, in cooperation with Salomon as its investment banking advisor, was developing a business strategy one of whose components was to avoid litigation if possible. But that does not transform their common interest and enterprise into a legal, as opposed to commercial, matter.71

5. Plan on Waiver Finally, given all of the concerns cited above about protecting the attorneyclient privilege and work product immunity for materials disclosed to a third party (e.g., during due diligence), if such a disclosure must be made, the

69. Katz v. AT& T Corp., 191 F.R.D. 433, 438 (E.D. Pa. 2000). 70. Tenneco Packaging Specialty & Consumer Prods., Inc. v. S.C. Johnson & Son, Inc., 1999 U.S. Dist. LEXIS 15433, *8 (N.D. Ill. 1999). 71. Walsh v. Northrop Grumman Corp., 165 F.R.D. 16, 18–19 (E.D.N.Y. 1996) (emphasis added).

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involved parties should expect a court finding that the disclosure waived all privileges and immunities associated with the disclosed material, and should plan and proceed accordingly.

VIII. Practice Points A. Refer to Chapters 18 and 12 for More Detailed Discussion Chapter 18 provides a more comprehensive discussion of evaluating one’s own patents for claim scope, validity, enforceability, and ownership. It also provides a detailed discussion of patent audits, creation and use of patent landscapes, and strategic patenting. Therefore, this chapter should be read in conjunction with Chapter 18. Furthermore, Chapter 12 provides a detailed discussion on performing clearance (freedom to operate) evaluations and opinions and should also be read in conjunction with this chapter.

B. Defensive Due Diligence Should Be Proactive Defensive due diligence is best conducted in a proactive manner. Therefore, if possible, defensive due diligence should be completed prior to a company initiating any offers for sale or licensing of a company’s patent rights. Further, even companies that do not plan on offering their patents for sale or licensing benefit from conducting routine defensive due diligence, typically in concert with strategic patenting (as discussed in Chapter 18). In this manner, a company can be prepared for unexpected situations, such as uninvited solicitations to purchase the company or its patent rights. Moreover, defensive due diligence readily compliments strategic patenting, such that it is typically not a burden to combine defensive due diligence with strategic patenting.

C. Defensive Due Diligence Should Be Performed in All Situations Because a well-informed seller and licensor is always in a better position in making a deal, defensive due diligence should always be performed as much as is practical, even if it is necessary to begin the process after negotiations for sale or licensing have begun. Further, whenever possible, defensive due diligence should be completed prior to closing any transaction involving a company’s patent rights.

Practice Points

D. Defensive Due Diligence Should Work with Strategic Patenting, Including the Use of Patent Landscapes As stated above, defensive due diligence and strategic patenting, including the creation and use of patent landscapes (discussed in Chapter 18) complement each other. Therefore, defensive due diligence should be done in conjunction with a company’s strategic patenting as much as possible. This tends to confirm the facts and conclusions of each process, avoid redundancy, and assure that a company keeps exclusivity of the patent rights it needs while selling or licensing the ones it does not need to protect its current or future commercial technology.

E. Use Defensive Due Diligence, Strategic Patenting, and Patent Landscapes to Identify Interested Buyers and Licensees One of the natural outcomes of defensive due diligence, strategic patenting, and creating patent landscapes is identification of third parties who are likely to be particularly interested in certain of a company’s patent rights. For example, evaluations and opinions of infringement identify third parties who have technology that might infringe a company’s patents. If a company’s strategic patenting indicates that the company does not need exclusivity in its patent rights that are apparently infringed by a third party, the company may sell or license those rights to the potentially infringing party.72 That party may be particularly interested in purchasing or licensing the patent rights to avoid infringement, thus increasing the value of the patent rights. Additionally, defensive due diligence, strategic patenting, and patent landscapes may result in the identification of more than one potentially infringing third party. In such cases, if a company seeks to sell or license the potentially infringed patent rights, it may receive increased value for these rights by having multiple interested parties vie for purchase or exclusive licenses. Another example of defensive due diligence identifying potential purchasers of a company’s patent rights arises when a company finds that it has a patent with one or more co-inventors who are not under an obligation to assign their rights to the company. In such cases, the patent is virtually valueless commercially because the non-assigning co-inventor has rights in the full patent and may dispose of them in any manner, and without accounting to

72. Of course, if the company desires to maintain exclusivity of potentially infringed patent rights, it must consider enforcing its patent rights against the potentially infringing third party, including suing that party for patent infringement if necessary.

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the company co-owner. Thus, neither party has enforceable exclusivity. Accordingly, the non-assigning co-inventor may be particularly interested in purchasing the company’s co-ownership rights in the patent so that it can acquire exclusive ownership and enforceability of the patent. Still further, if one or more third parties’ activities may infringe the patent, a third party may desire to purchase the company’s co-ownership so that the non-assigning party cannot enforce the patent against it. Therefore, careful evaluation of the status of third parties identified in defensive due diligence (as well as in strategic patenting and patent landscapes) can identify parties having particularly strong interests in acquiring or licensing a company’s patent rights, which can significantly enhance the value of these rights.73

F. Be Sure to Account for Licenses and Other Grants to Third Parties Those conducting audits of a company’s patent portfolio in defensive due diligence should be careful to take note of all third party rights that may affect the ability of a company to sell or license its patents (e.g., licenses of a company’s patents to third parties). Companies must be careful not to sell or license rights that they do not have or that may affect existing agreements the company already has with third parties, such as existing patent licenses.

G. Companies Should Carefully Evaluate Which Patent Rights Should Be Sold or Licensed As discussed in detail in Chapter 18 (strategic patenting), companies should generally attempt to focus their patenting efforts on obtaining patents that give them exclusivity in the technology of their commercial embodiments, both present and future. Companies generally are not interested in selling or licensing the majority of their patent rights as they provide exclusivity over their commercial technology and, thus, should be retained. However, occasionally a company may obtain patent rights beyond the scope of its commercial technology, both present and future. It is these patent rights that a company should consider selling or licensing.

73. As well as identify parties, including a company’s competitors, who are potentially infringing patent rights that a company may wish to enforce (e.g., by suing its competitors for patent infringement).

Practice Points

H. As a General Rule, Never Produce a Document That Indicates, Either Expressly or by Implication, That a Company Believes, Has Reason to Believe, or Should Believe That Its Technology Infringes a Claim of a Valid and Enforceable Third Party Patent When conducting defensive due diligence, engaging in strategic patenting, or preparing patent landscapes, situations may arise in which one could inadvertently create documents that show (or could be argued to show) that a company’s technology infringes one or more valid and enforceable claims of a third party patent. Caution and vigilance must be used at all times to avoid creating documents that expressly or implicitly may show that a company believes, has reason to believe, or should believe, that its technology infringes a valid and enforceable claim of a third party’s patent. Such documents should never be created or distributed, even confidentially.

I. Evaluate Patent Portfolios, Including Pending Patent Applications, for Potential Issues with Validity, Enforceability, and Inventorship (Ownership), and Make Corrections Where Necessary and When Allowed An important aspect of defensive due diligence involves reviewing a company’s patent portfolio for potential issues of validity, enforceability, and inventorship (ownership). When such problems are detected, a company should consider whether they can be corrected prior to offering patent rights for sale or licensing. Even in the event insufficient time exists to correct errors prior to selling or licensing, telling potential purchasers or licensees of errors and how they may be corrected may allow a deal to proceed and increase the value of a company’s patent rights. Certain errors in issued patents may be corrected by reissue proceedings. The discovery of new documentary prior art issues may be addressed in reexamination proceedings. In certain limited situations, enforceability issues may be resolved. For example, inequitable conduct may be addressed if caught and corrected before issuance of a patent. In addition, unenforceability due to patent misuse may be correctable. Finally, errors in naming inventors may be corrected if there was no deceptive intent in the original naming.

J. Play Close Attention to Patent Inventorship, Which Initially Determines Ownership It is critically important that close attention be paid in defensive due diligence to be certain that the correct inventors are named on a company’s issued patents

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and pending patent applications and that all inventors have assigned their rights to the company (in writing and recorded with the U.S. Patent and Trademark Office). Careful attention should be paid to any potential issues where an inventor on a company patent may not have an obligation to assign his or her rights to the company. In such cases, the non-assigning inventor may even have an obligation to assign those rights to another company. Situations in which this can occur include when employees from more than one company work on a patentable invention or in other types of collaborative efforts. In such cases, full ownership must be obtained in order for a company to enforce a patent or sell or exclusively license full rights in it. In limited situations, a patent having one or more non-assigning co-inventors may have value (e.g., in a sale to the non-assigning co-inventor so that he or she obtains full ownership, or to competitors of a non-assigning co-inventor, so that the co-inventor cannot enforce the patent against its competitors).

K. Use Defensive Due Diligence to Comply with Representations and Warranties in Sale and Licensing of Patent Rights Defensive due diligence can help a patent owner comply with representations and warranties to purchasers or licensees of a company’s patents. For example, evaluations of patent inventorship and ownership that confirm the correct inventors are named on a patent—and that all inventors have assigned their rights to the company—allow a company to warrant and represent that, to the best of its knowledge, the inventorship on the patent is correct, and there are no co-inventors who could assert a co-ownership interest in the patent.

L. Use Caution in Licensing Overtures to Avoid Declaratory Judgment Actions Caution should be exercised when approaching a potentially infringing party and offering a license regarding the potentially infringed patent. If the potential licensor is too explicit in alleging possible or actual infringement of the proffered patent, the potential licensee may obtain declaratory judgment jurisdiction to sue the potential licensor, alleging, for example, noninfringement, invalidity, and unenforceability.

M. Use Caution to Avoid Waiving Attorney-Client Privilege and Work Product Immunity of Patent Opinions An important aspect of defensive due diligence is to plan for maintaining and protecting the attorney-client privilege and work product immunity

Practice Points

associated with a company’s patent opinions. As discussed in detail in Section VI of Chapter 24 (which should be consulted in conjunction with this chapter), patent opinions, such as clearance-related opinions (e.g., noninfringement, invalidity, or unenforceability opinions of third party patents) and patent-related opinions (e.g., scope, infringement, validity, enforceability, and ownership of company patents), should be kept confidential and guarded against disclosure to third parties. When possible, this includes avoiding disclosing such opinions to any third parties, even an acquiring party under a confidentially agreement when the parties have a common interest. At minimum, prior to actual due diligence, those engaged in defensive due diligence should plan on preventing accidental disclosure of opinions and how to protect privileges and immunities as much as possible should disclosure become necessary. This includes preparing confidentiality agreements and joint defense agreements and carefully defining conditions to establish a common interest between the patent owner and an acquiring company. Where possible, this may even include making any disclosures in a jurisdiction that broadly recognizes the common interest doctrine.

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CHAP T ER

20 Evaluating and Opining on One’s Own Patent Rights Prefiling Rule 11 and Section 285 Investigations and Compliance, FDA Orange Book Patent Listing, Obtaining Preliminary Injunctions, and for Readiness in “Rocket Docket” Jurisdictions and ITC Investigations

I. Overview

711

II. Patent Evaluations and Opinions for Rule 11 and Section 285 Prefiling Investigations

711

A. Rule 11

711

B. Role of Patent Evaluations and Opinions in Rule 11 Sanctions

712

C. Section 285

717

D. Role of Patent Evaluations and Opinions in Section 285 Sanctions

719

III. Patent Evaluations and Opinions for FDA Orange Book Patent Listing

720

A. Overview of the Hatch-Waxman Act

721

B. Determining Whether to List Patents in the FDA Orange Book and Whether to Sue for Patent Infringement upon a Third Party Filing an ANDA with a Paragraph IV Certification

724

C. Accountability for Proper Orange Book Listing

725

D. Accountability for Initiating a Patent Infringement Suit for an ANDA Paragraph IV Certification

726

IV. Patent Evaluations and Opinions for Obtaining Preliminary Injunctions A. Assessing the Likelihood of Success on the Merits Requires an Infringement and Validity Analysis

709

726 727

710

Chapter 20 Evaluating and Opining on One’s Own Patent Rights V. Patent Evaluations and Opinions for Readiness in “Rocket Docket” Jurisdictions and ITC Investigations

730

A. “Rocket Docket” Jurisdictions

731

B. ITC Patent Infringement Investigations

731

VI. Practice Points

733

A. Prefiling Infringement Evaluations and Opinions Must Be Done to Comply with Rule 11 and Section 285

733

B. Determining Whether to List a Patent in the Orange Book Requires a Competent Infringement Evaluation and Opinion

733

C. Determining Whether to Sue for Patent Infringement of an Orange Book-Listed Patent by an ANDA Paragraph IV Certification Requires a Competent Infringement Evaluation and Opinion to Comply with Rule 11 and Section 285

734

D. A Noninfringement and/or Invalidity Opinion is Necessary to Obtain a Preliminary Injunction

734

E. Be Aware of the Possibility of Counterclaims of Patent Infringement

734

F. Beware of, Be Prepared for, and if Desired Use “Rocket Docket” Jurisdictions and ITC Investigations

735


Usage Note: As discussed in this chapter, prefiling patent evaluations and opinions for example to avoid sanctions under Rule 11 and Section 825 require at least infringement analyses, including claim construction and application of construed claims to potentially infringing products or processes. Other chapters of relevance to this topic include Chapters 2–10 (patent law principles including claim construction, patent infringement, patent validity, and patent enforceability).

I. Overview Conduction of a thorough evaluation, and if necessary opinion, of one’s own patent rights should be standard practice prior to asserting them, for example in an infringement lawsuit. This will help to identify weaknesses in one’s own patent rights as well as strengths, which can significantly enhance the effectiveness of assertions of one’s patent rights and avoid pitfalls. Additionally, prior to filing an infringement action, it is legally required that a patentee to conduct at least a patent infringement analysis, including claim construction and application of the construed claims to the potentially infringed product or process. This chapter discusses evaluating and opining on one’s own patent rights in the context of litigation compliance with Rule 11 and Section 285, listing patents in the FDA’s Orange Book, obtaining preliminary injunctions, and readiness in “rocket docket” jurisdictions and ITC investigations. Chapter 21 discusses evaluating and opining on one’s own patents in the context of in U.S. Patent Office post-grant procedures.

II. Patent Evaluations and Opinions for Rule 11 and Section 285 Prefiling Investigations In patent litigation, two separate rules provide sanctions for bad faith frivolous litigation: Federal Rules of Civil Procedure Rule 11 (common to all federal lawsuits), and 35 U.S.C. § 285 (unique to patent litigation). Although these rules are similar, there are differences as well. Importantly, however, as discussed below, prefiling evaluations and opinions as to patent infringement play a key role in a court’s determination of whether to apply sanctions under both rules.

A. Rule 11 As explained by the Federal Circuit in Q-Pharma: Rule 11(b) requires an attorney to conduct a reasonable inquiry into the law and facts before filing a pleading in a court and to certify that the claims contained

712 Chapter 20 Evaluating and Opining on One’s Own Patent Rights therein are not frivolous, legally unreasonable, without factual foundation, or asserted for an improper purpose. Rule 11(c) then permits a district court to impose sanctions on a party and its attorneys for violation of subdivision (b). In the context of patent infringement actions, we have interpreted Rule 11 to require, at a minimum, that an attorney interpret the asserted patent claims and compare the accused device with those claims before filing a claim alleging infringement.1

As further explained by the court in Q-Pharma: In deciding issues not unique to our exclusive jurisdiction, we apply the law of the regional circuit in which the district court sits. See Midwest Indus., Inc. v. Karavan Trailers Inc., 175 F.3d 1356, 1359 (Fed. Cir. 1999) (en banc in relevant part). We therefore apply the law of the [relevant] Circuit to the question of sanctions under Rule 11. See Antonious v. Spalding & Evenflo Cos., 275 F.3d 1066, 1072 (Fed. Cir. 2002).2

Regarding the procedural aspects of Rule 11, the Federal Circuit case law holds: Once a litigant moves based upon non-frivolous allegations for a Rule 11 sanction, the burden of proof shifts to the non-movant to show it made a reasonable pre-suit inquiry into its claim. View Eng’g, 208 F.3d at 986 (“In bringing a claim of infringement, the patent holder, if challenged, must be prepared to demonstrate to both the court and the alleged infringer exactly why it believed before filing the claim that it had a reasonable chance of proving infringement”).3

B. Role of Patent Evaluations and Opinions in Rule 11 Sanctions The Federal Circuit “has construed Rule 11, in the context of patent infringement actions, to require that an attorney interpret the pertinent claims of the

1. Q-Pharma, Inc. v. Andrew Jergens Co., 360 F.3d 1295, 1300–1 (Fed. Cir. 2004) (emphasis added); Antonious v. Spalding & Evenflo Cos., 275 F.3d 1066, 1072 (Fed. Cir. 2002); View Eng’g, Inc. v. Robotic Vision Sys., Inc., 208 F.3d 981, 986 (Fed. Cir. 2000); Judin v. United States, 110 F.3d 780, 784 (Fed. Cir. 1997); S. Bravo Sys., Inc. v. Containment Techs. Corp., 96 F.3d 1372, 1375 (Fed. Cir. 1996). 2. Q-Pharma, 360 F.3d at 1299 (emphasis added); Digeo, Inc. v. Audible, Inc., 505 F.3d 1362, 1367–68 (Fed. Cir. 2007). 3. Digeo, 505 F.3d at 1368.


patent in issue before filing a complaint alleging patent infringement.”4 This standard has been reiterated by the Federal Circuit. For example: [S]anctions were warranted because the patentee had not performed any claim construction analysis or an infringement analysis prior to filing its counterclaim for infringement. In fact, we emphasized that “the presence of an infringement analysis plays the key role in determining the reasonableness of the pre-filing inquiry made in a patent infringement case under Rule 11.” 5

The court added: Again, our case law makes clear that the key factor in determining whether a patentee performed a reasonable pre-filing inquiry is the presence of an infringement analysis. View Eng’g, 208 F.3d at 986; see also Antonious, 275 F.3d at 1073– 74; Judin, 110 F.3d at 784; S. Bravo Sys., 96 F.3d at 1375.6

Further, the court has held that: “Although the attorney may consult with the client, Rule 11 requires that the attorney not rely solely on the client’s claim interpretation, but instead perform an independent claim analysis.”7 As explained by the Federal Circuit: Before filing counterclaims of patent infringement, Rule 11, we think, must be interpreted to require the law firm to, at a bare minimum, apply the claims of each and every patent that is being brought into the lawsuit to an accused device and conclude that there is a reasonable basis for a finding of infringement of at least one claim of each patent so asserted. The presence of an infringement analysis plays the key role in determining the reasonableness of the pre-filing inquiry made in a patent infringement case under Rule 11. Morrison performed neither a formal nor an informal analysis of any sort. This cannot be found to be a reasonable inquiry for the purpose of filing patent infringement claims. A patent suit can be an expensive proposition. Defending against baseless claims of infringement subjects the alleged infringer to undue costs—precisely the scenario Rule 11 contemplates. Performing a pre-filing assessment of the basis of each infringement claim is, therefore, extremely important. In bringing a claim of infringement, the patent holder, if challenged, must be prepared to demonstrate to both the court and the alleged infringer exactly why it believed before filing the claim that it had a reasonable chance of proving infringement.

4. Antonious, 275 F.3d at 1072 (emphasis added); Judin, 110 F.3d at 784; S. Bravo, 96 F.3d at 1375. 5. Q-Pharma, 360 F.3d 1302 (quoting View Eng’g, 208 F.3d at 986) (citations omitted, emphasis added). 6. Id. (emphasis added). 7. Antonious, 275 F.3d at 1072.

714 Chapter 20 Evaluating and Opining on One’s Own Patent Rights Failure to do so should ordinarily result in the district court expressing its broad discretion in favor of Rule 11 sanctions, at least in the absence of a sound excuse or considerable mitigating circumstances.8

Thus, three key factors come into play in determining whether a plaintiff alleging patent infringement properly complies with Rule 11: (a) was a reasonable infringement analysis including claim construction performed? (b) was the claim construction applied against the allegedly infringing product or process? and (c) was the infringement analysis done before the lawsuit was filed? Regarding the first factor, in Antonious, the Federal Circuit found that an adequate claim construction analysis had been performed, even though the court adopted a different construction: The Finnegan Henderson attorneys independently construed the patent claims before filing suit against Spalding; there is no suggestion that they simply relied on Mr. Antonious for their claim analysis. Thus, Finnegan Henderson may be sanctioned for violating Rule 11(b)(2) only if a reasonable attorney would have concluded that the claim construction proposed by the Finnegan Henderson attorneys was frivolous. . . . Spalding raised substantial arguments in rebutting Finnegan Henderson’s claim construction, including arguments based on the text of the patent, the prosecution history, and Mr. Antonious’s own testimony. Agreeing with Spalding, the district court rejected Finnegan Henderson’s proffered construction of the claim language and concluded that the limitation requiring the hosel to “extend[] into” the peripheral mass is not satisfied if, as in the Intimidator clubs, the hosel merely “tangentially touches” the portion of the club head asserted to be the peripheral mass. It is not necessary for us to decide whether Finnegan Henderson’s proffered construction was correct. It is enough to conclude, as we do, that in light of the alternative dictionary definition and the quoted passage from the 279 patent, the claim construction that Finnegan Henderson advanced in the district court was not frivolous.9

Regarding the second factor, however, the Antonious court remanded the case for the court to determine whether the claim construction had been reasonably applied against all of the allegedly infringing products.10 The patentee alleged infringement by 21 golf clubs.11 However, prior to alleging infringement

8. 9. 10. 11.

View Eng’g, 208 F.3d at 986 (emphasis added). Antonious, 275 F.3d at 1072–73 (emphasis added). Id. at 1076–77. Id. at 1074.


of the 21 clubs, the patentee’s attorneys had only compared the construed claims with a single club.12 The Federal Circuit stated: To be sure, when a number of different products are charged with infringement it is not always necessary for the plaintiff ’s attorneys to inspect each product separately to verify the facts on which the plaintiff bases its infringement allegations. At a minimum, however, the evidence uncovered by the patent holder’s investigation must be sufficient to permit a reasonable inference that all the accused products infringe.13

In remanding the case, the court noted: In this case, Finnegan Henderson admits that, apart from the single Intimidator driver brought to it by Mr. Antonious, it did not cut open and inspect any of the other Intimidator metal woods before filing suit against Spalding, and that when it submitted the October 30 letter, it still had not cut open and inspected any other of the specifically identified Intimidator metal woods. Thus, the Finnegan Henderson attorneys had no direct knowledge that any of the accused Intimidator metal woods (other than the driver brought to it by Mr. Antonious) met the “extends into and connects with a portion of said peripheral mass” limitation of claim 1, even under Finnegan Henderson’s proposed claim construction. Instead, the Finnegan Henderson attorneys inferred that the club heads of each of the other accused Intimidator metal woods had an interior structure similar to that of the driver that they had cut open. On remand, the trial court must decide whether that inference was reasonable, given the other information the Finnegan Henderson attorneys had at the time. . . . The record is unclear as to whether the Finnegan Henderson attorneys had other evidence on October 30 from which an objectively reasonable attorney would have inferred that each of the accused Intimidator metal woods had an interior structure that infringed claim 1 of the 279 patent as construed by the Finnegan Henderson attorneys. After determining what evidence the Finnegan Henderson attorneys had in their possession on October 30 regarding the structure of the 21 accused Intimidator woods, the district court must determine whether the inference of infringement was objectively reasonable. In sum, to the extent that the district court based its sanctions order on the court’s conclusion that Finnegan Henderson’s construction of claim 1 of the 279 patent was frivolous, we disagree. With respect to the question of the adequacy of Finnegan Henderson’s prefiling factual investigation, the district court did not determine whether the evidence the Finnegan Henderson attorneys had in their possession when the October 30 letter was submitted would have led a

12. Id. at 1075. 13. Id.

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Chapter 20 Evaluating and Opining on One’s Own Patent Rights reasonable attorney to believe that each of the 21 accused Spalding Intimidator metal woods satisfied the “extends into and connects with a portion of said peripheral mass” limitation in claim 1 of the 279 patent, under the Finnegan Henderson attorneys’ construction of that claim language. We therefore vacate the order of the district court and remand for the court to determine whether the Finnegan Henderson investigation was sufficiently thorough that, under Finnegan Henderson’s proposed claim construction, its factual conclusions regarding the infringement assertions satisfied the Rule 11(b)(3) prefiling investigation requirement.14

Also regarding the second factor, in Judin the Federal Circuit held that the district court had abused its discretion in not awarding sanctions under Rule 11 where the patentee had not attempted to obtain a sample of the accused product and had not compared the accused device with the patent claims prior to filing suit.15 Finally, with regard to the second factor, in Q-Pharma the Federal Circuit held that the patentee had satisfied the requirement of comparing the construed claims with the accused product where the patentee compared the construed claims with advertising statements about the accused product that the court found were sufficiently detailed to allow an infringement analysis: Jergens’ next contention is that Q-Pharma’s pre-filing infringement analysis was inadequate in that it relied solely on Jergens’ advertising statements and did not include a chemical analysis of the accused product. While it is true that Q-Pharma could have conducted a more thorough investigation before filing suit, we conclude that its pre-filing infringement analysis was supported by a sufficient evidentiary basis. Q-Pharma acquired a sample of the Curel (R) CoQ[10] lotion and reviewed its advertising and labeling, which listed the product’s ingredients and repeatedly touted the therapeutic effects of CoQ[10]. Q-Pharma concluded, however, that chemical analyses identifying the actual percentage of CoQ[10] in the accused product would not likely have changed its infringement analysis. Given Q-Pharma’s nonfrivolous interpretation of claim 1 as requiring no specified minimum amount of CoQ[10] and Jergens’ forthright assertions regarding the therapeutic effects of CoQ[10] in the accused product, we conclude that it was reasonable for Q-Pharma to believe that the accused product contained a “therapeutically effective amount” of CoQ[10] as the “principal active ingredient.”16

14. Id. at 1075–77 (emphasis added). 15. Judin v. United States, 110 F.3d 780, 784 (Fed. Cir. 1997). 16. Q-Pharma, Inc. v. Andrew Jergens Co., 360 F.3d 1295, 1301–2 (Fed. Cir. 2004).


Regarding the third factor, in Judin, the Federal Circuit affirmed Rule 11 sanctions in part where an adequate infringement analysis was not done prior to filing the complaint: By viewing the accused devices at a distance Judin was able to determine that they had a light source and a rounded tip through which the light passed, and that the light was focused in a pinpoint. That may have been sufficient to put Judin on inquiry about whether the Government was using a device that infringed his patent. But Rule 11 requires more. It requires that the inquiry be undertaken before the suit is filed, not after. Defendants have no choice when served with a complaint if they wish to avoid a default. They must undertake a defense, and that necessarily involves costs. Rule 11 prohibits imposing those costs upon a defendant absent a basis, well-grounded in fact, for bringing the suit. In this case, prior to the filing of the suit, neither Judin or his counsel had made a reasonable effort to ascertain whether the accused devices satisfied the two key claim limitations, either literally or under the doctrine of equivalents. No adequate explanation was offered for why they failed to obtain, or attempted to obtain, a sample of the accused device from the Postal Service or a vendor so that its actual design and functioning could be compared with the claims of the patent.17

C. Section 285 In addition to, and separate from Rule 11, 35 U.S.C. § 285 in the U.S. Patent Statute allows for sanctions for bad faith in patent litigation.18 Unlike Rule 11 (discussed above), the Federal Circuit “appl[ies] Federal Circuit case law to the § 285 analysis, as it is unique to patent law.”19 As explained by the Federal Circuit: The determination of whether a case is exceptional and, thus, eligible for and warranting an award of attorney fees under § 285 is a two-step process in which the district court must (1) determine whether there is clear and convincing evidence that a case is exceptional, a factual determination reviewed for clear error, and (2) if so, then determine in its discretion whether an award of attorney fees is justified. . . . If there is clear and convincing evidence that a plaintiff has brought a baseless or frivolous suit against an accused infringer, that is a sufficient basis to

17. Judin, 110 F.3d at 784 (emphasis added). 18. 35 U.S.C.S. § 285 (2009). 19. Digeo, Inc. v. Audible, Inc., 505 F.3d 1362, 1366 (Fed. Cir. 2007); Pharmacia & Upjohn Co. v. Mylan Pharms., Inc., 182 F.3d 1356, 1359 (Fed. Cir. 1999).

718 Chapter 20 Evaluating and Opining on One’s Own Patent Rights require a district court to deem the case exceptional under § 285. See Forest Labs., Inc. v. Abbott Labs., 339 F.3d 1324, 1329–30 (Fed. Cir. 2003) (“Although a lawsuit pursued in bad faith is a sufficient basis for imposing attorney fees under § 285, such bad faith requires not misleading pre-litigation conduct, but vexatious, unjustified, or frivolous litigation”).20

Further, the Federal Circuit has stated: A case may be deemed exceptional when there has been some material inappropriate conduct related to the matter in litigation, such as willful infringement, fraud or inequitable conduct in procuring the patent, misconduct during litigation, vexatious or unjustified litigation, conduct that violates Fed. R. Civ. P. 11, or like infractions. See, e.g., Cambridge Prods. Ltd. v. Penn Nutrients Inc., 962 F.2d 1048, 1050–51 (Fed. Cir. 1992); Beckman Instruments, Inc., v. LKB Produkter AB, 892 F.2d 1547, 1551 (Fed. Cir. 1989).21

Still further, the Federal Circuit has set forth a two-prong test for determining whether a case is exceptional under Section 258 “[a]bsent misconduct in conduct of the litigation or in securing the patent” in which “[s]anctions may be imposed against the patentee only if both (1) the litigation is brought in subjective bad faith, and (2) the litigation is objectively baseless.”22 Also unlike Rule 11 sanctions in which the burden is on the accused party to prove it made a reasonable inquiry, to successfully assert sanctions under Section 285, “the burden is on [accusing party] to prove by clear and convincing evidence that the case is exceptional by showing that [the accused party] brought a frivolous lawsuit. . . .”23 Moreover, as explained by the Federal Circuit: The law “recognizes a presumption that the assertion of a duly granted patent is made in good faith . . . ; this presumption is overcome only by affirmative evidence of bad faith.” Golan v. Pingel Enter., Inc., 310 F.3d 1360, 1371 (Fed. Cir. 2002) (citations omitted). To avoid summary judgment, a party claiming bad faith patent enforcement “must present affirmative evidence sufficient for a reasonable jury to conclude that the patentee acted in bad faith, in light of the burden of clear and convincing evidence that will adhere at trial.” Id.24

20. Digeo, 505 F.3d at 1366–67; Superior Fireplace Co. v. Majestic Prods. Co., 270 F.3d 1358, 1378 (Fed. Cir. 2001). 21. Brooks Furniture Mfg. v. Dutailier Int’l, Inc., 393 F.3d 1378, 1381–1382 (Fed. Cir. 2005). 22. Id.; Prof ’l Real Estate Investors v. Columbia Pictures Indus., 508 U.S. 49, 60–61 (1993); Forest Labs., Inc. v. Abbott Labs., 339 F.3d 1324, 1329–31 (Fed. Cir. 2003). 23. Digeo, 505 F.3d at 1369. 24. Springs Window Fashions LP v. Novo Indus., L.P., 323 F.3d 989, 999 (Fed. Cir. 2003).


D. Role of Patent Evaluations and Opinions in Section 285 Sanctions The Federal Circuit has held that absent misconduct in conduct of the litigation or in securing the patent, reliance by a party asserting infringement (including a declaratory judgment defendant asserting infringement) on an objectively competent opinion of patent infringement is sufficient to prevent sanctions under Section 285. For example, in Brooks, the Federal Circuit held that a declaratory judgment defendant who brought unsuccessful counterclaims of patent infringement was not subject to attorney fees under Section 285 because the party had “reasonably relied on opinions of counsel that there probably was infringement.”25 In making its holding, the Federal Circuit reversed district court sanctions under Section 285. The Federal Circuit noted that the district court described the infringement opinion relied on by the declaratory judgment defendant/counterclaimant as follows: “[A]at first glance, one might actually find this opinion to be reasonable, comprehensive and competent,” and that the attorney “also adequately considered the prior art in this instance,” that the attorney “detailed the components and embodiments” of the patent and application he was considering, and that he “provided a detailed review of the proper procedure one must follow in determining infringement, and then lengthy application of this procedure in comparing the Brooks and Town Square chairs to Dutailier’s designs.” . . . the attorney “adequately analyzed the scope of the patent claims.” . . .26

However, despite its description of the adequacy of the infringement opinion, the Brooks district court found that the declaratory judgment defendant/ counterclaimant’s reliance on the opinion was unreasonable because the opinion did not “mention every detail of the patented or the accused design.”27 In reversing the district court, the Federal Circuit held: The fact that an infringement opinion may not have mentioned every detail of the patented or the accused design does not necessarily render the opinion wrong or unreliable. The district court described the attorney’s opinion as appearing to be “reasonable, comprehensive and competent.” Such an opinion cannot be transformed into the opposite extreme of unreliability and incompetence, simply because the court reached a different conclusion on the merits of infringement. Bringing an infringement action does not become unreasonable

25. Brooks, 393 F.3d at 1383. 26. Id. 27. Id. at 1384.

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Chapter 20 Evaluating and Opining on One’s Own Patent Rights in terms of ’285 if the infringement can reasonably be disputed. Infringement is often difficult to determine, and a patentee’s ultimately incorrect view of how a court will find does not of itself establish bad faith. . . . We conclude that there was not clear and convincing evidence of bad faith by Dutailier in charging Brooks with infringement and in pressing this charge in litigation.28

Regarding the court’s two-prong test for sanctions under Section 285, the Federal Circuit noted: “Since we conclude that the first requirement (subjective bad faith) is not satisfied here, we need not decide whether the second (objectively baseless) standard was met.”29 In concluding, the Federal Circuit in Brooks again emphasized: “Although the entirety of a patentee’s conduct may be considered, enforcement of patent rights that are reasonably believed to be infringed does not entail special penalty when the patentee is unsuccessful.”30

III. Patent Evaluations and Opinions for FDA Orange Book Patent Listing The landmark Hatch-Waxman Act (“Act”) is a complex set of federal laws and regulations intended to ease and increase the entry of generic pharmaceuticals into the U.S. marketplace and to restore some of the patent protection for brand name pioneer drugs that is lost during FDA premarketing approval. Part of the Hatch-Waxman Act allows generic drug companies to obtain expedited FDA approval of generic drugs by relying on certain FDA approval data submitted for the pioneer drugs by the original FDA applicant. In order for brand name drug manufacturers to protect their FDA-approved pioneering drugs, the Act provides that brand name drug companies may list (in the so-called FDA Orange Book) U.S. patents with claims that cover FDA-approved drugs and FDA-approved methods of using drugs. Under the Act, a generic drug manufacturer may submit to the FDA an Abbreviated New Drug Application (“ANDA”). An ANDA may be submitted under various scenarios, with one of the more common involving a pioneer drug that is covered by one or more patents listed in the Orange Book. In such a case, the generic drug applicant must submit with the ANDA a Paragraph IV certification, setting forth detailed bases why the patents listed

28. Id. 29. Id. at 1381. 30. Id. at 1384; cf. Yamanouchi Pharm. Co. v. Danbury Pharmacal, Inc., 231 F.3d 1339, 1347 (Fed. Cir. 2000) (awarding attorneys fees under Section 285 where the “legal opinion contained an acknowledged error in chemistry, which was critical to its conclusion of obviousness.”).

Patent Evaluations and Opinions for FDA Orange Book Patent Listing 721

in the Orange Book are invalid and/or are not infringed by the proposed generic drug. Filing an ANDA with a Paragraph IV certification with the FDA is considered an act of patent infringement, and the pioneering drug manufacturer may sue the ANDA applicant for it. Of course, a brand name drug manufacturer’s decision of whether to list certain patents in the Orange Book—as well as whether to sue a generic drug company for filing an ANDA with a Paragraph IV certification—requires an evaluation and opinion of whether the manufacturer’s patents would be infringed by the unauthorized use or sale of a generic version of the drug.

A. Overview of the Hatch-Waxman Act In Mylan Pharmaceuticals, the Federal Circuit adeptly describes the HatchWaxman Act,31 including Orange Book patent listings, ANDAs, and Paragraph IV certifications: Under the FFDCA, a pharmaceutical company seeking to manufacture a new drug is required to file a New Drug Application (“NDA”) for consideration by the FDA. 21 U.S.C. § 355(a) (1994). Preparing an NDA is frequently a timeintensive and costly process, because among other things, it must contain detailed clinical studies of the drug’s safety and efficacy. See id. § 355(b)(1) (Supp. V 1999). The NDA must also include a list of patents which claim the drug: The applicant shall file with the application the patent number and the expiration date of any patent which claims the drug for which the applicant submitted the application or which claims a method of using such drug and with respect to which a claim of patent infringement could reasonably be asserted if a person not licensed by the owner engaged in the manufacture, use, or sale of the drug. . . . Upon approval of the application, the Secretary shall publish information submitted under [this section]. Id. If the FDA approves the NDA, it publishes a listing of the drug and patents on the drug’s approved aspects in Approved Drug Products with Therapeutic Equivalence Evaluations, otherwise known as the “Orange Book.” Id. § 355(j)(7) (A)(iii) (1994); id. § 355(b)(1); see also 21 C.F.R. § 314.53(c)(2) (2001). Because an applicant may not receive original approval for all aspects of the drug as described in the original NDA submission, once the NDA is approved, the applicant must amend the patent submission to list only the patents that meet the listing criteria for the approved drug product. 21 C.F.R. § 314.53(c)(2)(ii) (2001).

31. The complete name of the Hatch-Waxman Act, is the Hatch-Waxman Amendments to the Federal Food, Drug, and Cosmetic Act (“FFDCA”), which also included amendments to Title 35, the U.S. Patent Statute.

722 Chapter 20 Evaluating and Opining on One’s Own Patent Rights Under the Drug Price Competition and Patent Term Restoration Act of 1984, Pub. L. No. 98–417, 98 Stat. 1585 (1984), codified at 21 U.S.C. §§ 355, 360cc, and 35 U.S.C. §§ 156, 271, 282 (the “Hatch-Waxman Amendments” to the FFDCA and to Title 35 of the U.S. Code relating to patents), a pharmaceutical manufacturer seeking approval to market a generic version of a previously approved drug may submit an abbreviated new drug application (“ANDA”) to the FDA. 21 U.S.C. § 355(j) (1994). An ANDA offers an expedited approval process for generic drug manufacturers. Instead of filing a full NDA with new safety and efficacy studies, in an ANDA a generic manufacturer may rely in part on the pioneer manufacturer’s work by submitting data demonstrating the generic product’s bioequivalence with the previously approved drug. See id. § 355 (j)(2)(A) (Supp. V 1999). These provisions of the Hatch-Waxman Amendments “emerged from Congress’ efforts to balance two conflicting policy objectives: to induce name brand pharmaceutical firms to make the investments necessary to research and develop new drug products, while simultaneously enabling competitors to bring cheaper, generic copies of those drugs to market.” Abbott Labs. v. Young, 920 F.2d 984, 991 (D.C. Cir. 1990) (Edwards, J., dissenting on other grounds). Thus, Title I of the Act was intended to “make available more low cost generic drugs by establishing a generic drug approval procedure for pioneer drugs first approved after 1962.” H.R. Rep. No. 98–857, pt. 1 at 14 (1984), reprinted in 1984 U.S.C.C.A.N. 2647, 2647. Title II, on the other side of the scale, was intended to benefit pioneer drug manufacturers by “restoring . . . some of the time lost on patent life while the product is awaiting pre-market approval.” H.R. Rep. No. 98–857, pt. 1 at 15, 1984 U.S.C.C.A.N. at 2648. The Hatch-Waxman provisions concerning patent infringement are part of this balance. Under 35 U.S.C. § 271(e)(1), it is not infringement to conduct otherwise infringing acts necessary to prepare an ANDA. 35 U.S.C. § 271(e)(1) (Supp. V 1999) (“It shall not be an act of infringement to make, use, offer to sell, or sell . . . a patented invention . . . solely for uses reasonably related to the development and submission of information under a Federal law which regulates the manufacture, use, or sale of drugs.”). Under section 271(e)(2), however, a generic drug manufacturer infringes by filing an ANDA to obtain FDA approval for the purpose of marketing a generic drug product claimed in a patent before the patent expires. 35 U.S.C. § 271(e)(2) (1994) (“It shall be an act of infringement to submit . . . [an ANDA] . . . if the purpose of such submission is to obtain [FDA] approval . . . to engage in the commercial manufacture, use, or sale of a drug . . . claimed in a patent before the expiration of such patent.”) (emphasis added). Despite this provision, not all ANDA applicants can be sued immediately for infringement; moreover, they cannot sue immediately for declaratory judgment with respect to the patent, as further discussed below. As part of the ANDA process, an applicant seeking to market a generic version of a listed drug must make a certification as to each patent listed in the Orange Book which “claims the listed drug . . . or which claims a use for such listed drug for which the applicant is seeking approval.” 21 U.S.C. § 355(j)(2)(A)(vii) (1994).

Patent Evaluations and Opinions for FDA Orange Book Patent Listing 723 Further, according to regulations enacted by the FDA, an applicant whose ANDA is pending when a pioneer drug manufacturer lists additional patents in the Orange Book must make certifications as to the new patents, unless the additional patents are submitted more than thirty days after they were issued. 21 C.F.R. § 314.94(a)(12)(vi) (2001). In either case, the applicant must certify either that: (I) no such patent information has been submitted to the FDA; (II) the patent has expired; (III) the patent is set to expire on a certain date; or (IV) such patent is invalid or will not be infringed by the manufacture, use, or sale of the new generic drug for which the ANDA is submitted. 21 U.S.C. § 355(j)(2)(A)(vii)(I–IV) (1994). These are commonly referred to as Paragraph I, II, III, and IV certifications. Further, if one of the listed patents is a method-of-use patent which does not claim a use for which the applicant is seeking approval, the applicant must make a statement to that effect (a “Section viii Statement”). Id. § 355(j)(2)(A)(viii). An ANDA containing a Paragraph I or II certification may be approved without additional delay. See 21 U.S.C. § 355(j)(5)(B)(i) (Supp. V 1999). An ANDA containing a Paragraph III certification indicates that the applicant does not intend to market the drug until after the expiration of the patent, and the approval of the ANDA cannot be made final until the patent expires. Id. § 355(j) (5)(B)(ii). When an ANDA contains a Paragraph IV certification, the ANDA applicant must give notice to the patentee and must provide detailed bases for its belief that the patent is invalid, unenforceable, or not infringed. Id. § 355(j)(2)(B)(i); 21 C.F.R. § 314.95(c)(6) (2001). The patentee is then given forty-five days to sue the ANDA applicant for infringement. 21 U.S.C. § 355(j)(5)(B)(iii) (Supp. V 1999). If the patentee does not file suit, the application may be approved. If the patentee files suit within that period, the FDA may not approve the ANDA until the expiration of the patent, judicial resolution of the infringement suit, a judicial determination that the patent is invalid or unenforceable, or thirty months from the patentee’s receipt of notice, whichever is earliest. Id.; 21 C.F.R. § 314.107(b)(1)(iv) (2001). The court in which the suit is pending may order a shorter or longer stay on the approval time if “either party to the action fails to reasonably cooperate in expediting the action.” 21 U.S.C. § 355(j)(5)(B)(iii) (Supp. V 1999). Moreover, the availability of declaratory judgment actions is limited: “Until the expiration of forty-five days from the date the notice made under paragraph (2)(B)(i) is received, no action may be brought under section 2201 of Title 28, for a declaratory judgment with respect to the patent.” Id. These provisions give the pioneer manufacturer the first opportunity to file suit against the ANDA applicant for infringement, and may substantially delay the ANDA approval during the pendency of the litigation. The Hatch-Waxman Amendments, however, do not include any explicit provisions either enabling or prohibiting an action to challenge a patentee’s listing of a patent in the Orange Book. By regulation, the FDA has provided a limited process for disputing the accuracy or relevance of patent information

724 Chapter 20 Evaluating and Opining on One’s Own Patent Rights submitted to the FDA and listed in the Orange Book. 21 C.F.R. § 314.53(f) (2001). One who questions the accuracy of the patent information may write to the FDA, and the FDA will request that the applicant confirm the information. Id. According to the FDA’s regulations, however, “unless the application holder withdraws or amends its patent information in response to FDA’s request, the agency will not change the patent information in the list” and an ANDA applicant must still make certifications for each patent despite its disagreement. Id. 32

B. Determining Whether to List Patents in the FDA Orange Book and Whether to Sue for Patent Infringement upon a Third Party Filing an ANDA with a Paragraph IV Certification The test for whether to include a patent in the Orange Book is based on infringement. Section 355(b)(1) states, in relevant part: The applicant shall file with the application the patent number and the expiration date of any patent which claims the drug for which the applicant submitted the application or which claims a method of using such drug and with respect to which a claim of patent infringement could reasonably be asserted if a person not licensed by the owner engaged in the manufacture, use, or sale of the drug.33,34

Therefore, to comply with FDA regulations for determining whether to list a patent in the Orange Book, an infringement evaluation or opinion must be performed to determine whether the patent would be infringed by making, using, or selling a generic drug. This should include the elements required in any competent evaluation or opinion of infringement of a U.S. patent, including: (a) an evaluation of the intrinsic evidence (the specification, claims, prior art, and prosecution history), and extrinsic evidence (if necessary and appropriate); (b) claim construction based on the intrinsic and, if necessary and appropriate, extrinsic evidence; and (c) application of the construed claims to the generic version of the FDA approved drug.

32. Mylan Pharms., Inc. v. Thompson, 268 F.3d 1323, 1325–27 (Fed. Cir. 2001) (emphasis added); Apotex, Inc. v. Thompson, 347 F.3d 1335, 1337–40 (Fed. Cir. 2003). 33. 35 U.S.C.S. § 355(b)(1) (2009) (emphasis added). 34. The same test applies under 35 U.S.C. § 355(c)(2) for determining patents be listed in the Orange Book for patents that issue after final FDA approval and original Orange Book publication. See 21 C.F.R. § 314.53 for further information on determining whether a patent should be included in the Orange Book.

Patent Evaluations and Opinions for FDA Orange Book Patent Listing 725

C. Accountability for Proper Orange Book Listing Importantly, the Federal Circuit has repeatedly held that the Hatch-Waxman Act does not provide a private right of action.35 Therefore, if a generic drug applicant disagrees as to whether a patent should be included in the Orange Book for a given drug, the generic drug applicant cannot challenge in court the correctness of the FDA’s decision to list the patent.36 Only the FDA may challenge the correctness of the inclusion of a patent in the Orange Book— and this authority is limited.37 As stated by the Federal Circuit in Barr Labs: In our decision in Mylan we confronted a claim that a particular patent listing in the Orange Book was improper because the listed patent did not claim a drug for which an NDA had been submitted, as required by 21 U.S.C. § 355(b)(1). Mylan, 268 F.3d at 1332. In Mylan, the ANDA applicant sued the FDA and the NDA holder, alleging that the pertinent patent had been improperly listed in the Orange Book, and moved for declaratory and injunctive relief requiring the NDA holder to take measures to delist the patent from the Orange Book and requiring the FDA to immediately approve the ANDA. Id. at 1328. The district court issued injunctions requiring the private defendant to withdraw the Orange Book listing and requiring the FDA to approve the ANDA. Mylan Pharms., Inc. v. Thompson, 139 F. Supp. 2d 1, 29–30 (D.D.C. 2001). The private defendant appealed, arguing that the FFDCA did not grant a private right of action, but the FDA did not appeal. On appeal, the appellee-ANDA applicant (the declaratory judgment plaintiff) urged that its action was proper because it arose under the patent laws (Title 35 of the United States Code). The ANDA applicant claimed that its declaratory judgment action asserted a defense to patent infringement, because listing in the Orange Book was an element of any patent infringement cause of action which the NDA holder might have asserted. Mylan, 268 F.3d at 1330–31. We rejected the ANDA applicant’s attempt to bring its action under the patent laws because we concluded that its cause of action was not tied to any recognized patent infringement defense but rather was “an attempt to assert a private right of action for ‘delisting’ under the FFDCA.” Id. at 1332. We also made clear that there was no private cause of action for delisting under the FFDCA. Id. We reaffirmed this holding in Andrx. In Andrx, in an infringement action between a patentee and an ANDA filer, the district court shortened the thirty-month stay period, citing 21 U.S.C. § 355(j)(5)(B)(iii), because it found that the patentee’s listing of the second patent in the Orange Book was done

35. Mylan, 268 F.3d at 1323; Apotex, 347 F.3d at 1335; 3M v. Barr Labs., Inc., 289 F.3d 775, 783 (Fed. Cir. 2002). 36. Mylan, 268 F.3d at 1323; Apotex, 347 F.3d at 1335; 3M v. Barr Labs., Inc., 289 F.3d 775, 783 (Fed. Cir. 2002). 37. Mylan, 268 F.3d at 1323; Apotex, 347 F.3d at 1335; 3M v. Barr Labs., Inc., 289 F.3d 775, 783 (Fed. Cir. 2002).

726 Chapter 20 Evaluating and Opining on One’s Own Patent Rights improperly to delay the resolution of the patent actions between the parties. We reversed, holding that “the district court had no authority in the infringement action, as opposed to an action under the Administrative Procedure Act, to shorten the thirty-month stay because of allegedly improper conduct before the FDA.” Andrx at 1376. We held that a claim of improper conduct in the FDA proceeding was required to be raised initially before the FDA itself and thereafter in a judicial review proceeding brought under the APA. Id. at 1379.38

D. Accountability for Initiating a Patent Infringement Suit for an ANDA Paragraph IV Certification Although the Hatch-Waxman Act does not provide a private right of action for a third party to challenge directly the sufficiency of an Orange Book listing, suing for patent infringement of an Orange Book-listed patent by filing of an ANDA Paragraph IV certification requires that the patentee conduct a complete and objectively competent infringement evaluation and opinion. This includes claim construction based on the intrinsic (and if relevant, extrinsic) evidence and comparison of the construed claims with the ANDA proposed generic drug. Because such a challenge is essentially an ordinary patent infringement action, Rule 11 and Section 285 apply and require adequate pre-filing investigation of infringement.39

IV. Patent Evaluations and Opinions for Obtaining Preliminary Injunctions When a patentee sues for patent infringement, the patentee may move for a preliminary injunction against any alleged post-filing infringement. A court’s

38. Barr Labs., 289 F.3d at 782–83 (emphasis added). 39. E.g., see Yamanouchi Pharm. Co. v. Danbury Pharmacal, Inc., 231 F.3d 1339, 1346 (Fed. Cir. 2000) (awarding attorney’s fees to Orange Book patentee where ANDA applicant filed baseless ANDA Paragraph IV certification (including relying on invalidity opinion that was technically incorrect in critical area) and engaged in litigation misconduct.); Takeda Chem. Indus. v. Mylan Labs., 549 F.3d 1381, 1384, 1386–88 (Fed. Cir. 2008) (“When a patent has been infringed by the filing of an ANDA, 35 U.S.C. § 271(e)(4) provides for the grant of attorney fees under 35 U.S.C. § 285, which in turn allows the court to award reasonable attorney fees to a prevailing party in exceptional cases.” And, awarding over $16 million in attorney’s fees to Orange Book patentee where ANDA applicant filed baseless ANDA Paragraph IV certification (including relying on technically incorrect analysis of obviousness) and engaged in litigation misconduct.).

Patent Evaluations and Opinions for Obtaining Preliminary Injunctions

decision to grant a preliminary injunction is based on its assessment of four factors: “[(a)] the likelihood of the patentee’s success on the merits[; (b)] irreparable harm if the injunction is not granted[; (c)] the balance of hardships between the parties[;] and [(d)] the public interest.”40

A. Assessing the Likelihood of Success on the Merits Requires an Infringement and Validity Analysis In patent infringement actions, assessing the first factor of the preliminary injunction analysis, the likelihood of the patentee’s success on the merits, requires an infringement and validity analysis. This necessarily includes the patentee reviewing the intrinsic evidence including the specification, claims, prosecution history and prior art (and if necessary, extrinsic evidence), then engaging in claim construction, comparison of the construed claims with the potentially infringing product or process for an infringement determination, and comparison of the construed claims with the prior art and support in the specification for a validity determination. In Oakley, the Federal Circuit described this process as follows: An assessment of the likelihood of infringement, like a determination of patent infringement at a later stage in litigation, requires a two-step analysis. “First, the court determines the scope and meaning of the patent claims asserted . . . [Secondly,] the properly construed claims are compared to the allegedly infringing device.” Cybor Corp. v. FAS Techs., Inc., 138 F.3d 1448, 1454 (Fed. Cir. 1998) (en banc) (citations omitted). An assessment of the likelihood of validity of a patent claim over the prior art also involves a two-step process. The first step is the same claim construction implicated in an infringement analysis. See Smiths Indus. Med. Sys., Inc. v. Vital Signs, Inc., 183 F.3d 1347, 1353 (Fed. Cir. 1999). The second step involves a comparison of the asserted claims with the prior art. A determination that a claim is invalid as being anticipated or lacking novelty under 35 U.S.C. § 102 requires a finding that “each and every limitation is found either expressly or

40. Oakley, Inc. v. Sunglass Hut Int’l, 316 F.3d 1331, 1338-1339 (Fed. Cir. 2003) (citing Amazon. com, Inc. v. Barnesandnoble.com, Inc., 239 F.3d 1343, 1350 (Fed. Cir. 2001)); Abbott Labs. v. Sandoz, Inc., 544 F.3d 1341, 1344 (Fed. Cir. 2008); H.H. Robertson Co. v. United Steel Deck, Inc., 820 F.2d 384, 387–88 (Fed. Cir. 1987).

727

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Chapter 20 Evaluating and Opining on One’s Own Patent Rights inherently in a single prior art reference.” Celeritas Techs. Inc. v. Rockwell Int’l Corp., 150 F.3d 1354, 1360 (Fed. Cir. 1998).41

In Amazon.com, the Federal Circuit explained: Of course, whether performed at the preliminary injunction stage or at some later stage in the course of a particular case, infringement and validity analyses must be performed on a claim-by-claim basis. See, e.g., Bayer AG v. Elan Pharm. Research Corp., 212 F.3d 1241, 1247 (Fed. Cir. 2000) (“Literal infringement requires the patentee to prove that the accused device contains each limitation of the asserted claim(s).” (citations omitted)); Ortho Pharm. Corp. v. Smith, 959 F.2d 936, 942 (Fed. Cir. 1992) (concluding that all grounds of invalidity must be evaluated against individual claims, as required by the plain language of 35 U.S.C. § 282 (1994)). Therefore, in cases involving multiple patent claims, to demonstrate a likelihood of success on the merits, the patentee must demonstrate that it will likely prove infringement of one or more claims of the patentsin-suit, and that at least one of those same allegedly infringed claims will also likely withstand the validity challenges presented by the accused infringer. . . . It is well settled that an infringement analysis involves two steps: the claim scope is first determined, and then the properly construed claim is compared with the accused device to determine whether all of the claim limitations are present either literally or by a substantial equivalent. See, e.g., Young Dental Mfg. Co. v. Q3 Special Prods., Inc., 112 F.3d 1137, 1141 (Fed. Cir. 1997). Conceptually, the first step of an invalidity analysis based on anticipation and/or obviousness in view of prior art references is no different from that of an infringement analysis. “It is elementary in patent law that, in determining whether a patent is valid and, if valid, infringed, the first step is to determine the meaning and scope of each claim in suit.” Lemelson v. Gen. Mills, Inc., 968 F.2d 1202, 1206 (Fed. Cir. 1992). “A claim must be construed before determining its validity just as it is first construed before deciding infringement.” Markman v. Westview Instruments, Inc., 52 F.3d 967, 996 n.7 (Fed. Cir. 1995) (Mayer, J., concurring), aff ’d, 517 U.S. 370, 134 L. Ed. 2d 577, 116 S. Ct. 1384 (1996). Only when a claim is properly understood can a determination be made whether the claim “reads on” an accused device or method, or whether the prior art anticipates and/or renders obvious the claimed invention. See id. Because the claims of a patent measure the invention at issue, the claims must be interpreted and given the same meaning for purposes of both validity and infringement analyses. See SmithKline Diagnostics, Inc. v. Helena Labs. Corp., 859 F.2d

41. Oakley, 316 F.3d at 1339; Sandoz, 544 F.3d at 1364 (“The correct standard is not whether a substantial question has been raised, but whether the patentee is likely to succeed on the merits, upon application of the standards of proof that will prevail at trial.”).

Patent Evaluations and Opinions for Obtaining Preliminary Injunctions 878, 882 (Fed. Cir. 1988). “A patent may not, like a ‘nose of wax,’ be twisted one way to avoid anticipation and another to find infringement.” Sterner Lighting, Inc. v. Allied Elec. Supply, Inc., 431 F.2d 539, 544 (5th Cir. 1970) (citing White v. Dunbar, 119 U.S. 47, 51, 30 L. Ed. 303, 7 S. Ct. 72 (1886)). The court must properly interpret the claims, because an improper claim construction may distort the infringement and validity analyses. See Bausch & Lomb, Inc. v. Barnes-Hind/ Hydrocurve, Inc., 796 F.2d 443, 450 (Fed. Cir. 1986).42

Therefore, in addition to Rule 11 and Section 285 considerations, one of the reasons a patentee suing for infringement should obtain an evaluation or opinion of infringement and validity prior to filing suit is so that it can quickly and effectively move for a preliminary injunction. Finally, if there is a chance that an infringement defendant may bring counterclaims of infringement of one of more of its own patents, it is important that opinions of noninfringement and/or invalidity of the possibly counterclaim-asserted patents be obtained as early as possible. These opinions and opinion counsel should be kept separate from trial counsel. As discussed in detail in Chapter 24 (waiver), in In re Seagate, the Federal Circuit held en banc that as long as trial counsel and opinion counsel are separate, “as a general proposition . . . asserting the advice of counsel defense and disclosing opinions of opinion counsel do not constitute waiver of the attorney-client privilege for communications with trial counsel,” and “as a general proposition, relying on opinion counsel’s work product does not waive work product immunity with respect to trial counsel.”43 Further, the en banc Seagate Federal Circuit had the following comments about opinions of noninfringement and/or invalidity as they relate to prelitigation conduct, post-litigation conduct, and evidence for obtaining (or avoiding) a preliminary injunction: Further outweighing any benefit of extending waiver to trial counsel is the realization that in ordinary circumstances, willfulness will depend on an infringer’s prelitigation conduct. It is certainly true that patent infringement is an ongoing offense that can continue after litigation has commenced. However, when a complaint is filed, a patentee must have a good faith basis for alleging willful infringement. Fed. R. Civ. Pro. 8, 11(b). So a willfulness claim asserted in the original complaint must necessarily be grounded exclusively in the accused infringer’s pre-filing conduct. By contrast, when an accused infringer’s post-filing conduct is reckless, a patentee can move for a preliminary injunction, which generally provides an adequate remedy for combating post-filing willful infringement.

42. Amazon.com, 239 F.3d at 1351; Sandoz, 544 F.3d at 1364. 43. In re Seagate Tech, L.L.C., 497 F.3d 1360, 1374, 1376 (Fed. Cir. 2007) (en banc).

729

730 Chapter 20 Evaluating and Opining on One’s Own Patent Rights See 35 U.S.C. § 283; Amazon.com, Inc. v. Barnesandnoble.com, Inc., 239 F.3d 1343, 1350 (Fed. Cir. 2001). A patentee who does not attempt to stop an accused infringer’s activities in this manner should not be allowed to accrue enhanced damages based solely on the infringer’s post-filing conduct. Similarly, if a patentee attempts to secure injunctive relief but fails, it is likely the infringement did not rise to the level of recklessness. We fully recognize that an accused infringer may avoid a preliminary injunction by showing only a substantial question as to invalidity, as opposed to the higher clear and convincing standard required to prevail on the merits. Amazon. com, 239 F.3d at 1359 (“Vulnerability is the issue at the preliminary injunction stage, while validity is the issue at trial. The showing of a substantial question as to invalidity thus requires less proof than the clear and convincing showing necessary to establish invalidity itself.”). However, this lessened showing simply accords with the requirement that recklessness must be shown to recover enhanced damages. A substantial question about invalidity or infringement is likely sufficient not only to avoid a preliminary injunction, but also a charge of willfulness based on post-filing conduct. We also recognize that in some cases a patentee may be denied a preliminary injunction despite establishing a likelihood of success on the merits, such as when the remaining factors are considered and balanced. In that event, whether a willfulness claim based on conduct occurring solely after litigation began is sustainable will depend on the facts of each case.44

V. Patent Evaluations and Opinions for Readiness in “Rocket Docket” Jurisdictions and ITC Investigations So-called “rocket docket” federal district courts and International Trade Commission (“ITC”) investigations each present venues in which patent infringement actions run at a fast pace. In these venues, well-prepared patent holders may take advantage of this fast pace of infringement adjudication to obtain significant advantages over ill-prepared potential infringers. However, due to the fast pace in these venues, patent holders charging infringement need to be well prepared prior to filing infringement actions. This includes having detailed, complete, and up-to-date evaluations and opinions of infringement prior to bringing actions against third parties.

44. Id. at 1374.

Patent Evaluations and Opinions for Readiness 731

A. “Rocket Docket” Jurisdictions Patent “rocket docket” federal district court jurisdictions are known for their rapid pace and short time-to-trial statistics for patent infringement actions. Currently, the Eastern District of Virginia and the Western District of Wisconsin have the shortest time-to-trial statistics for these actions, with both jurisdictions having median time-to-trial statistics of less than one year.45 This compares with an overall median time-to-trial of over two years for all federal jurisdictions.46 Clearly, the readiness of a patentee asserting infringement in one of these rapid-paced jurisdictions may have a significant effect on the case. Indeed, patent holders generally enjoy statistically higher success rates as time-to-trial lengths decrease.47 Therefore, well-prepared patent holders may want to take advantage of the fast pace of infringement actions by filing suit in “rocket docket” jurisdictions, if possible. One advantage this can give a patent holder is the luxury of time to prepare a thorough prefiling infringement evaluation and opinion. Then, the patent holder may sue for infringement when it is thoroughly ready to do so. This may allow a patent holder the possibility of catching a potential infringer unprepared so it has to scramble to mount a fast and unexpected defense. Still further, this may increase the chances of a patent holder obtaining enhanced damages for willful infringement if the potential infringer has not obtained advice of counsel of patent noninfringement and/or invalidity prior to beginning infringement or being sued.

B. ITC Patent Infringement Investigations ITC patent infringement investigations are investigations brought by the ITC, a quasi-judicial, independent federal agency responsible for conducting investigations of matters related to U.S. trade.48 Patent infringement actions are brought by the ITC under Section 337, as amended, of the Tariff Act of 1930 (19 U.S.C. § 1337).49 ITC investigations differ from patent infringement actions brought in U.S. district courts in many ways. For example:50 (a) the proceedings are heard by an administrative law judge, as opposed to a federal district court judge;

45. See PricewaterhouseCoopers 2008 Patent Litigation Study (0.88 years for the Eastern District of Virginia, 0.91 years for the Western District of Wisconsin). 46. Id. 47. Id. (with the exception of extremely long (i.e., greater than four years) time-to-trial lengths). 48. See http://www.usitc.gov/. 49. 19 U.S.C.S. § 1337 (2009). 50. See http://www.usitc.gov/.


(b) the ITC will not hear counterclaims such as patent invalidity;51 (c) only injunctive relief is available,52 as opposed to injunctive relief and monetary damages that are available in federal court; (d) there are three parties to an ITC investigation: the party filing the complaint with the ITC (the complainant), the party or parties accused of importing the infringing devices (the respondents), and ITC investigative staff attorneys, who represent the public interest and will take a position on the issues; (e) the complainant must be a U.S. domestic industry; (f) there are no juries in ITC investigations; (g) personal jurisdiction over the respondents is not necessary, as the ITC has in rem jurisdiction over the imported products themselves; and (h) an infringement action may be brought in U.S. district court at the same time that an ITC investigation is proceeding. In addition, the two most significant differences between federal court patent infringement actions and ITC infringement investigations regarding patent evaluations and opinions are:53 (a) ITC proceedings move much faster than most federal patent infringement lawsuits, with a typical ITC investigation taking 12 to 15 months from initiation to completion, as compared with a median time-to-trial of more than two years for actions brought in federal courts;54 and (b) the ITC complaint is a fact pleading that must provide a detailed showing of how the accused article infringes a valid and enforceable U.S. patent, as opposed to the simple notice pleading in federal court. For patent holders, the advantages of the fast pace of ITC proceedings are similar to those discussed above for infringement suits brought in “rocket docket” federal courts. For example, a patent holder may have the luxury of time to prepare a thorough prefiling infringement evaluation and opinion. When it is thoroughly ready to proceed, the patent holder may call for an ITC investigation. This means a patent holder may be able to catch a potential infringer unprepared and off-guard so that it has to scramble to mount a fast and unexpected defense. Still further, if personal jurisdiction is available, the patent holder may bring both an ITC investigation and a federal court infringement action against the potential infringer, in effect, hitting the potential infringer with a “one-two” punch. Of course, the fact pleading nature of an ITC investigation complaint requires that the patent holder provide a more detailed complaint to initiate an ITC proceeding than is required for the notice pleading required to bring

51. Id. (counterclaims for patent invalidity may be brought by the accused infringer. However, they must be removed to federal court and cannot delay the ITC investigation). 52. Id. (e.g., exclusion orders barring importation into the United States of infringing items, enforced by U.S. Customs & Border Protection). 53. Id. 54. See PricewaterhouseCoopers 2008 Patent Litigation.

Practice Points

a patent infringement action in federal court. However, as discussed above for compliance with Rule 11 and Section 285, a well-prepared patent holder should always make a diligent investigation prior to filing for any patent infringement.

VI. Practice Points A. Prefiling Infringement Evaluations and Opinions Must Be Done to Comply with Rule 11 and Section 285 Infringement evaluations and opinions must be done on patents asserted in infringement actions to comply with Rule 11 and Section 285. The evaluations and opinions must be completed before filing the infringement action. Further, they must comport with the standards for objectively reasonable and competent evaluations and opinions. This includes objective claim construction based on the intrinsic (and if relevant, extrinsic) evidence, and application of the construed claims against the alleged infringing product or process. It is important that the scope of the prefiling infringement analysis be commensurate with the scope of the asserted infringement. Where a large number of different products or processes potentially infringe, it may not be necessary to compare each one with the construed claims. However, the construed claims must be compared with an objectively reasonable number of the accused infringing products or processes. It may not be sufficient to evaluate infringement only for a small subset of the accused infringing products or processes. Keep in mind that counterclaims of infringement require the same degree of evaluation and opinion of infringement as do “regular” claims of infringement.

B. Determining Whether to List a Patent in the Orange Book Requires a Competent Infringement Evaluation and Opinion Determining whether to list a patent in the FDA Orange Book requires a complete and objectively competent infringement evaluation and opinion. This includes claim construction based on the intrinsic (and if relevant, extrinsic) evidence and comparison of the construed claims with a generic version of the FDA-approved drug. However, the Hatch-Waxman Act does not provide a private right of action for a third party to directly challenge the sufficiency of an Orange Book listing.

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C. Determining Whether to Sue for Patent Infringement of an Orange Book-Listed Patent by an ANDA Paragraph IV Certification Requires a Competent Infringement Evaluation and Opinion to Comply with Rule 11 and Section 285 Although the Hatch-Waxman Act does not provide a private right of action for a third party to challenge directly the sufficiency of an Orange Book listing, suing for patent infringement of an Orange Book-listed patent by the filing of an ANDA Paragraph IV certification requires a complete and objectively competent infringement evaluation and opinion by the patentee. This includes claim construction based on the intrinsic (and if relevant, extrinsic) evidence, and comparison of the construed claims with the ANDA proposed generic drug. Because such a challenge is essentially an ordinary patent infringement action, Rule 11 and Section 285 apply and require adequate prefiling investigation of infringement.

D. A Noninfringement and/or Invalidity Opinion is Necessary to Obtain a Preliminary Injunction Obtaining a preliminary injunction in a patent infringement case requires proving a likelihood of success on the merits. This necessarily includes an objectively reasonable evaluation and opinion of infringement and validity, including review of the intrinsic (and if relevant, extrinsic) evidence, claim construction, comparison of the construed claims with the potentially infringing product or process for an infringement determination, and comparison of the construed claims with the prior art and support in the specification for a validity determination.

E. Be Aware of the Possibility of Counterclaims of Patent Infringement Keep in mind that if there is a chance that an infringement defendant may bring counterclaims of infringement of one of more of its own patents, it is important to have noninfringement and/or invalidity opinions of the potentially infringed patents before any infringing activity begins and before the lawsuit is filed. Additionally, if possible, opinion counsel should be kept separate from trial counsel. As discussed in detail in Chapter 24 (waiver), in In re Seagate, the Federal Circuit held en banc that as long as trial counsel and opinion counsel are separate, “as a general proposition . . . asserting the advice of counsel defense and disclosing opinions of opinion counsel do not constitute

Practice Points

waiver of the attorney-client privilege for communications with trial counsel,” and “as a general proposition, relying on opinion counsel’s work product does not waive work product immunity with respect to trial counsel.”55

F. Beware of, Be Prepared for, and if Desired Use “Rocket Docket” Jurisdictions and ITC Investigations Patent holders should be aware of the potential benefits of bringing infringement actions in so-called “rocket docket” jurisdictions and via ITC investigations. Both proceedings provide fast-paced infringement actions. These may provide a patent holder with the luxury of time to prepare a thorough prefiling infringement evaluation and opinion. When the patent holder is thoroughly ready to proceed, it may sue and/or call for an ITC investigation (as under certain circumstances, a patent holder may bring both a patent infringement suit in federal court and an ITC investigation simultaneously). These fast paced actions may provide a patent holder with the possibility of catching a potential infringer unprepared and off-guard so that it has to scramble to mount a fast and unexpected defense.


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CHAP T ER

21 Evaluating and Opining on One’s Own Patent Rights Prefiling Evaluations and Opinions for Post-Grant Patent Corrections Including Reexamination, Reissue, Disclaimer, Certificates of Correction, and Other Issues

I. Reexamination

739

A. Role of Patent Evaluations and Opinions of Third Party Patents in Reexamination II. Reissue

746 747

A. Role of Patent Evaluations and Opinions of Third Party Patents in Reissue III. Disclaimer

757 759

A. Role of Patent Evaluations and Opinions in Section 253 Disclaimers IV. Certificates of Correction

762 763

A. Role of Patent Evaluations and Opinions in Certificates of Correction V. Citation of Prior Art

772 773

A. Role of Patent Evaluations and Opinions for Citing Art Under Section 301

775

VI. Citation of Court Decisions

776


778

A. Prefiling Infringement Evaluations and Opinions Should Be Done Prior to Requesting Reexamination

778

B. Reexamination Must Be Based on Documentary Prior Art, but May Also Include, in Conjunction with Documentary Prior Art, Admissions by the Patentee (in Prosecution or Court) Related to Other Invalidity Bases

779

737

738

Chapter 21 Evaluating and Opining on One’s Own Patent Rights C. Prefiling Infringement Evaluations and Opinions Should Be Done Prior to Requesting Reissue, Including Paying Close Attention to the Limitations on Reissue, Including the Recapture Rule

779

D. Broadening Reissue Applications Must Be Filed Within Two Years of Issuance of the Original Patent

780

E. Where Possible, Disclaimer Considerations Should Be Coordinated with Broadening Reissue Requirements

781

F. Use Caution and Careful Prefiling Evaluation and Opinion Before Disclaiming Under Section 253

781

G. Certificates of Correction Should Only Be Used in Appropriate Circumstances and Never as Substitutes for Other Post-Issuance Correction Means

782

H. Remember That Prior Art May Be Cited in the Prosecution History of an Issued Patent Without Requesting a Reexamination or Reissue, but Use Caution

783

I. Remember to Cite Favorable Court Decisions in the Prosecution History of One’s Own Patents

784

J. Correction of a Patent by the U.S. Patent Office Does Not Ensure Validity of the Correction in Court

784

Reexamination 739

Usage Note: As discussed in this chapter, correcting one’s own issued U.S. patents through reexamination, reissue, disclaimer, and certificates of correction requires careful prefiling patent evaluations and opinions. These evaluations and opinions require at least invalidity analyses (including evaluations of prior art, claim construction, and application of prior art to construed claims) as well as careful claim scope analysis, especially to determine whether corrections broaden the scope of uncorrected claims. Other chapters of relevance to this topic include Chapters 2–10 (patent law principles including claim construction and patent validity).

I. Reexamination Reexaminations are procedures conducted in and by the U.S. Patent Office wherein the Patent Office reexamines the patentability of issued patents when documentary prior art raises a substantial new question of patentability of at least one claim of an issued patent. The patent owner and third parties may request reexamination. Chapter 15 discusses reexamination requests by third parties, including both ex parte and inter partes reexamination. As a request for reexamination by a patent holder is necessarily an ex parte procedure, this chapter does not cover inter partes reexamination. A patentee requests an ex parte reexamination by filing a Request for Reexamination and paying a Reexamination Request Fee.1 A Request for Reexamination may be filed at any time during which an issued patent is enforceable.2 A Request for Reexamination, whether made by the patent owner or a third party, will only be ordered based on documentary prior art such as U.S. patents and printed publications under 35 U.S.C. § 102(b).3 However, admissions by the patent owner, whether in the patent’s record or in court relating to any prior art (including prior sale and public use) may be considered by the Examiner in reexamination if considered in conjunction with patents or other printed publications.4

1. 35 U.S.C.S. § 302 (2009). 2. 21 C.F.R. § 1.501 (2009) (A Request for Reexamination may be filed “[a]t any time during the enforceability of a patent. . . .”); M.P.E.P. § 2204 (8th ed., vol. 2, 2008) (“The period of enforceability is the length of the term of the patent plus the 6 years under the statute of limitations for bringing an infringement action (35 U.S.C. 286). In addition, if litigation is instituted within the period of the statute of limitations, citations may be submitted after the statute of limitations has expired, as long as the patent is still enforceable against someone.”). 3. 35 U.S.C.S. § 303 (2009); Quad Envtl. Techs. Corp. v. Union Sanitary Dist., 946 F.2d 870, 875 (Fed. Cir. 1991) (“[Q]uestions of public use and on sale were explicitly excluded by statute from those issues on which reexamination could be obtained.”). 4. Id. (“[M.P.E.P. § 2217 was revised . . . to allow consideration of admissions of public use or sale . . . ‘An admission relating to any prior art (i.e., on sale, public use, etc.) established in the


Still further, a Request for Reexamination must raise a “substantial new question of patentability affecting [at least one] claim of the patent concerned.”5 This requirement does not necessarily mean that prior art considered by the Patent Office in examining the subject patent cannot be relied upon in a Request for Reexamination.6 As explained by the Federal Circuit: The [Patent and Trademark Office], however, may only grant a reexamination request if it determines that “a substantial new question of patentability affecting any claim of the patent concerned is raised by the request.” . . . Section 303(a) now mandates that “the existence of a substantial new question of patentability is not precluded by the fact that a patent or printed publication was previously cited by or to the Office or considered by the Office.” Thus, under § 303(a) as amended, a reference may present a substantial new question even if the examiner considered or cited a reference for one purpose in earlier proceedings. Nothing in the statute creates an exception to this rule for references considered in the context of a rejection of prior claims. . . . The 2002 amendment removes the focus of the new question inquiry from whether the reference was previously considered, and returns it to whether the particular question of patentability presented by the reference in reexamination was previously evaluated by the PTO. As was true before the amendment, an “argument already decided by the Office, whether during the original examination or an earlier reexamination” cannot raise a new question of patentability. H.R. Rep. No. 96–1307; see also H.R. Rep. No. 107–120, at 3 (explaining that the amendment did not diminish the “substantial new question requirement” and that “[t]he issue raised must be more than just questioning the judgment of the examiner.”). As we explained in In re Recreative Technologies Corp., the substantial new question requirement “guard[s] against simply repeating the prior examination on the same issues and arguments” and bars “a second examination, on the identical ground that had previously been raised and overcome.” 83 F.3d at 1396–97. As we recognized even in In re Portola Packaging, a single reference might, alone or in combination, create multiple possible grounds of rejection and thus raise more than one “question of patentability.”7

record or in court may be used by the examiner in combination with patents or printed publications in a reexamination proceeding.’ ”) (emphasis in original) (quoting M.P.E.P. § 2217 (5th ed., rev. 12, 1989)). 5. 35 U.S.C.S. § 303 (2009). 6. Id. (“The existence of a substantial new question of patentability is not precluded by the fact that a patent or printed publication was previously cited by or to the Office or considered by the Office.”). 7. In re Swanson, 540 F.3d 1368, 1375–76, 1379–80 (Fed. Cir. 2008).

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Additionally, claims under reexamination by the U.S. Patent Office, as with claims under reissue and under initial examination by the U.S. Patent Office, but unlike claims in litigation, “are to be given their broadest reasonable interpretation consistent with the specification.”8 As indicated by the Federal Circuit: During examination, “claims . . . are to be given their broadest reasonable interpretation consistent with the specification, and . . . claim language should be read in light of the specification as it would be interpreted by one of ordinary skill in the art.” In re Bond, 910 F.2d 831, 833 (Fed. Cir. 1990); accord Bass, 314 F.3d at 577 (“The PTO must apply the broadest reasonable meaning to the claim language, taking into account any definitions presented in the specification.”); In re Cortright, 165 F.3d 1353, 1358 (Fed. Cir. 1999) (“Although the PTO must give claims their broadest reasonable interpretation, this interpretation must be consistent with the one that those skilled in the art would reach.”); Hyatt, 211 F.3d at 1372. The “broadest reasonable construction” rule applies to reexaminations as well as initial examinations. See In re Hiniker Co., 150 F.3d 1362, 1368 (Fed. Cir. 1998); In re Yamamoto, 740 F.2d 1569, 1571 (Fed. Cir. 1984). Giving claims their broadest reasonable construction “serves the public interest by reducing the possibility that claims, finally allowed, will be given broader scope than is justified.” Yamamoto, 740 F.2d at 1571; accord Hyatt, 211 F.3d at 1372; In re Zletz, 893 F.2d 319, 322 (Fed. Cir. 1989) (“An essential purpose of patent examination is to fashion claims that are precise, clear, correct, and unambiguous. Only in this way can uncertainties of claim scope be removed, as much as possible, during the administrative process.”). Construing claims broadly during prosecution is not unfair to the applicant (or, in this case, the patentee), because the applicant has the opportunity to amend the claims to obtain more precise claim coverage. See Yamamoto, 740 F.2d at 1571–72 (“Applicants’ interests are not impaired since they are not foreclosed from obtaining appropriate coverage for their invention with express claim language. An applicant’s ability to amend his claims to avoid cited prior art distinguishes proceedings before the PTO from proceedings in federal district courts on issued patents. When an application is pending in the PTO, the applicant has the ability to correct errors in claim language and adjust the scope of claim protection as needed.”); Zletz, 893 F.2d at 321 (“During patent prosecution when claims can be amended, ambiguities should be recognized, scope and breadth of language explored, and clarification imposed.”); Hyatt, 211 F.3d at 1372.9

8. In re Bond, 910 F.2d 831, 833 (Fed. Cir. 1990). 9. In re Am. Acad. of Sci. Tech Ctr., 367 F.3d 1359, 1364 (Fed. Cir. 2004).


Further still, and also like reissue but unlike litigation, there is no presumption of validity of the issued patent in a reexamination proceeding: Reexamination provides a mechanism for enabling the Patent and Trademark Office to review and correct an initial examination. Thus reexamination is conducted afresh, without the burdens and presumptions that accompany litigation of an issued patent.10

As explained by the Federal Circuit, unlike in litigation, claims examined in the U.S. Patent Office (whether in original examination or post-issuance examinations such as reissue and reexamination) have no presumption of validity under 35 U.S.C. § 282: The statutory presumption of validity does not apply to patents involved in reissue proceedings before the Board. See 35 U.S.C. § 251, P 3 (1994) (“The provisions . . . relating to applications for patent [which provide no presumption of validity] shall be applicable to applications for reissue.”); see also In re Sneed, 710 F.2d 1544, 1550 n.4 (Fed. Cir. 1983). Reissue proceedings are initiated “whenever [a] patent is, through error without any deceptive intention, deemed wholly or partly inoperative or invalid.” 35 U.S.C. § 251, P 1 (1994). Neither do patents retain the presumption of validity during reexamination proceedings. See 35 U.S.C. § 305 (1994) (“Rexamination will be conducted according to the procedures established for initial examination.”); see also In re Etter, 756 F.2d 852, 858 (Fed. Cir. 1985). Reexaminations arise when a patent or printed publication raises a “substantial new question of patentability” regarding an issued patent. 35 U.S.C. § 304 (1994).11

As further explained by the court: The statute, 35 U.S.C. § 305, provides that “reexamination will be conducted according to the procedures established for initial examination under the provisions of sections 132 and 133 of this title.” The actual reexamination is conducted ex parte. 37 CFR 1.550(a) (1983). . . . The focus of the limited proceedings under Chapter 30 thus returns essentially to that present in an initial examination, i.e., to a time at which no presumption of validity had been created. ... In a very real sense, the intent underlying reexamination is to “start over” in the PTO with respect to the limited examination areas involved, and to reexamine the claims, and to examine new or amended claims, as they would have been

10. Laitram Corp. v. NEC Corp., 952 F.2d 1357, 1360 (Fed. Cir. 1991) (footnote omitted); In re Etter, 756 F.2d 852, 855–59 (Fed. Cir.) (en banc). 11. Bruning v. Hirose, 161 F.3d 681, 685 (Fed. Cir. 1998).

Reexamination 743 considered if they had been originally examined in light of all of the prior art of record in the reexamination proceeding. That intent is reflected in 35 U.S.C. § 303, which requires the Commissioner to determine whether “a substantial new question of patentability” has been raised, and in 35 U.S.C. § 304, which provides for initiation of reexamination by the Commissioner sua sponte. The intent that reexamination proceedings and court actions involving challenges to validity be distinct and independent is reflected in the legislative history of § 303, which notes that denial of a request for reexamination does not deprive the requestor (if not the patent owner) “of any legal right” to contest validity in subsequent court proceedings. That “legal right” may be exercised as a matter of right, but determination of whether a “substantial new question of patentability” exists, and therefore whether reexamination may be had, is discretionary with the Commissioner, and, as § 303 provides, that determination is final, i.e., not subject to appeal. That a patentee may request reexamination, and has the opportunity in the PTO of distinguishing art newly cited by the examiner, 37 CFR 1.530(c), and may amend his claims under reexamination, 35 U.S.C. § 305, further distinguish reexamination from litigation. It is of no moment that the examiner’s burden of showing a basis for rejection in the examination and reexamination processes is not described in the “clear and convincing” terms applicable under § 282 to a litigant challenging validity of an issued patent. During the examination processes, allowances of claims raise no presumption and may be withdrawn. That one challenging validity in court bears the burden assigned by § 282, that the same party may request reexamination upon submission of art not previously cited, and that, if that art raises a substantial new question of patentability, the PTO may during reexamination consider the same and new and amended claims in light of that art free of any presumption, are concepts not in conflict. On the contrary, those concepts are but further indication that litigation and reexamination are distinct proceedings, with distinct parties, purposes, procedures, and outcomes. In the former, a litigant who is attacking the validity of a patent bears the burden set forth in § 282. In the latter, an examiner is not attacking the validity of a patent, but is conducting a subjective examination of claims in the light of prior art.12

A U.S. patent may be under reexamination in the U.S. Patent Office and in litigation in a U.S. court at the same time. The Federal Circuit has held that there is nothing inconsistent with this situation. As the court stated in Ethicon: The thought that a [Patent and Trademark Office] decision may unnecessarily complicate the litigation and could create an awkward situation if different

12. Etter, 756 F.2d at 857–58 (emphasis added).

744 Chapter 21 Evaluating and Opining on One’s Own Patent Rights conclusions are reached overlooks that challenging validity in a court and requesting PTO reexamination “are concepts not in conflict.” Suspension prevents the simplification of litigation that might result from the cancellation, clarification, or limitation of claims, and, even if the reexamination did not lead to claim amendment or cancellation, it could still provide valuable analysis to the district court, see Custom Accessories, Inc. v. Jeffrey-Allan Industries, Inc., 807 F.2d 955, 961 (Fed. Cir. 1986); Control Laser Corp., 705 F.2d at 1342, which it could consider in reaching its determination. The awkwardness presumed to result if the PTO and court reached different conclusions is more apparent than real. The two forums take different approaches in determining invalidity and on the same evidence could quite correctly come to different conclusions. Furthermore, we see nothing untoward about the PTO upholding the validity of a reexamined patent which the district court later finds invalid. This is essentially what occurs when a court finds a patent invalid after the PTO has granted it. Once again, it is important that the district court and the PTO can consider different evidence. Accordingly, different results between the two forums may be entirely reasonable. And, if the district court determines a patent is not invalid, the PTO should continue its reexamination because, of course, the two forums have different standards of proof for determining invalidity. Cf. Stevenson v. Sears, Roebuck & Co., 713 F.2d 705, 710 (Fed. Cir. 1983) (“prior holding of validity [by a court] is not necessarily inconsistent with the subsequent holding of invalidity [by a court]”); Allen Archery, Inc. v. Browning Mfg. Co., 819 F.2d 1087, 1091 (Fed. Cir. 1987) (a party charged with infringement may challenge “the validity of patent claims that were upheld in a prior infringement suit to which it was not a party”).13

As further elaborated by the Federal Circuit in In re Swanson: In PTO examinations and reexaminations, the standard of proof—a preponderance of evidence—is substantially lower than in a civil case, In re Caveney, 761 F.2d 671, 674 (Fed. Cir. 1985); there is no presumption of validity, Etter, 756 F.2d at 856; and the “examiner is not attacking the validity of the patent but is conducting a subjective examination of the claims in light of prior art,” id. at 857–58. And unlike in district courts, in reexamination proceedings “[c]laims are given ‘their broadest reasonable interpretation, consistent with the specification. . . .’ ” Trans Tex. Holdings, 498 F.3d at 1298 (quoting In re Yamamoto, 740 F.2d 1569, 1571 (Fed. Cir. 1984)). Thus, considering an issue at the district court is not equivalent to the PTO having had the opportunity to consider it. See Ethicon, 849 F.2d at 1427 (“[P]recise duplication of effort does not occur

13. Ethicon, Inc. v. Quigg, 849 F.2d 1422, 1428–1429 (Fed. Cir. 1988) (footnote omitted, some citations omitted, emphasis added).

Reexamination 745 because the PTO and the courts employ different standards of proof when considering validity. . . .”). In Ethicon, we held that because of these differences between reexaminations and court proceedings, the PTO did not have authority to stay a patent reexamination proceeding pending the outcome of a case in a district court. . . . We explained that “the suspension of PTO [reexamination] proceedings does not prevent duplication;” instead, it improperly “precludes access to the forum where there is no presumption of validity.” In reaching this holding, we noted that “if the district court determines a patent is not invalid, the PTO should continue its reexamination because, of course, the two forums have different standards of proof for determining invalidity.”14

Furthermore, collateral estoppel does not normally apply between Patent Office decisions in ex parte reexaminations and court decisions: The doctrine of collateral estoppel does not prevent the PTO from completing the reexamination in this situation. Courts do not find patents “valid,” Environmental Designs, Ltd. v. Union Oil Co., 713 F.2d 693, 699 n.9 (Fed.Cir. 1983), only that the patent challenger did not carry the “burden of establishing invalidity in the particular case before the court” under 35 U.S.C. § 282. Panduit Corp. v. Dennison Mfg. Co., 810 F.2d 1561, 1569 (Fed.Cir. 1987) (emphasis added); accord Shelcore, Inc. v. Durham Industries, Inc., 745 F.2d 621, 627 (Fed. Cir. 1984) (“A patent is not held valid for all purposes but, rather, not invalid on the record before the court”). “Thereupon, the patent simply remains valid until another challenger carries the § 282 burden.” Panduit Corp., 810 F.2d at 1570. Accordingly, a court’s decision upholding a patent’s validity is not ordinarily binding on another challenge to the patent’s validity, Stevenson v. Sears, Roebuck & Co., 713 F.2d 705, 710, 711 (Fed.Cir. 1983), in either the courts or the PTO.15

However, “if a court finds a patent invalid, and that decision is either upheld on appeal or not appealed, the PTO may discontinue its reexamination.”16 Staying litigation because of a co-pending reexamination is entirely up to the discretion of the court. As explained by the Federal Circuit: The Supreme Court has long recognized that district courts have broad discretion to manage their dockets, including the power to grant a stay of proceedings. See, e.g., Landis v. N. Am. Co., 299 U.S. 248, 254–55, 57 S. Ct. 163, 81 L. Ed. 153 (1936) (“[T]he power to stay proceedings is incidental to the power inherent in every court to control the disposition of causes on its docket. . . . How this

14. In re Swanson, 540 F.3d at 1377–78 (some citations omitted). 15. Id. at 1492 n.3. 16. Id. at 1492.

746 Chapter 21 Evaluating and Opining on One’s Own Patent Rights can best be done calls for the exercise of judgment, which must weigh competing interests and maintain an even balance.”). . . . [T]his court ha[s] consistently recognized the inherent power of the district courts to grant a stay pending reexamination of a patent. See, e.g. Gould v. Control Laser Corp., 705 F.2d 1340, 1341 (Fed. Cir. 1983) (noting that “because district courts have broad discretionary powers to control their dockets, stays will not be vacated unless they are immoderate or of an indefinite duration.” (internal quotation marks omitted)); Ethicon, Inc. v. Quigg, 849 F.2d 1422, 1426 (Fed. Cir. 1988) (reviewing legislative history of ex parte reexamination, which stated that the statute lacked language authorizing district courts to grant stays pending reexamination because “ ‘such power already resides with the Court.’ ” (quoting 1980 U.S. Code Cong. & Admin. News at 6463)).17

A. Role of Patent Evaluations and Opinions of Third Party Patents in Reexamination In order to have the Director of the U.S. Patent Office order a reexamination of an issued U.S. patent, the patentee requester must submit a Request for Reexamination making the case that documentary prior art (such as a U.S. patent or a printed publication under 35 U.S.C. § 102(b)) raises a “substantial new question of patentability affecting [at least one] claim of the patent concerned.”18 This requirement does not necessarily mean that the subject prior art must not have been considered by the Patent Office in examining the subject patent.19 However, it does mean that the Request must show that the substantial question of patentability was not “ ‘already decided by the Office, whether during the original examination or an earlier reexamination.’ ”20 Therefore, in a Request for Reexamination, the patentee requester must show both: (a) why the cited reference raises a substantial question of patentability of at least one claim of the subject patent;21 and (b) that the substantial question of patentability was not previously addressed in the patent’s prosecution history.22 This necessarily requires a complete claim construction, analysis of the prior art, and analysis and opinion of invalidity based on application of the prior art to the construed claims. Especially in the event prior art is being used that has been cited in the prosecution of the patent, it is necessary

17. P&G v. Kraft Foods Global, Inc., 549 F.3d 842, 848–49 (Fed. Cir. 2008). 18. 35 U.S.C.S. § 303 (2009). 19. Id. (“The existence of a substantial new question of patentability is not precluded by the fact that a patent or printed publication was previously cited by or to the Office or considered by the Office.”). 20. Swanson, 540 F.3d at 1380 (quoting H.R. Rep. No. 96-1307). 21. See, e.g., id. at 1375–76. 22. See, e.g., id. at 1379–80.

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to review thoroughly the patent’s prosecution history. Then, one must provide a detailed description of the prosecution history of the patent showing that the substantial new question of patentability raised in the Request was not previously considered in the patent’s prosecution history. Additionally, the claim construction and invalidity analysis for a Request for Reexamination must take into account two issues that differ in reexamination invalidity analyses and opinions as compared with invalidity analyses and opinions for most purposes of this treatise, such as for predicting whether a reasonable court should hold a patent’s claims to be invalid: For reexamination purposes: (a) the claims are to be given their broadest reasonable interpretation consistent with the specification;23 and (b) there is no presumption that the claims are valid.24

II. Reissue Reissue is a procedure conducted in and by the U.S. Patent Office for the correction of certain types of errors in issued U.S. patents that include those situations in which the patentee claimed more or less than he had a right to claim in the patent. As discussed in detail below, there are strict limitations on the types of errors that can be corrected (as well as on the time in which claims may be broadened) by reissue examination. Claims reissued in violation of these restrictions are invalid. Reissue is based on 35 U.S.C. § 251, which sets forth the requirements for reissuance of a U.S. patent: Whenever any patent is, through error without any deceptive intention, deemed wholly or partly inoperative or invalid, by reason of a defective specification or drawing, or by reason of the patentee claiming more or less than he had a right to claim in the patent, the Director shall, on the surrender of such patent and the payment of the fee required by law, reissue the patent for the invention disclosed in the original patent, and in accordance with a new and amended application, for the unexpired part of the term of the original patent. No new matter shall be introduced into the application for reissue. The Director may issue several reissued patents for distinct and separate parts of the thing patented, upon demand of the applicant, and upon payment of the required fee for a reissue for each of such reissued patents.

23. See, e.g., id. at 1377–78; In re Trans Texas Holdings Corp., 498 F.3d 1290, 1298 (Fed. Cir. 2007); In re Yamaoto, 740 F.2d 1569, 1571 (Fed. Cir. 1984); In re Bond, 910 F.2d 831, 833 (Fed. Cir. 1990); In re Am. Acad. of Sci. Tech Ctr., 367 F.3d 1359, 1364 (Fed. Cir. 2004). 24. See, e.g., Laitram Corp. v. NEC Corp., 952 F.2d 1357, 1360 (Fed. Cir. 1991); In re Etter, 756 F.2d 852, 855–59 (Fed. Cir.) (en banc); Bruning v. Hirose, 161 F.3d 681, 685 (Fed. Cir. 1998).

748 Chapter 21 Evaluating and Opining on One’s Own Patent Rights The provisions of this title relating to applications for patent shall be applicable to applications for reissue of a patent, except that application for reissue may be made and sworn to by the assignee of the entire interest if the application does not seek to enlarge the scope of the claims of the original patent. No reissued patent shall be granted enlarging the scope of the claims of the original patent unless applied for within two years from the grant of the original patent.25

Reissuance of U.S. patents is remedial in nature. As explained by the Federal Circuit in In re Weiler: “In enacting the statute, Congress provided a statutory basis for correction of ‘error.’ The statute is remedial in nature, based on fundamental principles of equity and fairness, and should be construed liberally.”26 The Federal Circuit has noted: Pursuant to 35 U.S.C. § 251, a patentee may obtain reissue of a patent if the patent is, through error “without any deceptive intention, deemed wholly or partly inoperative or invalid, . . . by reason of the patentee claiming more or less than he had a right to claim in the patent. . . .” 35 U.S.C. § 251; see also 37 C.F.R. § 1.175. “In considering the ‘error’ requirement, we keep in mind that the reissue statute is ‘based on fundamental principles of equity and fairness, and should be construed liberally.’ ” Hester Indus., Inc. v. Stein, Inc., 142 F.3d 1472, 1479 (Fed. Cir. 1998) (citation omitted). We have stated that “[a]n attorney’s failure to appreciate the full scope of the invention is one of the most common sources of defects in patents,” and is generally sufficient to justify reissuing a patent. In re Wilder, 736 F.2d 1516, 1519 (Fed. Cir. 1984); see also Hester, 142 F.3d at 1479–80; In re Clement, 131 F.3d 1464, 1468 (Fed. Cir. 1997); Mentor Corp. v. Coloplast, Inc., 998 F.2d 992, 995 (Fed. Cir. 1993); Scripps Clinic & Res. Found. v. Genentech, Inc., 927 F.2d 1565, 1575 (Fed. Cir. 1991). It is not necessary that the error be unavoidable or that the error could not have been discovered by the patentee through proper communication with the prosecuting attorney. Wilder, 736 F.2d at 1519.27

However, the Federal Circuit has cautioned: [N]ot every event or circumstance that might be labeled “error” is correctable by reissue. . . . The reissue statute was not enacted as a panacea for all patent prosecution problems, nor as a grant to the patentee of a second opportunity to prosecute de novo his original application. . . .

25. 35 U.S.C. § 251 (2009). 26. In re Weiler, 790 F.2d 1576, 1579 (Fed. Cir. 1986) (citations omitted). 27. Medtronic, Inc. v. Guidant Corp., 465 F.3d 1360, 1372 (Fed. Cir. 2006).

Reissue 749 The grant of reissues [is not required] on anything and everything mentioned in a disclosure. . . . [Section] 251 does not authorize a patentee to represent his application. Insight resulting from hindsight on the part of new counsel does not, in every case, establish error.28

In fact, perhaps most of the Federal Circuit’s cases on reissue of U.S. patents have concerned the limitations on reissuance. Over the years, the Federal Circuit has issued a legion of opinions restricting the scope of reissuance. Some, but by no means all, of the more pertinent restrictions are discussed below.29 One of the major limitations on reissuance is that intentional, deliberate acts, decisions, and the like made during preparation of the patent application or during the original prosecution of the patent cannot be “corrected” by reissue. This is because intentional, deliberate events are not “errors” under Section 251. As explained by the Federal Circuit in Mentor: If a patentee tries to recapture what he or she previously surrendered in order to obtain allowance of original patent claims, that “deliberate withdrawal or amendment . . . cannot be said to involve the inadvertence or mistake contemplated by 35 U.S.C. § 251, and is not an error of the kind which will justify the granting of a reissue patent which includes the matter withdrawn.”30

Courts refer to the prohibition of recapturing by reissue subject matter surrendered in prosecution as the recapture rule. As described by the Federal Circuit: The recapture rule “prevents a patentee from regaining through reissue the subject matter that he surrendered in an effort to obtain allowance of the original claims.” Clement, 131 F.3d at 1468. Reissued claims that are broader than the original patent’s claims in a manner directly pertinent to the subject matter surrendered during prosecution are impermissible. Id. (quoting Mentor, 998 F.2d at 996).31

Courts use a three-step process to determine whether to apply the recapture rule: Application of the recapture rule is a three-step process. The first step is to “determine whether and in what ‘aspect’ the reissue claims are broader than the

28. Weiler, 790 F.2d at 1579, 1582, 1583 n. 4. 29. For further information, see, e.g., Kunin and Schor, The Reissue Recapture Doctrine: Its Place Among the Patent Laws, 22 Cardozo Arts & Ent LJ 451 (2004). 30. Mentor Corp. v. Coloplast, Inc., 998 F.2d 992, 995 (Fed. Cir. 1993) (quoting Haliczer v. United States, 356 F.2d 541, 545 (Ct. Cl. 1966)). 31. Pannu v. Storz Instruments, Inc., 258 F.3d 1366, 1370–71 (Fed. Cir. 2001).

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Chapter 21 Evaluating and Opining on One’s Own Patent Rights patent claims.” Id. “The second step is to determine whether the broader aspects of the reissued claim related to surrendered subject matter.” Id. Finally, the court must determine whether the reissued claims were materially narrowed in other respects to avoid the recapture rule. Hester, 142 F.3d at 1482–83; Clement, 131 F.3d at 1470.32

Courts have explained that one of the reasons behind refusing to allow a patentee to recapture subject matter that was surrendered during prosecution is to allow the public to rely on the patentee’s conduct in the prosecution history of a patent in order to delineate the meets and bounds of a patent’s claims. For example, in ConAga, the Federal Circuit noted: It is clear that in determining whether “surrender” of subject matter has occurred, the proper inquiry is whether an objective observer viewing the prosecution history would conclude that the purpose of the patentee’s amendment or argument was to overcome prior art and secure the patent. This is because the recapture rule is aimed at ensuring that the public can rely on a patentee’s admission during prosecution of an original patent. “It is precisely because the patentee amended his claims to overcome prior art that a member of the public is entitled to occupy the space abandoned by the patent applicant. . . . [T]he reissue statute cannot be construed in such a way that competitors, properly relying on prosecution history, become patent infringers when they do so.” Mentor Corp., 998 F.2d at 996; see also Vectra Fitness, Inc. v. TNWK Corp., 162 F.3d 1379, 1384 (Fed. Cir. 1998) (“[T]he ‘recapture rule’ prevents a patentee from regaining through reissue subject matter surrendered during prosecution, thus ensuring the ability of the public to rely on a patent’s public record.”) (emphasis added). Thus, if the objective public observer can discern a surrender of subject matter during the prosecution of an original patent in order to overcome prior art and obtain the patent, then the recapture rule should prevent the reissuing of that patent to claim the surrendered subject matter.33

The recapture rule has been applied in cases of cancelation and narrowing amendments of claims to overcome rejections, as well as to arguments to overcome rejections. “A patentee can surrender subject matter either through arguments or amendments made during the prosecution of the original patent.”34 For example, in Plastipak the Federal Circuit held: We agree that NAC violated the recapture rule, and thus the reissue claims are invalid. Applying our three-part test, we find that the reissue claims are broader

32. Id. at 1371. 33. Kim v. ConAgra Foods, Inc., 465 F.3d 1312, 1323 (Fed. Cir. 2006). 34. Id. at 1322 (footnote omitted).

Reissue 751 in scope than the originally-issued claims in that they no longer require the “inner walls” to be “generally convex.” Moreover, the broader aspect of the reissue claims relates to subject matter that was surrendered during prosecution of the original-filed claims. Indeed, during prosecution, the applicant conceded that the pending independent claims “have been amended to refer to the convex nature of the inner wall portions of the central re-entrant portion.” The applicant even argued that the “shape of the base as now defined in the claims differs from those of . . . the Dechenne patent, wherein the corresponding wall portions are slightly concave.” Id. (emphasis added). Finally, the reissue claims were not narrowed with respect to the “inner wall” limitation, thus avoiding the recapture rule.35

In Hester, the Federal Circuit held that the recapture rule applies even where claims are not amended, but the patentee argued in the original file history that subject matter sought in reissue claims was not patentable over rejections: Arguments made to overcome prior art can equally evidence an admission sufficient to give rise to a finding of surrender. Indeed, in Mentor and Clement the findings of a surrender were based in part on the arguments made in conjunction with the claim amendments. Logically, this is true even when the arguments are made in the absence of any claim amendment. Amendment of a claim is not the only permissible predicate for establishing a surrender. The view that arguments alone can give rise to a surrender is consistent with the policy behind the reissue statute and the accompanying recapture rule. As already noted, the reissue statute is “based on fundamental principles of equity and fairness.” Weiler, 790 F.2d at 1579. There is no unfairness in binding the patentee to deliberate assertions made in order to obtain allowance of the original patent claims over the prior art. Indeed, fairness to the public must also be considered. In this regard, as stated in Mentor, “the reissue statute cannot be construed in such a way that competitors, properly relying on prosecution history, become patent infringers when they do so.” 998 F.2d 992 at 996. The recapture rule operates to prevent this from happening. See id. Furthermore, as recognized in Ball, the recapture rule is based on principles of equity and therefore embodies the notion of estoppel. 729 F.2d at 1439. Indeed, the recapture rule is quite similar to prosecution history estoppel, which prevents the application of the doctrine of equivalents in a manner contrary

35. N. Am. Container, Inc. v. Plastipak Packaging, Inc., 415 F.3d 1335, 1350 (Fed. Cir. 2005) (some citations omitted, emphasis in original) (affirming invalidity for violating Section 251 under the recapture rule); see also, e.g., Pannu, 258 F.3d at 1372 (affirming invalidity for violating Section 251 under the recapture rule); ConAgra, 465 F.3d at 1322–24 (affirming denial summary judgment of invalidity for violating Section 251 under the recapture rule, finding invalidity had not been shown by clear and convincing evidence).

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Chapter 21 Evaluating and Opining on One’s Own Patent Rights to the patent’s prosecution history. Like the recapture rule, prosecution history estoppel prevents a patentee from regaining subject matter surrendered during prosecution in support of patentability. . . . This court earlier concluded that prosecution history estoppel can arise by way of unmistakable assertions made to the Patent Office in support of patentability, just as it can by way of amendments to avoid prior art. The same reasoning that led us to conclude that arguments alone can give rise to prosecution history estoppel lends support to the proposition that arguments alone can give rise to a surrender for purposes of the recapture rule.36

Applying the law to the facts, the Hester court found: Thus we conclude that, in a proper case, a surrender can occur through arguments alone. We next evaluate whether such a surrender occurred here with respect to the “solely with steam” and “two sources of steam” limitations, the pertinent aspects in which the asserted reissue claims are broader than the original patent claims. The obvious conclusion is that there has been a surrender. As detailed above, Williams repeatedly argued that the “solely with steam” and “two sources of steam” limitations distinguished the original claims from the prior art. These were Williams’ primary bases for distinguishing the broadest claim, independent claim 1, from the prior art. At no less than 27 places in six papers submitted to the Patent Office, Williams asserted that the “solely with steam” limitation distinguished the claimed invention from the prior art, and Williams did the same with respect to the “two sources of steam” limitation at no less than 15 places in at least five papers. Williams argued that each of these limitations was “critical” with regard to patentability, and Williams further stated that the “solely with steam” limitation was “very material” in this regard. In essence, these repeated arguments constitute an admission by Williams that these limitations were necessary to overcome the prior art. Indeed, when the Board reversed the Examiner’s rejection of the original claims, these were the primary bases indicated for patentability. Williams, through his admission effected by way of his repeated prosecution arguments, surrendered claim scope that does not include these limitations.37

The recapture rule has also been applied to bar claims that were intentionally canceled in response to a restriction requirement. In In re Watkinson, the Federal Circuit addressed a situation in which a patentee tried to obtain claims in reissuance to subject matter that had been claimed in an original application, subjected to a restriction requirement, and canceled in light of the restriction

36. Hester Indus. v. Stein, Inc., 142 F.3d 1472, 1481–82 (Fed. Cir. 1998) (some citations omitted, emphasis added). 37. Id. at 1482 (emphasis added).

Reissue 753

requirement, with the patent being issued without the patentee filing a divisional application claiming the canceled subject matter.38 The Federal Circuit affirmed the Patent Office’s rejection of the reissue claims for lacking a statutory basis under Section 251 for reissue, finding: In light of the record and relevant case law, however, we reject Watkinson’s argument and hold that the failure to file a divisional application, regardless of the propriety of the underlying restriction requirement, is not an error correctable by reissue under 35 U.S.C. § 251.39

The court reasoned: The proper time for Watkinson to have challenged the merits of the restriction requirement in the original application was during the prosecution of the original application. Upon compliance with the relevant PTO regulations, Watkinson could have received from the examiner and the Commissioner the consideration she now requests from this court. See 37 C.F.R. §§ 1.143, 1.144 (1989). However, after acquiescing in the restriction requirement, cancelling the nonelected claim and allowing the ’219 patent to issue, Watkinson has lost her opportunity to challenge the propriety of the restriction requirement. We agree with the board that this case falls squarely within the holding of In re Orita where the court said that section 251 “is not a panacea designed to cure every mistake which might be committed by an applicant or his attorney, and the case at bar exemplifies a mistake which this section cannot cure.” 550 F.2d at 1281, cf. Ball Corp. v. United States, 729 F.2d 1429, 1435 (Fed.Cir. 1984) (“Reissue is not a substitute for Patent [and Trademark] Office appeal procedures.”). Moreover, we will not permit Watkinson to undermine the copendency requirement under sections 120 and 121 by using the reissue statute to avoid a restriction requirement in which she acquiesced. See Orita, 550 F.2d at 1280–81.40

However, in In re Doyle, the Federal Circuit held that it was within the scope of Section 251—and was not impermissible recapture—to allow claims in a broadening reissue41 to subject matter of a linking claim canceled in

38. In re Watkinson, 900 F.2d 230, 231 (Fed. Cir. 1990). 39. Id. 40. Id. at 233 (footnote omitted); see also, e.g., In re Weiler, 790 F.2d 1576, 1582 (Fed. Cir. 1986) (“Significantly, Weiler accepted issuance of the ’923 patent with its claims to a single elected invention. By acquiescing in the examiner’s restriction requirement, and failing to file divisional applications on the subject matter of non-elected claims, Weiler foreclosed (because that was not error) his right to claim that subject matter.”). 41. See below.

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response to a restriction requirement.42 The court distinguished reissue of linking claims from cases such as In re Watkinson and In re Weiler. The court noted that the reissue claims in Watkinson and Weiler were to separate inventions from the claims in the reissue patent, and, therefore, the proposed reissue claims in those cases should only have issued in separate divisional patents, not in the reissue patent. The court explained: There is a crucial difference between the situation in Weiler and the present case. Dr. Doyle’s claims are not to an invention distinct from that of the issued claims. Rather, as the Solicitor admits, they are linking claims that read on, and could have been asserted with, the elected group. Therefore, the entire premise of Weiler is inapplicable to this case, for Weiler applies only to an attempt to assert new claims in reissue that read on a separate invention and not on the subject matter of the issued claims.43

Courts have also held that reissue cannot change an intentionally made priority claim. For example, in In re Serenkin, a patent applicant filed a PCT application referencing drawings, but included no drawings.44 Several days after the PCT application was filed, the applicant filed the drawings. Subsequently, the Patent Office gave the applicant the option of retaining the earlier filing date without the drawings or accepting the later filing date with the drawings. The applicant accepted the later filing date and a patent ultimately issued.45 The patentee then sought reissue of the patent with the earlier filing date. The Federal Circuit affirmed the Patent Office’s refusal to change the filing date, finding: Serenkin is not attempting to obtain claims that differ in scope from claims that he previously cancelled. Instead, he is attempting to use the reissue process to undo the consequences of his attorney’s conscious decision to give up an earlier filing date so that certain material, which was considered important at the time, would be considered with his PCT application. He did not claim less than he had a right to claim. . . . [T]he purported error asserted by Serenkin is not the type of error contemplated by the reissue statute. We therefore hold that Serenkin may not rely on § 251 to perfect his claim for priority.46

42. 43. 44. 45. 46.

In re Doyle, 293 F.3d 1355, 1363 (Fed. Cir. 2002). Id. In re Serenkin, 479 F.3d 1359, 1366–61 (Fed. Cir. 2007). Id. Id. at 1365.

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Finally, paragraph 4 of the reissue statute itself provides: “No reissued patent shall be granted enlarging the scope of the claims of the original patent unless applied for within two years from the grant of the original patent.”47 As stated by the Federal Circuit: Section 251 addresses the correction of an “error” and it is understood that corrections under § 251 can result in the broadening of a claim. 35 U.S.C. § 251 (allowing correction of an error in which “the patentee claimed . . . less than he had a right to claim”). The patentee’s right to broaden a claim is not absolute, however. First, § 251 requires that the broadened claim be supported by the original specification. Id. (allowing a reissue only “for the invention disclosed in the original patent”). Second, § 251 precludes a patentee from applying for a broadening reissue more than two years after a patent has issued. 35 U.S.C. § 251 (1994) (“No reissued patent shall be granted enlarging the scope of the claims of the original patent unless applied for within two years from the grant of the original patent”).48

Additionally, claims under reissue examination by the U.S. Patent Office (as with claims under reexamination and under initial examination by the U.S. Patent Office, but unlike claims in litigation) “are to be given their broadest reasonable interpretation consistent with the specification.”49 As explained by the Federal Circuit in the context of reexamination: During examination, “claims . . . are to be given their broadest reasonable interpretation consistent with the specification, and . . . claim language should be read in light of the specification as it would be interpreted by one of ordinary skill in the art.” In re Bond, 910 F.2d 831, 833 (Fed. Cir. 1990); accord Bass, 314 F.3d at 577 (“The PTO must apply the broadest reasonable meaning to the claim language, taking into account any definitions presented in the specification.”); In re Cortright, 165 F.3d 1353, 1358 (Fed. Cir. 1999) (“Although the PTO must give claims their broadest reasonable interpretation, this interpretation must be consistent with the one that those skilled in the art would reach.”); Hyatt, 211 F.3d at 1372. The “broadest reasonable construction” rule applies to reexaminations as well as initial examinations. See In re Hiniker Co., 150 F.3d 1362, 1368 (Fed. Cir. 1998); In re Yamamoto, 740 F.2d 1569, 1571 (Fed. Cir. 1984). Giving

47. 35 U.S.C.S. § 251, P 4 (2009) (emphasis added). 48. Superior Fireplace Co. v. Majestic Prods. Co., 270 F.3d 1358, 1370–71 (Fed. Cir. 2001) (some citations omitted, emphasis added). 49. In re Bond, 910 F.2d 831, 833 (Fed. Cir. 1990) (claims in reexamination, like claims in original examination, “are to be given their broadest reasonable interpretation consistent with the specification.”); cf. Hewlett-Packard Co. v. Bausch & Lomb, Inc., 882 F.2d 1556, 1563 (Fed. Cir. 1989) (claims in a “reissue application [are to be] ‘examined in the same manner as original applications’ ”) (quoting 37 C.F.R. § 1.176).

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Chapter 21 Evaluating and Opining on One’s Own Patent Rights claims their broadest reasonable construction “serves the public interest by reducing the possibility that claims, finally allowed, will be given broader scope than is justified.” Yamamoto, 740 F.2d at 1571; accord Hyatt, 211 F.3d at 1372; In re Zletz, 893 F.2d 319, 322 (Fed. Cir. 1989) (“An essential purpose of patent examination is to fashion claims that are precise, clear, correct, and unambiguous. Only in this way can uncertainties of claim scope be removed, as much as possible, during the administrative process.”). Construing claims broadly during prosecution is not unfair to the applicant (or, in this case, the patentee), because the applicant has the opportunity to amend the claims to obtain more precise claim coverage. See Yamamoto, 740 F.2d at 1571–72 (“Applicants’ interests are not impaired since they are not foreclosed from obtaining appropriate coverage for their invention with express claim language. An applicant’s ability to amend his claims to avoid cited prior art distinguishes proceedings before the PTO from proceedings in federal district courts on issued patents. When an application is pending in the PTO, the applicant has the ability to correct errors in claim language and adjust the scope of claim protection as needed.”); Zletz, 893 F.2d at 321 (“During patent prosecution when claims can be amended, ambiguities should be recognized, scope and breadth of language explored, and clarification imposed.”); Hyatt, 211 F.3d at 1372.50

Further still, also like reexamination, and unlike litigation, “[c]laims in a reissue application enjoy no presumption of validity.”51 As noted by the Federal Circuit, unlike in litigation, claims examined in the U.S. Patent Office (whether in original examination or post-issuance examinations such as reissue and reexamination) have no presumption of validity under 35 U.S.C. § 282: The statutory presumption of validity does not apply to patents involved in reissue proceedings before the Board. See 35 U.S.C. § 251, P 3 (1994) (“The provisions . . . relating to applications for patent [which provide no presumption of validity] shall be applicable to applications for reissue.”); see also In re Sneed, 710 F.2d 1544, 1550 n.4 (Fed. Cir. 1983). Reissue proceedings are initiated “whenever [a] patent is, through error without any deceptive intention, deemed wholly or partly inoperative or invalid.” 35 U.S.C. § 251, P 1 (1994). Neither do

50. In re Am. Acad. of Sci. Tech Ctr., 367 F.3d 1359, 1364 (Fed. Cir. 2004) (claims in reexamination, like claims in original examination, “ ‘are to be given their broadest reasonable interpretation consistent with the specification, and . . . claim language should be read in light of the specification as it would be interpreted by one of ordinary skill in the art.’ ”) (quoting Bond, 910 F.2d at 833); cf. Hewlett-Packard, 882 F.2d at 1563 (claims in a “reissue application [are to be] ‘examined in the same manner as original applications’ ”) (quoting 37 C.F.R. § 1.176). 51. In re Etter, 756 F.2d 852, 858 (Fed. Cir. 1985) (en banc); In re Sneed, 710 F.2d 1544, 1550 (Fed. Cir. 1983) (“We note that, contrary to appellants’ argument, claims in a reissue application enjoy no presumption of “validity.” See In re Doyle, 482 F.2d 1385, 1392 (CCPA 1973).”).

Reissue 757 patents retain the presumption of validity during reexamination proceedings. See 35 U.S.C. § 305 (1994) (“Reexamination will be conducted according to the procedures established for initial examination.”); see also In re Etter, 756 F.2d 852, 858 (Fed. Cir. 1985). Reexaminations arise when a patent or printed publication raises a “substantial new question of patentability” regarding an issued patent. 35 U.S.C. § 304 (1994).52

A. Role of Patent Evaluations and Opinions of Third Party Patents in Reissue While reissuance of U.S. patents under Section 251 is intended to correct errors in issued patents, it is subject to a number of significant restrictions and limitations. The recapture rule is a major limitation on reissue that prohibits reissuance of claims covering subject matter deliberately surrendered by the patentee in the original prosecution (by amendment, claim cancelation, or argument) in order to obtain the original patent. The three-part test for determining whether the recapture rule applies necessarily involves claim construction. As stated by the Federal Circuit: Application of the recapture rule is a three-step process. The first step is to determine whether and in what aspect the reissue claims are broader than the patent claims. The second step is to determine whether the broader aspects of the reissued claim related to surrendered subject matter. Finally, the court must determine whether the reissued claims were materially narrowed in other respects to avoid the recapture rule.53

Determining the scope of claims under the recapture rule proceeds as it does in any evaluation and opinion of a U.S. patent: by consulting the intrinsic evidence, including the patent’s prosecution history, the prior art, the patent’s specification, and the other claims of the patent. As described by the Federal Circuit in MBO Labs.: In operation, the recapture rule excludes earlier deliberate withdrawals and amendments from the allowable scope of a reissue patent. “Under the recapture rule, claims that are broader than the original patent claims in a manner directly pertinent to the subject matter surrendered during prosecution are impermissible.” Hester Indus., Inc. v. Stein, Inc., 142 F.3d 1472, 1480 (Fed. Cir. 1998). We described in depth the required analysis in a recapture case in In re Clement,

52. Bruning v. Hirose, 161 F.3d 681, 685 (Fed. Cir. 1998). 53. Pannu v. Storz Instruments, Inc., 258 F.3d 1366, 1371 (Fed. Cir. 2001) (quotations omitted, citations omitted).

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Chapter 21 Evaluating and Opining on One’s Own Patent Rights 131 F.3d at 1468–70. First, the original and reissued claims are construed to ascertain “whether and in what aspect the reissue claims are broader than the patent claims.” Id. at 1468. If the reissue claims are broader in some way, the court must determine “whether the broader aspects of the reissue claims relate to the surrendered subject matter.” Id. at 1468–69. This is accomplished by reviewing the prosecution history to determine what has been surrendered and determining whether the additional coverage of the reissue claim reads on the surrendered matter. Id. at 1469–70. If it does, the recapture rule bars the claim. Id. at 1470.54

Therefore, prior to requesting reissuance of a U.S. patent, at minimum a complete evaluation and opinion of the claim scope of any proposed reissue claims should be conducted to assure these claims comply with Section 251, including determining whether the reissue claims are impermissibly broadened under the Federal Circuit’s three-point recapture test. Additionally, pre-reissue patent evaluations and opinions should take into consideration whether the subject matter of proposed reissue claims has been the subject of a restriction requirement in the prosecution history of the reissue patent. If so, the patentee should determine whether the reissue claims are linking claims directed to the same subject matter as the patent or whether they are drawn to a separate invention. Performance of evaluations and opinions regarding reissue Section 251 prior to seeking reissuance is important. Proper Section 251 prefiling evaluations and opinions should allow a patentee to avoid improperly reissued claims, which are invalid under Section 251. Further, they may also help a patentee avoid potential exposure to charges of inequitable conduct and attorneys fees under Section 285 should the reissue patent be litigated, the reissue claims be found to be invalid, and the conduct of the patentee be found to be exceptional.55 Further still, a thorough prefiling patent evaluation and opinion,

54. MBO Labs., Inc. v. Becton, Dickinson & Co., 474 F.3d 1323, 1332 (Fed. Cir. 2007) (emphasis added); see also, e.g., Std. Oil Co. v. Am. Cyanamid Co., 774 F.2d 448, 452 (Fed. Cir. 1985) (“Finally, the prosecution history (sometimes called “file wrapper and contents”) of the patent consists of the entire record of proceedings in the Patent and Trademark Office. This includes all express representations made by or on behalf of the applicant to the examiner to induce a patent grant, or, as here, to reissue a patent. Such representations include amendments to the claims and arguments made to convince the examiner that the claimed invention meets the statutory requirements of novelty, utility, and nonobviousness. Thus, the prosecution history (or file wrapper) limits the interpretation of claims so as to exclude any interpretation that may have been disclaimed or disavowed during prosecution in order to obtain claim allowance.”). 55. See, e.g., Arcade, Inc. v. Minnesota Mining & Mfg. Co., 1993 U.S. App. LEXIS 14976 (Fed. Cir. 1993) (unpbl.) (affirming an award of attorneys fees to defendants under 35 U.S.C. § 285 as an exceptional case where asserted reissue claims were held invalid and where the court found inequitable conduct by the patentees in the reissue prosecution); Std. Oil, 774 F.2d

Disclaimer

including claim construction and a recapture rule analysis under Section 251, should be performed prior to suing for patent infringement on a reissue patent to comply with the requirements of Rule 11 of the Federal Rules of Civil Procedure.56 Finally, as with reexamination, those doing claim construction and invalidity analyses for reissuance must take into account two issues that differ in reissue invalidity analyses and opinions compared with invalidity analyses and opinions for most other purposes of this treatise, such as for predicting whether a reasonable court should hold a patent’s claims to be invalid: For reexamination purposes: (a) the claims are to be given their broadest reasonable interpretation consistent with the specification,57 and (b) there is no presumption that the claims are valid.58

III. Disclaimer 35 U.S.C. § 253 provides: Whenever, without any deceptive intention, a claim of a patent is invalid the remaining claims shall not thereby be rendered invalid. A patentee, whether of the whole or any sectional interest therein, may, on payment of the fee required by law, make disclaimer of any complete claim, stating therein the extent of his interest in such patent. Such disclaimer shall be in writing, and recorded in the Patent and Trademark Office; and it shall thereafter be considered as part of the original patent to the extent of the interest possessed by the disclaimant and by those claiming under him.

at 450 (finding “simple negligence or oversight” by the patentee in prosecuting an invalid reissue claim, but remanding the case for the district court to determine whether attorneys fees under 35 U.S.C. § 285 may be warranted to the defendant); Brady Constr. Innovations, Inc. v. Perfect Wall, Inc., 290 Fed. Appx. 358, 364 (Fed. Cir. 2008) (unpblished) (finding no inequitable conduct by the patentee in prosecuting an invalid reissue claim and denying the defendant attorneys fees under 35 U.S.C. § 285); see also Chapter 20. 56. See Chapter 20. 57. In re Am. Acad. of Sci. Tech Ctr., 367 F.3d 1359, 1364 (Fed. Cir. 2004) (claims in reexamination, like claims in original examination, “ ‘are to be given their broadest reasonable interpretation consistent with the specification, and . . . claim language should be read in light of the specification as it would be interpreted by one of ordinary skill in the art.’ ”) (quoting In re Bond, 910 F.2d 831, 833 (Fed. Cir. 1990); cf. Hewlett-Packard Co. v. Bausch & Lomb, Inc., 882 F.2d 1556, 1563 (Fed. Cir. 1989) (claims in a “reissue application [are to be] ‘examined in the same manner as original applications’ ”) (quoting 37 C.F.R. § 1.176). 58. In re Etter, 756 F.2d 852, 858 (Fed. Cir. 1985) (en banc) (“Claims in a reissue application enjoy no presumption of validity.”); In re Sneed, 710 F.2d 1544, 1550 (Fed. Cir. 1983) (“We note that, contrary to appellants’ argument, claims in a reissue application enjoy no presumption of “validity.” See In re Doyle, 482 F.2d 1385, 1392 (CCPA 1973).”).

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760 Chapter 21 Evaluating and Opining on One’s Own Patent Rights In like manner any patentee or applicant may disclaim or dedicate to the public the entire term, or any terminal part of the term, of the patent granted or to be granted.59

Disclaimer is usually used in situations in which there is no issue of one or more claims of an issued patent being invalid. For example, disclaimer is commonly used where a court has made a final ruling through appeal of invalidity of one or more claims of an issued patent. In such cases, the patentee may file a disclaimer of the claims held invalid by the court. Disclaimer should not be used where the patentee is not certain that a claim is invalid. In such cases, a patentee would be better suited by requesting a reexamination of the patent if the possibly invalidating prior art is a patent or printed publication under Section 102(b). In such cases, the patentee may also consider reissue proceedings to obtain narrower claims that are clearly valid over the prior art. Unlike disclaimer under Section 253, reexamination and reissue allow the patentee the opportunity to try to overcome the potentially invaliding prior art in prosecution before the U.S. Patent Office, even including an opportunity to amend the patent’s claims. Conversely, disclaimer under Section 253 is a complete admission of invalidity of the disclaimed subject matter. Once subject matter has been disclaimed under Section 253, the patentee cannot recapture the surrendered subject matter by any means, including by reexamination or broadening reissue. As stated by the Federal Circuit: The public is entitled to rely upon the public record of a patent in determining the scope of the patent’s claims. See Vitronics Corp. v. Conceptronic, Inc., 90 F.3d 1576, 1583 (Fed. Cir. 1996). This reliance enables businesses, as well as others, to plan their future conduct in as certain an environment as possible. See id.; see also Sage Prods., Inc. v. Devon Indus., Inc., 126 F.3d 1420, 1424 (Fed. Cir. 1997) (discussing the public-notice function of claims in the context of a doctrine of equivalence analysis). For example, the “recapture rule” prevents a patentee from regaining through reissue subject matter surrendered during prosecution, thus ensuring the ability of the public to rely on a patent’s public record. See In re Clement, 131 F.3d 1464, 1468 (Fed. Cir. 1997). In short, allowing [a patentee] to later recapture some of the subject matter that was explicitly disclaimed would negate the finality and certainty of the disclaimer. We believe that it would be contrary to established principles of statutory interpretation to adopt a reading of 35 U.S.C. § 253 that yielded such a result.60

59. 35 U.S.C. § 253 (2009). 60. Vectra Fitness, Inc. v. TNWK Corp., 162 F.3d 1379, 1384 (Fed. Cir. 1998).

Disclaimer

Claims that are disclaimed under Section 253 at any time during the term of an issued U.S. patent are considered to have never existed in the issued patent. As explained by the Federal Circuit: A statutory disclaimer under 35 U.S.C. § 253 has the effect of canceling the claims from the patent and the patent is viewed as though the disclaimed claims had never existed in the patent. See Altoona Publix Theatres, Inc. v. American Tri-Ergon Corp., 294 U.S. 477, 492 (1935) (“Upon the filing of the disclaimers, the original claims were withdrawn from the protection of the patent laws, and the public was entitled to manufacture and use the device originally claimed as freely as though it had been abandoned”).61

For example, in Vectra Fitness, the Federal Circuit refused to allow a patentee to obtain broader claims than had been disclaimed under Section 253 in reissuance under Section 251.62 In Vectra, the patentee disclaimed under Section 253 the broadest claims of an issued patent.63 The patentee then filed a reissue application under Section 251 more than two years after issuance of the patent, seeking claims that were narrower in scope than the claims originally contained in the patent, but broader in scope than the claims remaining in the patent after the disclaimer under Section 253.64 The U.S. Patent Office issued the reissue claims.65 In an infringement suit on the reissued patent, the defendant claimed that the reissue claims were invalid under Section 251 for being improperly broadened reissue claims on a reissue application filed more than two years from issuance of the patent. The district court agreed, and the Federal Circuit affirmed.66 The patentees argued that the reissue claims were not invalid because they were not broader than the original claims of the patent. The court found instead that the reissue claims were broader than the “original” claims of the patent because the “original” claims of the patent were only the claims that remained after the patentee filed the disclaimer of the broadest original claims.67 The court stated: This court has interpreted the term “considered as part of the original patent” in section 253 to mean that the patent is treated as though the disclaimed claims never existed. See Guinn v. Kopf, 96 F.3d 1419, 1422 (Fed. Cir. 1996) (“A statutory disclaimer under 35 U.S.C. § 253 has the effect of canceling the claims from the

61. 62. 63. 64. 65. 66. 67.

Guinn v. Kopf, 96 F.3d 1419, 1422 (Fed. Cir. 1996). Vectra, 162 F.3d at 1384. Id. at 1381. Id. Id. Id. Id.

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762 Chapter 21 Evaluating and Opining on One’s Own Patent Rights patent and the patent is viewed as though the disclaimed claims had never existed in the patent.”); see also Altoona Publix Theatres, Inc. v. American Tri-Ergon Corp., 294 U.S. 477, 492 (1935) (“Upon the filing of the disclaimers, . . . the public was entitled to manufacture and use the device originally claimed as freely as though [the claim] had been abandoned.”). Consequently, when Vectra invoked section 253 and disclaimed the broadest claims in the ’972 patent, it effectively eliminated those claims from the original patent.68

Because the reissue claims were broader than the “original” claims remaining after disclaimer, the court found the reissue claims to be invalid under Section 251 for broadening claims based on a reissue application filed more than two years after issuance of the patent.69 Another reason for disclaimer under Section 253 is 35 U.S.C. § 288, which provides: Whenever, without deceptive intention, a claim of a patent is invalid, an action may be maintained for the infringement of a claim of the patent which may be valid. The patentee shall recover no costs unless a disclaimer of the invalid claim has been entered at the Patent and Trademark Office before the commencement of the suit.70

Therefore, prior to filing an infringement action, patentees should consider filing disclaimers of claims that are clearly invalid, for example, claims held invalid in prior court actions. However, such disclaimer is not required, “and the sanction for failing thus to disclaim [is] not invalidity of the patent but merely the denial of costs.”71

A. Role of Patent Evaluations and Opinions in Section 253 Disclaimers A patentee may disclaim under Section 253 one or more claims of an issued U.S. patent. In fact, pursuant to Section 288, to able to recover costs in an infringement action, a patentee must disclaim invalid claims of a patent before suing for patent infringement.

68. 69. 70. 71.

Id. at 1383. Id. at 1384. 35 U.S.C. § 288 (2009). Allen Archery, Inc. v. Browning Mfg. Co., 819 F.2d 1087, 1096 (Fed. Cir. 1987) (explaining that prior to enactment of Section 288, failure to disclaim invalid claims from valid claims prior to suing for patent infringement made all claims unenforceable, but that under Section 288, the only sanction for having invalid claims is denial of costs).

Certificates of Correction 763

However, as also discussed above, disclaimer under Section 253 is essentially permanent, with the result being a patent that effectively never had the disclaimed claims and that can never be amended in post-grant proceedings to reclaim the disclaimed subject matter. Thus, careful consideration should be given to whether to disclaim under Section 253. A good practice for determining whether disclaimer under Section 253 is desirable, or whether seeking reexamination or reissue (or merely asserting the patent unaltered) may be preferred is to conduct a complete patent validity evaluation and opinion. Disclaimer should be used only for claims that are clearly invalid. Claims that are not clearly invalid should not be disclaimed under Section 253.

IV. Certificates of Correction In addition to reexamination, reissue, and disclaimer, the U.S. Patent Office offers certificates of correction for issued U.S. patents having clear errors made by the U.S. Patent Office (35 U.S.C. § 254)72 and having clerical, typographical, or other errors of minor character made in good faith by the patentee (35 U.S.C. § 255).73 Section 254 of 35 U.S.C. provides: Whenever a mistake in a patent, incurred through the fault of the Patent and Trademark Office, is clearly disclosed by the records of the Office, the Director may issue a certificate of correction stating the fact and nature of such mistake, under seal, without charge, to be recorded in the records of patents. A printed copy thereof shall be attached to each printed copy of the patent, and such certificate shall be considered as part of the original patent. Every such patent, together with such certificate, shall have the same effect and operation in law on the trial of actions for causes thereafter arising as if the same had been originally issued in such corrected form. The Director may issue a corrected patent without charge in lieu of and with like effect as a certificate of correction.74

Section 255 of 35 U.S.C. provides: Whenever a mistake of a clerical or typographical nature, or of minor character, which was not the fault of the Patent and Trademark Office, appears in a patent and a showing has been made that such mistake occurred in good faith, the Director may, upon payment of the required fee, issue a certificate of correction,

72. 35 U.S.C. § 254 (2009). 73. 35 U.S.C. § 255 (2009). 74. 35 U.S.C. § 254 (2009).

764 Chapter 21 Evaluating and Opining on One’s Own Patent Rights if the correction does not involve such changes in the patent as would constitute new matter or would require re-examination. Such patent, together with the certificate, shall have the same effect and operation in law on the trial of actions for causes thereafter arising as if the same had been originally issued in such corrected form.75

Importantly, certificates of correction are to be used only: (a) in cases of clear error by the U.S. Patent Office where the error is clearly apparent from the prosecution history of the patent; or (b) in cases of clerical, typographical, or other errors of minor character that were made in good faith by the patentee. Certificates of correction should not be used as a substitute for reexamination, reissue, or disclaimer. In fact, improper certificates of correction may lead to invalidity of patent claims and loss of opportunities to pursue proper post-issuance patent correction under other provisions of the U.S. patent statute. For example, in Superior Fireplace a patentee sought a certificate of correction for an error that was of a nature that could not be corrected by a certificate correction.76 Even though the U.S. Patent Office granted the certificate of correction, in subsequent infringement litigation, the Federal Circuit held that the certificate of correction was invalid, and thus failed to correct a critical limitation of key claim of the patent. This holding led the court to find there was no infringement of the uncorrected claim. The court noted that the error probably could have been corrected by a broadening reissue application, if the patentees had filed such an application within the two-year period for doing so. However, more than two years had passed since issuance of the patent by the time the court ruled that the certificate of correction was invalid. Therefore, the patentees were prevented from filing for a broadening reissue that could perhaps have properly corrected their patent. The result of the case was that the patentee’s competitors were free to make, use, sell, and import fireplaces free of infringement provided they avoided the scope of the uncorrected claims. Superior Fireplace stands as an important cautionary tale that improper use of certificates of correction, even if granted by the Patent Office, can have far-reaching negative consequences. More specifically, Superior Fireplace concerned a patent to a fireplaces and a claim limitation to “rear walls” of a fireplace.77 During prosecution of the patent, the Patent Examiner made an Examiner’s Amendment clearly changing the claim term rear wall to rear walls.78 “The examiner’s amendment . . . reminded Superior that ‘should the changes and/or additions be unacceptable

75. 76. 77. 78.

35 U.S.C. § 255 (2009). Superior Fireplace Co. v. Majestic Prods. Co., 270 F.3d 1358 (Fed. Cir. 2001). Id. at 1363. Id.


to applicant, an amendment may be filed.’ Superior did . . . not list any amendments to the claim term ‘rear walls.’ ”79 The patent issued having the term rear walls in the relevant claim. The patentee first filed a request for Certificate of Correction Patent Office Mistake under Section 254, seeking to have the term rear walls changed to rear wall. “The PTO denied this request, stating in part that ‘the patent is printed in accordance with the record in the Patent and Trademark Office of the application as passed to issue by the examiner.’ ”80 The patentee then filed a request for certificate of correction patentee’s mistake under Section 255, which the Patent Office granted, making the requested correction of the claim term rear walls to rear wall.81 The patentee then sued a competitor selling a fireplace having a single rear wall.82 The district court held that the certificate of correction was invalid because the claim term rear walls was clearly amended from singular to plural by the Patent Office without the patentee objecting, thus ruling out a certificate of correction under Section 254 (Patent Office mistake). Further, the court held that the prosecution history of the patent failed to show that the term was of a clerical, typographical, or minor nature.83 Therefore, the court found that the accused infringing fireplaces did not infringe the patent literally because the claim called for rear walls and the accused fireplaces had only a single wall. The court also found no infringement under the doctrine of equivalents because the patentee “had not offered ‘one shred of evidence,’ ‘had cited to no authority, presented no facts, and had made virtually no argument’ to support recovery under the doctrine of equivalents (“DOE”).”84 On appeal, the patentee argued that the certificate of correction was proper and, therefore, that the accused fireplaces infringed the patent. The Federal Circuit affirmed the district court’s decision that the certificate of correction was invalid and, thus, that there was no infringement.85 The court found that the patent’s prosecution history did not support a finding that the alleged “error” to be corrected by the certificate of correction under Section 255 was of a clerical, typographical, or minor nature. Noting that changing the claim term rear walls to rear wall would be a broadening change to the claim, the Superior Fireplace court first addressed the issue of whether certificates of correction could be used to broaden claims. The court ruled that regarding broadening claim changes due to clerical or typographical mistakes under Section 255:

79. 80. 81. 82. 83. 84. 85.

Id. at 1364. Id. Id. Id. (“both parties agreed that the accused devices do not contain more than one rear wall.”). Id. Id. Id.

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Chapter 21 Evaluating and Opining on One’s Own Patent Rights Although § 255, unlike § 251, does not expressly deal with broadening corrections, the words of § 255 do not preclude broadening corrections. We are hesitant to impose so great a limitation without express indication from the statute. Accordingly, we interpret § 255 to allow broadening corrections of clerical or typographical mistakes.86

Next, the court construed Section 255’s provision “a mistake of a clerical or typographical nature,” particularly in the context of change in claim language that broadens a claim. The court considered the issue in the context of the other statutory means of the U.S. Patent Office for correcting patents postissuance, Sections 215–256 (e.g., reexamination, reissue, and disclaimer),87 focusing on broadening reissue corrections under Section 251.88 The court noted that the policy considerations behind broadening corrections under Section 251 stress the importance of public notice and public reliance, based on the evidence in a patent’s prosecution history. The court explained: Section 251 addresses the correction of an “error” and it is understood that corrections under § 251 can result in the broadening of a claim. 35 U.S.C. § 251 (1994 & Supp. V 1999) (allowing correction of an error in which “the patentee claimed . . . less than he had a right to claim”). The patentee’s right to broaden a claim is not absolute, however. First, § 251 requires that the broadened claim be supported by the original specification. Id. (allowing a reissue only “for the invention disclosed in the original patent”). Second, § 251 precludes a patentee from applying for a broadening reissue more than two years after a patent has issued. 35 U.S.C. § 251 (1994) (“No reissued patent shall be granted enlarging the scope of the claims of the original patent unless applied for within two years from the grant of the original patent.”). Third, and most important for our analysis, Congress further protected the public by providing intervening rights for the public with respect to claims that were broadened under § 251. 35 U.S.C. § 252 (Supp. V 1999) (providing intervening rights); Seattle Box Co. v. Indus. Crating & Packing, Inc., 731 F.2d 818, 829–30 (Fed. Cir. 1984) (discussing the intervening rights of § 252). This statutory scheme reveals Congress’ concern for public notice and for protecting the public from the unanticipated broadening of a claim. Section 251 itself provides only minimal notice for broadening reissues, requiring simply that the original specification support the broadened claim. Such a minimal requirement is also implicit in § 255’s requirement that reexamination not be required. But Congress displayed a greater concern for public notice in §§ 251 and 252 by insulating the public from this lack of effective notice through the

86. Id. at 1370 (emphasis added). 87. Id. 88. Id. at 1370–71.

Certificates of Correction 767 provision of, first, a two-year limit on broadening reissues and, second, intervening rights. We are mindful that our interpretation of § 255 must not frustrate Congress’ objectives in § 251 and § 252. See Vectra Fitness, 162 F.3d at 1384 (interpreting § 253 in light of § 251, so as to ensure that the notice function of § 251 was not frustrated, stating that “after the two-year window for broadening reissues, the public should be able to rely on the scope of non-disclaimed claims”). Having already determined that broadening corrections are encompassed in § 255, at least in certain circumstances, it is here that we place the weight of § 251 and § 252. Sections 251 and 252 evince the clear intent of Congress to protect the public against the unanticipated broadening of a claim after the grant of the patent by the PTO. It would be inconsistent with that objective to interpret § 255 to allow a patentee to broaden a claim due to the correction of a clerical or typographical mistake that the public could not discern from the public file and for which the public therefore had no effective notice. Such a broadening correction would leave the public without effective notice, without the constraint of a two-year time bar, and without the hope of intervening rights. This court has previously noted the propriety of independently considering the public notice function in interpreting the patent statutes. Vectra Fitness, 162 F.3d at 1384 (“Moreover, an additional consideration also weighs against the interpretation of the statutory scheme [, involving § 251 and § 253,] for which Vectra argues. The public is entitled to rely upon the public record of a patent in determining the scope of the patent’s claims.”). Both the Supreme Court and this court have highlighted the importance of the notice function of patent claims. Warner-Jenkinson Co. v. Hilton Davis Chem. Co., 520 U.S. 17, 29 (1997) (discussing the impact of the doctrine of equivalents on “the definitional and public-notice functions of the statutory claiming requirement”); Festo Corp. v. Shoketsu Kinzoku Kogyo Kabushiki Co., Ltd., 234 F.3d 558, 575 (Fed. Cir. 2000) (en banc) (stating that “the notice function of patent claims has become paramount”), cert. granted, 121 S. Ct. 2519 (2001). Placing due weight on the public notice function of patent claims suggests that we should interpret § 255 to allow a broadening correction of a typographical error only where it is clearly evident from the specification, drawings, and prosecution history how the error should appropriately be corrected. Such an interpretation of § 255 insures that the public is provided with notice as to the scope of the claims. Cf. Biotec Biologische Naturverpackungen GmbH & Co. KG v. Biocorp, Inc., 249 F.3d 1341, 1348 (Fed. Cir. 2001) (applying a similar standard to the identification of mistakes in the prosecution history, the appropriate correction of which is both clear and affects claim scope, stating that “an error in the prosecution record must be viewed as are errors in documents in general; that is, would it have been apparent to the interested reader that an error was made, such that it would be unfair to enforce the error” (emphasis added)). [A contrary] inference cannot override our obligation to interpret § 255 to comport not only with § 254, but with the overall statutory scheme—encompass-

768

Chapter 21 Evaluating and Opining on One’s Own Patent Rights ing and embodied particularly in § 251 and § 252—protecting the public against the unanticipated broadening of a claim and giving proper credence to the public notice function. For these reasons, despite the fact that § 255 does not explicitly reference the prosecution history, we deem it necessary to interpret this statutory section to contain this implicit, extra-textual requirement. . . .89

The Federal Circuit concluded: Accordingly, we interpret § 255 to require that a broadening correction of a clerical or typographical error be allowed only where it is clearly evident from the specification, drawings, and prosecution history how the error should appropriately be corrected.90

In applying this interpretation of certificates of correction under Section 255 to the facts of Superior Fireplace, the Federal Circuit affirmed the district court’s holding that the Section 255 certification of correction was invalid: Looking to the prosecution history, we take note of two key facts. First, the examiner changed “rear wall” to “rear walls” in an examiner’s amendment after a telephonic interview that was scheduled for the purpose of discussing prior art. The clear inference is that the examiner and the patentee agreed that such a change was necessary to overcome the prior art. That inference is buttressed by the fact that Superior did not object to the change, even though the examiner’s amendment itself reminded Superior of its right to do so. . . . These portions of the prosecution history appear to dispel the possibility that the change from “rear wall” to “rear walls” was a mistake. In conclusion, the claim limitation in question is itself syntactically correct and on its face raises no question of a mistake. The rest of the claim, the other claims and the written description and drawings do not make it clearly evident that the “rear walls” limitation is a mistake and should have been “rear wall.” Furthermore, the prosecution history provides compelling evidence that “rear walls” was the correct phrase. Thus, the requested correction of the alleged mistake was not apparent from the specification, drawings, and prosecution history. The alleged mistake is, therefore, not a clerical or typographical mistake correctable under § 255.91

The Federal Circuit next determined whether the broadening change in Superior Fireplace met Section 255’s provision that a certificate of correction

89. Id. at 1370–72 (emphasis added). 90. Id. at 1373 (emphasis added). 91. Id. at 1374–75 (emphasis added).


may cover “mistakes of a minor character.” The court quickly concluded that by its plain meaning, Section 255 only covers mistakes of a minor nature, and that mistakes that change claim scope, especially to broaden claim scope, cannot be of a minor nature: “Minor” is commonly defined as “lesser in importance . . . [or] seriousness. . . .” The American Heritage College Dictionary 869 (3d ed. 1993). The scope of a patent claim is its very essence, and that with which the patentee and any competitors are most concerned. A mistake that, if corrected, would broaden the scope of a claim must thus be viewed as highly important and thus cannot be a mistake of “minor character.” Accordingly, based on the plain meaning of the statutory language, we interpret “a mistake of . . . minor character” to exclude mistakes that broaden a claim.92

Applying this statutory construction to the facts, the Superior Fireplace court held: The district court’s claim construction, with which we agree, found that the corrected claim was broader than the uncorrected claim. We have interpreted the phrase “mistake . . . of minor character” of 35 U.S.C. § 255 to exclude those mistakes, the correction of which would broaden a claim. Since this was such a mistake, we conclude as a matter of law that it was not correctable by a certificate of correction under 35 U.S.C. § 255. . . . We hold that a mistake in a claim the correction of which broadens the scope of coverage of that claim and is not clearly evident from the specification, drawings, and prosecution history is not a “mistake of a clerical or typographical nature” subject to correction under 35 U.S.C. § 255. We also hold that a mistake the correction of which broadens a claim is not a “mistake of . . . minor character” subject to correction under 35 U.S.C. § 255. Applying these interpretations, we conclude that the correction effected by Superior, the effect of which broadens claim 1, and is not clearly evident from the specification, drawings, and prosecution history, was not correctable under 35 U.S.C. § 255. Accordingly, we hold that the certificate of correction is invalid.93

The court then affirmed the holding of the district court finding noninfringement by the accused fireplaces having only one rear wall.94

92. Id. at 1375 (emphasis added). 93. Id. at 1376. 94. Id. at 1378.


Importantly, the Federal Circuit pointed out in Superior Fireplace that the patentee might have been able to broaden correctly the scope of the patent’s claims to rear wall had it sought a broadening reissue under Section 251 within two years of issuance of the patent: We note that both [certificate of correction] requests were filed and the certificate was granted less than two years after the 534 patent issued. Accordingly, Superior was within the two-year window for broadening reissues under 35 U.S.C. § 251, had it elected to pursue that route.95

However, because the patentee chose the improper means of seeking a certificate of correction, by the time the court held that the certificate of correction was invalid, more than two years had passed since issuance of the patent. Therefore, the patentee was left with a patent with claims clearly covering only fireplaces having rear walls, leaving its competitors to freely make, use, sell, and import fireplaces having only a single wall. Another issue in the context of certificates of correction is whether courts themselves may correct errors in patents. As indicated by the Federal Circuit: Many years before the enactment of 35 U.S.C. §§ 255 and 254, which provide for corrections of mistakes by the patentee (section 255) and the PTO (section 254), the Supreme Court held that, in a patent infringement suit, the courts could properly interpret a patent to correct an obvious error. I.T.S. Rubber Co. v. Essex Rubber Co., 272 U.S. 429 (1926) (“Essex”). . . . Nothing in the enactment of either section 255 or 254 suggests that Congress intended to overrule Essex or to deny limited correction authority to the district courts. . . . Although we conclude that Congress intended to preserve the authority of the district courts to correct errors, we do not think that Congress intended that the district courts have the authority to correct any and all errors that the PTO would be authorized to correct under sections 254 and 255.96

95. Id. at 1364 (emphasis added). 96. Novo Indus., L.P. v. Micro Molds Corp., 350 F.3d 1354–56 (Fed. Cir. 2003) (footnotes omitted) (reversing a district court’s determination of infringement of a claim, instead finding the claim invalid for indefiniteness under 35 U.S.C. § 112, second paragraph, and holding that the indefiniteness could not be corrected by the court).


In conclusion, the Federal Circuit stated: We therefore conclude that the district court can correct only Essex-type errors. A district court can correct a patent only if (1) the correction is not subject to reasonable debate based on consideration of the claim language and the specification and (2) the prosecution history does not suggest a different interpretation of the claims.97

When an error in a patent is more than that defined above by the Novo court, U.S. courts do not have power to correct patents.98 Only the patentee may correct such errors, and this may only be done through the U.S. Patent Office’s post-issuance correction provisions (reexamination, reissue, disclaimer, and certificates of correction).99 Finally, certificates of correction become a part of the corrected patent and are given effect by courts only as of the date on which the Patent Office issues the certificate of correction.100 Patents are construed in uncorrected form until the Patent Office issues a certificate of correction, which is then applied only prospectively.101 For example, in Harlequin, the Federal Circuit addressed a situation in which a certificate of correction under Section 254 (Patent Office mistake) adding critical subject matter to a patent’s specification was not issued until after a patent infringement suit was filed.102 The Federal Circuit vacated the district court’s judgment of infringement and remanded the case for the district court to determine whether prior to issuance of the certificate of correction, the claims were invalid for failing to satisfy the best mode and enablement requirements of 35 U.S.C. § 112, first paragraph. We vacate the judgment in favor of Southwest that was based upon the jury’s verdict that Harlequin . . . infringed claim 1 of the ’257 patent . . . and remand the case to the district court for further proceedings. We do so because the certificate of correction that added the Program Printout Appendix to the ’257 patent is not effective for purposes of this lawsuit. On remand, the district court must determine whether, in the absence of the Program Printout Appendix, claim 1 of the ’257 patent is invalid for purposes of this action because the specification of the

97. 98. 99. 100. 101. 102.

Id. at 1357. Id. Id. Southwest Software, Inc. v. Harlequin Inc., 226 F.3d 1280, 1294 (Fed. Cir. 2000). Id. Id. at 1277.

772

Chapter 21 Evaluating and Opining on One’s Own Patent Rights ’257 patent fails to satisfy the best mode and enablement requirements of 35 U.S.C. § 112, P 1.103,104

A. Role of Patent Evaluations and Opinions in Certificates of Correction Patent evaluations and opinions play a key role in determining what type of post-issuance correction should be taken if a U.S. patent issues with an error. This is especially critical in determining whether to seek correction by requesting a certificate of correction. As discussed above, a certificate of correction should be sought only: (a) in cases of error by the U.S. Patent Office where the error is clearly apparent from the prosecution history of the patent; and (b) in cases of clerical, typographical, or other errors of minor character that were made in good faith by the patentee. Making this determination necessarily requires the patentee to thoroughly review the issued patent’s prosecution history (as well as the specification and claims) and determine whether the nature of the error is clearly and objectively apparent from the intrinsic evidence. Moreover, this determination as to whether to a request a certificate of correction under Section 255 (patentee’s mistake) necessarily requires an evaluation and opinion as to whether the desired correction broadens the scope of the corrected patent’s claims. Doing so requires a complete claim construction, including a review of the intrinsic evidence including the prosecution history, the specification, the other claims, and the ordinary meaning of the clam terms. Moreover, it requires a comparison of the proposed corrected claim to the existing claim to ascertain whether a requested change will result in broadening of one or more claims. If a correction under Section 255 broadens the scope of one or more claims of an issued U.S. patent, Federal Circuit law only allows for a broadening correction under Section 255 where the error is a typographical or clerical one, and where both the error and its correction are clearly and objectively apparent from the prosecution history and other intrinsic evidence of the patent. If this is not the case, a certificate of correction under Section 255 is not valid and should not be sought, as the Federal Circuit has held that a correction under Section 255 that results in broadening claim scope cannot be “of minor character.” Where corrections are necessary to a patent that may result in broadening

103. Id. at 1299 (emphasis added). 104. Id. at 1297 (however, the court noted, “we point out that, for any cause of action arising after April 1, 1997, the date the certificate of correction issued, the certificate will be treated as part of the original patent. Therefore any invalidity arising from the absence of the Program Printout Appendix only affects causes arising before the certificate issued. Put another way, if claim 1 is found to have been invalid without the Program Printout Appendix, the invalidity ceased on April 1, 1997, when the PTO issued the certificate of correction.”).


claim scope, one should seek a broadening reissue under Section 251, rather than correction under Section 255. However, it must be kept in mind that requests for broadening reissues under Section 251 must be filed with the U.S. Patent Office within two years of issuance of the subject patent.

V. Citation of Prior Art In addition to the citation of prior art in a Request for Reexamination, prior art may also be cited in the prosecution history of a patent without a reexamination being requested. 35 U.S.C. Section 301,105 provides: Any person at any time may cite to the Office in writing prior art consisting of patents or printed publications which that person believes to have a bearing on the patentability of any claim of a particular patent. If the person explains in writing the pertinency and manner of applying such prior art to at least one claim of the patent, the citation of such prior art and the explanation thereof will become a part of the official file of the patent. At the written request of the person citing the prior art, his or her identity will be excluded from the patent file and kept confidential.106

As provided by Section 301, “any person” may make such a citation. This includes the patent owner and third parties.107 As also provided by Section 301, “[a]t the written request of the person citing the prior art, his or her identity will be excluded from the patent file and kept confidential.”108 Presumably, this includes the patentee as well as third parties. Although Section 301 states that a citation may be made “at any time,” the Patent Office has construed this to be at any time during enforceability of the subject patent.109 Additionally, as with prior art references relied upon to Request a Reexamination, prior art references in a Section 301 citation request must be documentary prior art only (i.e., U.S. patents and printed publications under 35 U.S.C. § 102(b)).110

105. 106. 107. 108. 109.

35 U.S.C.S. § 301 (2009). Id. Id.; 37 C.F.R. § 1.501 (2009). 35 U.S.C.S. § 301 (2009). See M.P.E.P. § 2204 (8th ed., vol. 2, 2008) (“The period of enforceability is the length of the term of the patent plus the 6 years under the statute of limitations for bringing an infringement action (35 U.S.C. 286). In addition, if litigation is instituted within the period of the statute of limitations, citations may be submitted after the statute of limitations has expired, as long as the patent is still enforceable against someone.”). 110. 35 U.S.C.S. § 301 (2009); for other requirements of a Section 301 citation, such as service on the patent owner, see, e.g., M.P.E.P. §§ 2201–06 (8th ed., vol. 2, 2008).


Importantly, it is insufficient to merely submit a prior art reference. A citation under Section 301 will only become part of the official file history of the patent “[i]f the person explains in writing the pertinency and manner of applying such prior art to at least one claim of the patent. . . .”111 and the Patent Office accepts this assertion. Therefore, the Patent Office substantively examines citations under Section 301 and decides whether the prior art should be made of record. If the Patent Office determines that the written explanation is sufficient, both the cited reference and the written explanation are made of record.112 However, the Patent Office cautions: A prior art citation is limited to the citation of patents and printed publications and an explanation of the pertinency and applicability of the patents and printed publications. This may include an explanation by the patent owner as to how the claims differ from the prior art. It may also include affidavits and declarations. The prior art citation cannot include any issue which is not directed to patents and printed publications. Thus, for example, a prior art citation cannot include a statement as to the claims violating 35 U.S.C. 112, a statement as to the public use of the claimed invention, or a statement as to the conduct of the patent owner. A prior art citation must be directed to patents and printed publications and cannot discuss what the patent owner did, or failed to do, with respect to submitting and/or describing patents and printed publications, because that would be a statement as to the conduct of the patent owner. The citation also should not contain argument and discussion of references previously treated in the prosecution of the invention which matured into the patent or references previously treated in a reexamination proceeding as to the patent. If the prior art citation contains any issue not directed to patents and printed publications, it should not be entered into the patent file, despite the fact that it may otherwise contain a complete submission of patents and printed publications with an explanation of the pertinency and applicability. Rather, the prior art citation should be returned to the sender. . . .113

Additionally, if a reexamination is pending when the art is submitted under Section 301, it will only be made of record during the reexamination if it is submitted by the patent owner or the reexamination requester. Other submissions

111. Id. 112. See M.P.E.P. § 2206 (8th ed., vol. 2, 2008). 113. M.P.E.P. § 2205 (8th ed., vol. 2, 2008) (emphasis added).


under Section 301 made during a reexamination will be made of record only upon completion of the reexamination.114 The importance of citing references under Section 301 is that, if accepted by the Patent Office, the art and written reasons become part of the official prosecution history of the subject patent. Therefore, they become intrinsic evidence that may be considered by a court when construing the claims of the subject patent.115

A. Role of Patent Evaluations and Opinions for Citing Art Under Section 301 As discussed above, a citation under Section 301 will only become part of the official file history of the patent “[i]f the person explains in writing the pertinency and manner of applying such prior art to at least one claim of the patent. . . .”116 Additionally, the written explanation for entering the cited prior art “should not contain argument and discussion of references previously treated in the prosecution of the invention which matured into the patent or references previously treated in a reexamination proceeding as to the patent.”117 Thus, preparing a Section 301 citation of prior art that meets the requirements of the U.S. Patent Office for inclusion in the official record of a patent necessarily requires a claim construction for at least one subject claim to which the reference applies, an analysis of the subject prior art, and an analysis and opinion of validity based on applying the prior art to the construed claims. Further, it is necessary to review the patent’s prosecution history to be certain that the written reasons submitted with the Section 301 citation request do not repeat arguments and discussions of the references previously treated in the prosecution history of the subject patent. Additionally, although the law is not clear on this issue, because the U.S. Patent Office (and not a U.S. court) decides whether the cited reference is pertinent, the written reasons submitted with a citation request under Section 301 should likely take into account two issues that differ from invalidity analyses and opinions between the Patent Office and U.S. court: For purposes of complying with Section 301: (a) it is likely that the claims are to be given

114. See M.P.E.P. § 2204. 115. See, e.g., Moleculon Res. Corp. v. CBS, Inc., 793 F.2d 1261, 1270 (Fed. Cir. 1986) (holding that written statements accompanying Section 301 citations may be considered in claim construction). 116. 35 U.S.C.S. § 301 (2009). 117. M.P.E.P. § 2205.

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their broadest reasonable interpretation, consistent with the specification;118 and (b) it is likely that there is no presumption the claims are valid.119 Citation by a patent owner of prior art under Section 301, without a subsequent request for reexamination or reissue, can provide a low cost alternative to reexamination or reissue. However, Section 301 citations without reexamination or reissue requests made by a patentee are risky for a number of reasons. The Patent Office does allow a Section 301 citation to include “an explanation by the patent owner as to how the claims differ from the prior art. It may also include affidavits and declarations.”120 However, unlike reexamination or reissue proceedings, Section 301 citations alone do not allow the patent owner to amend the claims or to engage in any discourse with the U.S. Patent Office. Thus, following a patentee’s citation of prior art under Section 301, a third party may file a 301 citation on the same art, and in its written statement argue as to why the art invalidates the claims of the subject patent. Hence, a patentee’s citing prior art against its own patent under Section 301 alone could result in third parties filing into the intrinsic evidence of the patent rebuttals to the patentee’s position. Therefore, at least because a Section 301 citation alone does not allow the patentee to amend the claims to potentially overcome the prior art, these citations alone are not recommended in situations in which the cited prior art may arguably affect the patentability of claims that may arguably be amended to overcome the cited art.

VI. Citation of Court Decisions Section 290 of the U.S. patent statute provides: The clerks of the courts of the United States, within one month after the filing of an action under this title shall give notice thereof in writing to the Director, setting forth so far as known the names and addresses of the parties, name of the inventor, and the designating number of the patent upon which the action has been brought. If any other patent is subsequently included in the action he shall give like notice thereof. Within one month after the decision is rendered or a judgment issued the clerk of the court shall give notice thereof to the Director.

118. Cf. In re Swanson, 540 F.3d 1368, 1375–76, 1379–80 (Fed. Cir. 2008); In re Trans Texas Holdings Corp., 498 F.3d 1290, 1298 (Fed. Cir. 2007); In re Yamaoto, 740 F.2d 1569, 1571 (Fed. Cir. 1984) (all holding that in ex parte reexamination, unlike in litigation, claims are to be given their broadest reasonable interpretation). 119. Cf. Laitram Corp. v. NEC Corp., 952 F.2d 1357, 1360 (Fed. Cir. 1991); In re Etter, 756 F.2d 852, 855–59 (Fed. Cir.) (en banc) (both holding that there is no presumption of validity for a patent in ex parte reexamination). 120. M.P.E.P. § 2205 (8th ed., vol. 2, 2008).

Citation of Court Decisions 777 The Director shall, on receipt of such notices, enter the same in the file of such patent.121

In addition to the provisions of Section 290, the U.S. Patent Office will also include the following litigation-related materials in the prosecution history of a U.S. patent: The Office will accept at any time from any party for placement in the patent file, submissions of the following: copies of notices of suits, copies of notices regarding other proceedings involving the patent and copies of decisions from litigations or other proceedings involving the patent. The Office will also accept for entry into the patent file other court papers, or papers filed in the court, from litigations or other proceedings involving the patent. The decisions from litigations or other proceedings include final court decisions (even if the decision is still appealable), decisions to vacate, decisions to remand, and decisions as to the merits of the patent claims. Non-merit decisions on motions such as for a new venue, a new trial/discovery date, or sanctions will not be entered into the patent file, and will be expunged from the patent file by closing the appropriate paper if they were entered before discovery of their nature. Further, papers filed in the court from litigations or other proceedings involving the patent will not be entered into the patent file (and will be expunged if already entered) if they provide a party’s arguments, such as a memorandum in support of summary judgment. If the argument has an entry right in the reexamination proceeding, it must be submitted via the vehicle (provision(s) of the rules) that provides for that entry right. It is not required nor is it permitted that parties submit copies of copending reexamination proceedings and applications (which copies can be mistaken for a new request/filing); rather, submitters may provide a notice identifying the application/proceeding number and its status. Any submission that is not permitted entry will be returned, expunged, or discarded, at the sole discretion of the Office. It is to be noted that if the Office, in its sole discretion, deems the volume of the papers filed from litigations or other proceedings to be too extensive/ lengthy, the Office may return, expunge, or discard, at its sole discretion, all or part of the submission. In such an instance, a party may limit the submission in accordance with what is deemed relevant, and resubmit the papers. Such submissions must be provided without additional comment. Persons making such submissions must limit the submission to the notification and not include further arguments or information. It is to be understood that highlighting of certain text by underlining, fluorescent marker, etc., goes beyond bare notice of the prior or concurrent proceedings. Any proper submission will be promptly placed on record (entered) in the patent file. . . .

121. 35 U.S.C.S. § 290 (2009).

778 Chapter 21 Evaluating and Opining on One’s Own Patent Rights It is to be further noted that 35 U.S.C. 290 is directed to “courts of the United States.” Accordingly, any submission of papers from a court outside the United States (a foreign jurisdiction) will be returned, expunged or discarded, at the sole discretion of the Office.122

Where court decisions are available that favorably address one’s own patents (such as favorable claim constructions and/or decisions on validity), it is advisable to cite these decisions under these provisions. Doing so makes the decision (including any claim construction and validity holdings) part of the prosecution history of the patent. Should the patent be later challenged, either in court or in reexamination, the court decision (including any claim construction and validity holdings) may be considered in these post-grant challenges.

VII. Practice Points A. Prefiling Infringement Evaluations and Opinions Should Be Done Prior to Requesting Reexamination In order for a reexamination to be declared, the patentee requester must show both: (a) why the cited reference raises a substantial question of patentability of at least one claim of the subject patent; and (b) that the substantial question of patentability was not previously addressed in the prosecution history of the patent. This necessarily requires a complete claim construction, analysis of the prior art, and an analysis and opinion of invalidity based on application of the prior art to the construed claims. In the event prior art is being used that has been cited in the prosecution of the patent, it is especially important to review thoroughly the patent’s prosecution history. Then, it is important to provide with the Request a detailed description of the prosecution history of the patent, showing that the substantial new question of patentability raised in the Request was not previously considered in the patent’s prosecution history. Additionally, the claim construction and invalidity analysis for a Request for Reexamination must take into account two issues that differ in reexamination invalidity analyses and opinions as compared with invalidity analyses and opinions for most other purposes of this treatise, such as for predicting whether a reasonable court should hold a patent’s claims to be invalid: For

122. M.P.E.P. § 2207 (8th ed., vol. 2, 2008) (emphasis in original).

Practice Points

reexamination purposes: (a) the claims are to be given their broadest reasonable interpretation consistent with the specification; and (b) there is no presumption that the claims are valid.

B. Reexamination Must Be Based on Documentary Prior Art, but May Also Include, in Conjunction with Documentary Prior Art, Admissions by the Patentee (in Prosecution or Court) Related to Other Invalidity Bases While reexamination may only be based on documentary prior art (patents and printed publications under Section 102(b)), the reexamination Examiner may also consider in conjunction with the documentary prior art, admissions made by the patentee in prosecution or in court related to other invalidity bases, such as prior sale and public use. Therefore, prior to requesting reexamination, the patentee should consider whether any such admissions exist, and if so, the potential effect they may have in reexamination.

C. Prefiling Infringement Evaluations and Opinions Should Be Done Prior to Requesting Reissue, Including Paying Close Attention to the Limitations on Reissue, Including the Recapture Rule Reissue is available only under limited circumstances with the Federal Circuit sharply delineating a legion of restrictions on the availability of reissue to correct patents post-issuance. Further, claims issued by the Patent Office in reissue that violate these restrictions may be held invalid by U.S. courts. A finding by a court that a reissue claim is invalid may result in the court holding that an accused product or process does not infringe the patent, thus allowing competitors to avoid infringement of the patent. A major limitation to reissue is the recapture rule, which prohibits reissue claims from recapturing subject matter that was clearly surrendered by the patentee during prosecution of the original patent, either by amendment or by argument. Courts use the following process to determine whether to apply the recapture rule: Application of the recapture rule is a three-step process. The first step is to determine whether and in what aspect the reissue claims are broader than the patent claims. The second step is to determine whether the broader aspects of the reissued claim related to surrendered subject matter. Finally, the court must

779

780 Chapter 21 Evaluating and Opining on One’s Own Patent Rights determine whether the reissued claims were materially narrowed in other respects to avoid the recapture rule.123

Courts have explained that a major reason for refusing to allow a patentee to recapture subject matter that was surrendered during prosecution is to allow the public to rely on the patentee’s conduct in the prosecution history of a patent in order to delineate the meets and bounds of a patent’s claims. Therefore, prior to applying for any reissue, a complete patent evaluation and opinion must be conducted for any proposed reissue claims to determine whether the proposed reissue claims fall outside the court’s three-point test for the recapture rule. This necessarily includes a complete claim construction based on the intrinsic evidence (especially the objective teaching of the patent’s prosecution history) and a determination of whether the scope of the proposed reissue claims covers any subject matter surrendered by the patentee during the prosecution of the patent, whether by amendment or argument. It may be helpful in evaluating whether proposed reissue claims violate the recapture rule to keep in mind that the exercise is similar to determining in a patent infringement action whether prosecution history estoppel applies to prohibit claiming under the doctrine of equivalents subject matter that was surrendered during prosecution. Additionally, the claim construction and invalidity analysis for reissue must take into account two issues that differ between reissue invalidity analyses and opinions and invalidity analyses and opinions for most other purposes of this treatise, such as for predicting whether a reasonable court should hold a patent’s claims to be invalid: For reissue purposes: (a) the claims are to be given their broadest reasonable interpretation consistent with the specification; and (b) there is no presumption the claims are valid.

D. Broadening Reissue Applications Must Be Filed Within Two Years of Issuance of the Original Patent The reissue statute, 35 U.S.C. § 251, paragraph 4, requires that any reissue application that broadens claims must be filed within two years of the issuance of the original patent. Therefore, it is important that well before two years from the issuance of any patent, the patentee consider whether reissue may be desired. If so, a complete evaluation and opinion of the scope of the proposed reissue claims should be performed, including a comparison of the scope of the proposed reissue claims with the scope of the claims in the

123. Pannu v. Storz Instruments, Inc., 258 F.3d 1366, 1370–71 (Fed. Cir. 2001) (citations omitted, quotations omitted).

Practice Points

original patent. Should there be any issue as to whether the proposed reissue claims are broader than the issued claims, a reissue application should be filed within two years of the issuance of the patent.

E. Where Possible, Disclaimer Considerations Should Be Coordinated with Broadening Reissue Requirements The patentee should bear in mind that if any claims of an original U.S. patent are disclaimed under 35 U.S.C. § 253, the basis for determining whether reissue claims under Section 251 are broader than the original claims is the scope of the claims remaining after disclaimer. This is because disclaimed claims are considered to have never been a part of the original patent. Therefore, to the extent possible, disclaimer considerations should be coordinated with reissue considerations. This is especially important where broad claims in the issued patent may be disclaimed and any desired reissue claims may be broader than the claims remaining in the original patent after disclaimer. In such a case, a broadening reissue application must be filed within two years of issuance of the patent because the Patent Office will consider the reissue claims to be broader than the claims of the original patent, which are the claims remaining after disclaimer.

F. Use Caution and Careful Prefiling Evaluation and Opinion Before Disclaiming Under Section 253 Unlike reexamination and reissue post-issuance patent correction means (which allow the patentee to attempt to prosecute amended claims around prior art), disclaimer under Section 253 is essentially a permanent, nonnegotiable elimination of the disclaimed subject matter from the patent. Therefore, disclaimer should be approached with extreme caution and used only in situations in which claims are clearly invalid (e.g., where a court has held claims invalid through the entire appeals process). In situations in which a court has not held claims to be invalid, disclaimer should only be used if the patentee is certain that the disclaimed claims are not patentable. This should only be done after a thorough invalidity evaluation and opinion. Further, in most cases, it is still preferable to address such issues by reexamination or reissue wherein the patentee may seek to obtain amended claims that exclude the invalid subject matter. However, patentees planning on enforcing patents need to consider whether disclaimer under Section 253 may be necessary or appropriate in light of 35 U.S.C. § 288, which provides that in an infringement action, “the patentee shall recover no costs unless a disclaimer of [any] invalid claim has been entered at the Patent and Trademark Office before commencement of

781

782


the suit.”124 Therefore, situations in which disclaimer may be appropriate in light of Section 288 include cases where the patentee is planning on suing for infringement and less than all of the claims have been previously held to be invalid by a court.

G. Certificates of Correction Should Only Be Used in Appropriate Circumstances and Never as Substitutes for Other Post-Issuance Correction Means Certificates of correction should be sought only: (a) in cases of error by the U.S. Patent Office where the error is clearly apparent from the prosecution history of the patent; or (b) in cases of clerical, typographical, or other errors of minor character that were made in good faith by the patentee. Certificates of correction should not be used a substitutes for other, more appropriate post-issuance correction means such as reexamination and reissue. In determining whether to file for a certificate of correction, a patentee should thoroughly review the issued patent’s prosecution history (as well as the specification and claims) and make a determination as to whether the nature of the error is clearly and objectively apparent from the intrinsic evidence. Moreover, a determination as to whether to a request a certificate of correction under Section 255 (patentee’s mistake) necessarily requires an evaluation and opinion as to whether the desired correction broadens the scope of the corrected patent’s claims. This determination also necessarily requires a complete claim construction, including a review of the intrinsic evidence such as the prosecution history, the specification, the other claims, and the ordinary meaning of the clam terms. Moreover, it requires a comparison of the proposed corrected claims to the existing claims to determine whether a requested change will result in broadening of the claimed subject matter. Patentees should keep in mind that a correction under Section 255 that broadens the scope of one or more claims of an issued U.S. patent may only be made where the error is clearly of a typographical or clerical nature, and where both the error and its correction is clearly and objectively apparent from the prosecution history and other intrinsic evidence of the patent. A certificate of correction under Section 255 is not valid, and should not be sought, for situations in which a correction broadens a claim and in which the intrinsic evidence does not clearly show the nature of the error and its correction. The Federal Circuit has held that certificates of correction under Section 255 that result in broadened claim scope are only available for cases of clear typographical or clerical mistakes, and changes that broaden claim scope cannot be “of minor character.”

124. 35 U.S.C.S. § 288 (2009).

Practice Points

Where corrections are necessary to a patent that may result in broadening claim scope, one should seek a broadening reissue under Section 251. However, a broadening reissue under Section 251 must be applied for within two years of issuance of the subject patent.

H. Remember That Prior Art May Be Cited in the Prosecution History of an Issued Patent Without Requesting a Reexamination or Reissue, but Use Caution Under 35 U.S.C. § 301, any person (including the patent holder) may at any time during the enforceable period of an issued U.S. patent submit a citation of documentary prior art125 to the U.S. Patent Office for inclusion in the official prosecution history of the issued U.S. patent. In order for the citation to become part of the official prosecution history, it must be accompanied by written reasons showing how the cited prior art raises issues of patentability of at least one claim of the patent, and that the citation and the issues raised were not previously considered during the prosecution history. Further, the patent owner may submit with the Section 301 citation an explanation as to how the claims differ from the prior art as well as affidavits and declarations in support. If the Patent Office accepts the written reasons, both the cited prior art and the written reasons become part of the official prosecution history of the issued patent. Hence, one may submit prior art into the prosecution history of one’s own U.S. patent under Section 301 without necessarily requesting a reexamination or reissue. However, preparing proper written reasons for including a citation in a patent’s prosecution history under Section 301 necessarily requires a claim construction for at least one claim to which the reference applies, an analysis of the subject prior art, and an analysis and opinion of validity based on application of the prior art to the construed claim(s). Further, it is necessary to review the patent’s prosecution history to be certain that the written reasons submitted with the Section 301 citation request do not repeat arguments and discussions of the references previously addressed in the prosecution history of the patent. Additionally, it should be kept in mind that if a patentee only submits art under Section 301, there is no opportunity to amend the claims to overcome the prior art. Further, following such a submission under Section 301, any third parties may file Section 301 citations on the same art, and in their written statements argue as to why the art invalidates the claims of the subject patent. Thus, if one is citing prior art under Section 301 without requesting reexamination or reissue, it is important to carefully perform a complete validity

125. U.S. patents and printed publications under 35 U.S.C. § 102(b).

783

784


evaluation and opinion and to decide on the strength of the validity position prior to filing the citation. An imprudent Section 301 citation could result in a third party filing into the intrinsic evidence of the patent what is in effect a rebuttal to a patentee’s Section 301 citation. In situations where the prior art arguably affects the validity of one or more claims that arguably could be amended to overcome the art, Section 301 submissions are not recommended. Instead, the patentee should consider requesting reexamination or reissue wherein the claims may be amended to address the prior art.

I. Remember to Cite Favorable Court Decisions in the Prosecution History of One’s Own Patents Where favorable court decisions are available for one’s own patents (especially decisions having favorable claim constructions and/or validity determinations), it is advisable to cite these decisions under Section 290. Doing so makes the decision (including any claim construction and/or validity holdings) part of the prosecution history of the patent. Should the patent be subject to a post-grant challenge later either in court or in reexamination, the court decision (including any claim construction and/or validity holdings) may be considered. Citations under Section 290 are limited to U.S. court decisions only. Thus, non-U.S. proceedings cannot be cited under Section 290.

J. Correction of a Patent by the U.S. Patent Office Does Not Ensure Validity of the Correction in Court All post-issuance corrections made by the U.S. Patent Office are subject to review by U.S. courts, and the issuance of any post-issuance correction by the U.S. Patent Office does not ensure that a court will find the correction valid. The Federal Circuit has repeatedly held U.S. Patent Office post-issuance corrections to be invalid, usually leading to findings of noninfringement and/or patent invalidity. Therefore, patentees must be extremely careful in seeking post-issuance corrections of issued patents, including performing thorough investigations as required by the various statues before seeking correction. Patentees should also keep in mind that issuance of a correction by the Patent Office is no guarantee that the correction will be found valid if the corrected patent is subject to litigation. For example, patentees should keep in mind the cautionary tale of Superior Fireplace,126 wherein a patentee sought a broadening correction under Section 255 (certificate of correction), which the Patent Office granted. In subsequent

126. Superior Fireplace Co. v. Majestic Prods. Co., 270 F.3d 1358 (Fed. Cir. 2001).

Practice Points

infringement litigation, the court held that the certificate of correction broadening the claims was invalid and, thus, the claims were not infringed. However, the Federal Circuit noted that the patentees might have been able to properly broaden the scope of their patent’s claims had they chosen a broadening reissue instead: We note that both [certificate of correction] requests were filed and the certificate was granted less than two years after the 534 patent issued. Accordingly, Superior was within the two-year window for broadening reissues under 35 U.S.C. § 251, had it elected to pursue that route.127

127. Id. at 1364 (emphasis added).

785


CHAP T ER

22 Evaluating and Opining on One’s Own Patent Rights Evaluations and Opinions of Patents in Bankruptcy and Related Issues

I. Overview of U.S. Patents and Bankruptcy

790

II. Limitations on Scope of Chapter

791

III. Initial Steps in Bankruptcy: Audit of U.S. Patent Rights

792

A. Patent Rights Inventory

792

B. Maintain Patent Rights

795

C. Patent Valuation

796

IV. Clearance (Freedom to Operate), Infringement, Validity, and Enforceability Evaluations and Opinions of Patents in Bankruptcy Cases A. Patent Clearance (Freedom to Operate) Evaluations and Opinions

796 797

1. Identification of Potential Purchasers of Patent Rights in Liquidation

797

B. Patent Infringement Evaluations and Opinions

798

1. Infringement of Potential Purchasers of Patent Rights in Liquidation

798

C. Evaluations and Opinions of Patent Validity

799

D. Evaluations and Opinions of Patent Enforceability

799

E. Evaluations and Opinions of Patent Ownership

800

1. Identification of Potential Purchasers of Patent Rights in Liquidation

800

V. Special Patent Issues in Bankruptcy I: Assuming or Rejecting Patent Licenses A. Debtor as Licensee

801 803

1. Assignment of Nonexclusive Patent License by Debtor Licensee

787

803

788 Chapter 22 Evaluating and Opining on One’s Own Patent Rights 2. Assumption of Nonexclusive Patent License by Debtor Licensee

804

a) The “Hypothetical Test” for Assumption of Nonexclusive Patent License by Debtor Licensee

806

b) The “Actual Test” for Assumption of Nonexclusive Patent License by Debtor Licensee

807

c) The “Footstar Approach” for Assumption of Nonexclusive Patent License by Debtor Licensee

807

d) The “Actual Test” Gives the Patent Licensee Debtor Greater Control in Assuming Patent Licenses

809

e) Forums Following the “Hypothetical Test” or the “Actual Test” for Assumption of Nonexclusive Patent Licenses by Debtor Licensees

810

B. Debtor as Licensor: The Intellectual Property Bankruptcy Act of 1988 (11 U.S.C. § 365(n))

810

1. Lubrizol: Pre-Section 365(n) Licensor Debtor Rejection of Patent License

811

2. In Response to Lubrizol: The Intellectual Property Bankruptcy Act of 1988 (11 U.S.C. § 365(n))

812

3. Procedural Aspects of Section 365(n)

812

4. Obligations of Patent Licensor Debtor and Rights of Licensee upon Election by Licensee under Section 365(n)

814

5. Obligations and Waiver of Patent Licensee, and Rights of Licensor Debtor, Upon Election by Licensee under Section 365(n)

815

VI. Special Patent Issues in Bankruptcy II: Effect of Bankruptcy on Security Interests in U.S. Patents

818

VII. Special Patent Issues in Bankruptcy III: Do Not Separately Distribute Exclusionary (Ownership) Rights in a U.S. Patent from the Right to Sue for Infringement of the Patent

823


826

A. Limitations on Scope of Chapter

826

B. U.S. Patent Counsel Should Work with Bankruptcy Counsel on Bankruptcies Involving Companies Owning or Licensing U.S. Patent Rights

826

Evaluating and Opining on One’s Own Patent Rights C. A First Step in Any Bankruptcy Case of a Company Owning or Licensing Patent Rights Should Be a Patent Audit

827

D. Patent Audits Should Include Issued and Enforceable Patents as Well as Other Patent Rights

827

E. Patent License Should Be Characterized in Detail

827

F. Patent Ownership Should Be Investigated in Detail

828

G. The Bankruptcy Debtor’s Patent Attorneys Should Maintain the Company’s Patent Rights

828

H. Use Evaluations and Opinions of U.S. Patents to Create a Patent Landscape from Which to Identify Third Parties That Might Be Especially Interested in Purchasing the Debtor Company’s Patent Rights in Liquidation

829

I. Be Aware of Special Issues in U.S. Bankruptcy Law That Apply to U.S. Patent Rights, Including Executory Contract Issues for Patent Licenses

829

J. Be Aware of Perfection Issues for Security Rights in U.S. Patents

829

K. Be Aware of Special Issues in the Distribution of Patent Rights

830

789


Usage Note: Chapter 18 (Evaluating and Opining on One’s Own Patents: Strategic Patenting, Including Patent Landscapes, Evaluations and Opinions of Patent Clearance (Freedom to Operate), Infringement, Validity, Enforceability, and Ownership) is of particular relevance to Section IV of this chapter. Other chapters of this treatise that relate to this one include claim construction (Chapter 2); infringement (both literal (Chapter 3) and under the doctrine of equivalents (Chapter 4)); indirect infringement (Chapter 5); validity (including anticipation by printed publications (Chapter 6) and other forms of anticipation (Chapter 7); obviousness (Chapter 8) and other forms of invalidity (Chapter 9)); enforceability (Chapter 10); clearance (freedom to operate) opinions (Chapter 12); competency of opinions (Chapter 23); and waiver of attorney-client privilege and work product immunity issues (Chapter 24). Therefore, the reader is referred to these chapters for further information on these specific issues.

I. Overview of U.S. Patents and Bankruptcy In today’s technological age, U.S. patent rights1 are one of U.S. industry’s most valuable assets. Therefore, when companies enter bankruptcy, the proper handling of their U.S. patent rights is of utmost importance. This is best done by assigning at least one competent patent attorney to work with bankruptcy counsel in any bankruptcy involving patent rights. A first step in any bankruptcy case of a company owning U.S. patent rights is a patent audit. These identify and define a company’s U.S. patent rights, evaluate whether the company complies with U.S. patent laws to ensure that its patent rights are legally protected, and assist in the valuation of these rights. It is important that a patent audit be conducted as early as possible in a bankruptcy case because debtor companies may have deficiencies in complying with U.S. patent laws that can affect the enforceability and/or validity of their patent rights. Early discovery of certain deficiencies may allow for their correction, whereas lingering deficiencies can result in loss of substantial patent rights. Once a company’s U.S. patent rights have been identified, their valuation for reorganization or liquidation may be assisted by the performance of one or more evaluations and opinions of clearance (freedom to operate), infringement,

1. In keeping with the scope of this treatise, this chapter addresses only U.S. patent rights, and only U.S. patent and bankruptcy law. Therefore, this chapter is not applicable to (and should not be relied upon regarding) any non-U.S. issues, including, but not limited to, the disposition of non-U.S. patent rights under U.S. bankruptcy law.

Limitations on Scope of Chapter

validity, enforceability, and ownership. These evaluations and opinions assist the company in valuing its patent rights by determining their strength, scope, and overall placement in the patent landscape of the company’s technology. For example, knowing the relevant patent landscape may assist in liquidating a company’s patent rights by identifying third parties that may have especially strong interests in purchasing the company’s patent rights. As another example, competing companies may be particularly interested in acquiring a liquidating or liquidated company’s patent rights to strengthen their competitive positions within a patent landscape. Identification of third parties having specific interests in a company’s patent rights may even result in competitive bidding among multiple third parties desiring to obtain the same patent rights of the debtor company. Finally, this chapter addresses certain issues in bankruptcy law that have particular relevance to U.S. patent rights. These include those related to patent licensing. Patent licenses are typically treated as executory contracts under U.S. bankruptcy law. A bankruptcy trustee or debtor in possession, with court approval, generally may accept or reject an executory contract depending on which will best assist the bankruptcy estate. However, special rules apply to patent licenses as executory contracts in bankruptcy; for example, they are treated differently depending on whether the license is nonexclusive and whether the debtor company is the patent licensee or licensor. This chapter also addresses the perfection of security interests in U.S. patents and how this affects the ability of a bankruptcy trustee or debtor in possession to avoid those security interests. Finally, this chapter discusses issues related to the importance of carefully distributing U.S. patent rights in reorganization or liquidation.

II. Limitations on Scope of Chapter This chapter is not intended to provide a comprehensive guide to U.S. bankruptcy law or how it affects all aspects of U.S. patent rights in bankruptcy. Rather, it is intended to cover the manner in which U.S. patent counsel may assist bankruptcy counsel in reorganizing or liquidating companies owning or licensing U.S. patent rights. This chapter also highlights certain U.S. bankruptcy laws that have specific applications to—and implications for—U.S. patent rights in bankruptcy. In all cases, U.S. patent attorneys should work closely with U.S. bankruptcy counsel. This is extremely important because both U.S. bankruptcy laws and U.S. patent laws are complex and specialized. Therefore, when companies owning or licensing U.S. patent rights file for reorganization or liquidation, they are best served by having both skilled and competent U.S. bankruptcy counsel and U.S. patent counsel.

791


III. Initial Steps in Bankruptcy: Audit of U.S. Patent Rights From a patent perspective, a patent audit is the first step in the bankruptcy of a company owning or licensing U.S. patent rights. The U.S. Bankruptcy Code defines intellectual property as including “invention[s], process[es], design[s], or plant[s] protected under [the U.S. Patent Code] title 35 [35 U.S.C.S. §§ 1, et seq.]; . . . patent application[s]; and . . . plant variet[ies].”2 Therefore, a company’s patent rights under the U.S. Bankruptcy Code include currently enforceable patent rights as claimed in issued and enforceable U.S. patents as well as pre-issuance patent rights, such as those described in pending U.S. patent applications, invention disclosures, and other evidence of invention (such as laboratory notebooks). A company’s U.S. patent rights may also include licensed U.S. patents, especially exclusively licensed patents. Thus, a U.S. patent audit of a company involves the identification, characterization, and valuation of all of a company’s U.S. patent rights, including issued and enforceable U.S. patents, patent applications, invention disclosures, laboratory notebooks, and patent licenses.

A. Patent Rights Inventory The first step in a patent audit is to identify all of a company’s U.S. patent rights. As mentioned above, these include currently enforceable rights claimed in issued and enforceable U.S. patents, as well as pre-issuance patent rights, such as those in pending patent applications, invention disclosures, and other evidence of invention (such as laboratory notebooks). Third party U.S. patent rights licensed by the company, especially those exclusively licensed, should also be included. Rights in issued U.S. patents are usually the easiest patent assets to identify. However, when evaluating these rights, it is important to note the following: (a) whether anything affects the terms of the patents, including anything that may shorten the terms (such as terminal disclaimers) or extend them (such as patent term extensions and patent term restorations); (b) whether the maintenance fees have been timely and correctly paid3 on the issued patents; and (c) whether there are any circumstances that may adversely affect the enforceability or validity of the patents, such as (but not limited to) adverse holdings in patent litigation, discovery of potentially invalidating prior art or

2. 11 U.S.C.S. § 101(35A) (2009). 3. For example, if maintenance fees were paid as a small entity, is the patent owner in fact one under the U.S. Patent Office’s definition of a small entity?

Initial Steps in Bankruptcy: Audit of U.S. Patent Rights 793

other issues adversely affecting enforceability or validity, threatened or actual litigation, interferences, reexaminations, or reissue proceedings. Licensed patent rights should be investigated and characterized by the nature of the license. For example, these questions should be answered: what rights have been licensed? Is the license exclusive? If so, to what extent has exclusivity been granted? Is the exclusivity complete, partial, field-, or regionspecific? Is the license assignable? Are obligations due under the license by both parties post-bankruptcy filing for reorganization or liquidation such that failure of either party to perform would constitute a material breach to the other party? Are royalties due post-filing—or have they been paid in full? Finally, have royalties been properly paid, and have other obligations by both parties been met? A patent audit must also account for any patent rights that have been licensed by the company to third parties. As with patent in-licenses, patent out-licenses should be investigated and characterized by the nature of the license. For example, what rights have been licensed? Is the license exclusive? If so, to what extent has exclusivity been granted? Is the exclusivity complete, partial, field-, or region-specific? Is the license assignable? Are obligations due under the license by both parties post-filing for bankruptcy reorganization or liquidation such that failure of either party to perform would constitute a material breach to the other party? Are royalties due post-filing—or have they been paid in full? Have royalties been properly paid, and have other obligations by both parties been met? Another important issue to examine in a patent audit of a debtor company is the inventorship and ownership of U.S. patent rights. As discussed in detail in Chapter 18, the inventorship of a U.S. patent determines its ownership. Inventors, including co-inventors, are presumed to own patents they invent unless they have assigned their ownership interest, in writing, to another party.4 Typically, inventors who are company employees have obligations to assign their ownership rights to the company for inventions they make for the company. However, this issue requires investigation and confirmation when performing patent audits. The importance of inventorship and ownership of U.S. patents becomes apparent in that under U.S. law, a co-inventor owns an undivided share of an entire patent for which she is a co-inventor. Further, as long as a co-inventor contributed to the invention of at least one claim of a patent, that person has rights to the entire patent.5 Still further, absent an agreement to the contrary,

4. Beech Aircraft Corp. v. Edo Corp., 990 F.2d 1237, 1248 (Fed. Cir. 1993) (ownership initially vests in the named inventors of the patent); Regents of the Univ. of N.M. v. Knight, 321 F.3d 1111, 1119 (Fed. Cir. 2003) (“initial ownership of a patent vests in the inventor by operation of law, § 261 [35 U.S.C. § 261] provides that inventors can assign all or part of their interest in a patent.”) (citation omitted); 35 U.S.C.S. § 261 (2009). 5. 35 U.S.C.S. § 262 (2009).


each co-inventor of a U.S. patent has full rights to license, assign, and otherwise exploit the entire patent without any duty to seek permission from or account to the other co-inventors.6 One example of a situation in which this can occur in bankruptcy is where an invention was made by employees of a debtor company in collaboration with employees of a different company. In such an event, the co-inventors who are not associated with the debtor company may not have an obligation to assign their patent rights to the debtor company. (In fact, they likely have an obligation to assign their patent rights to the company that employed them during the invention of the patent.) In such cases, the subject patent is co-owned by both companies, with each company having full rights to assign, license, or otherwise exploit the patent without accounting to the other. Therefore, the existence of even one co-inventor on a debtor company’s patent who is not under an obligation to assign his or her rights to the company can effectively destroy all commercial value in that patent. This is because a company loses all rights of exclusivity to a patent when even one co-inventor does not assign his or her interest in the patent to the company. If, in such a case, the company attempts to assign or license its rights to the patent to a third party, the co-inventor who is not under an obligation to assign his or her rights to the company may assign or license the patent to a different third party, and under any terms the co-inventor desires. For example, the nonassigning co-inventor could license or assign his or her rights in the patent to a company that is in competition with the third party company obtaining the rights from the debtor company. In fact, the non-assigning party could even dedicate the use of the patent to the public free of charge. Therefore, it is of utmost importance that U.S. patent audits investigate fully the inventorship and ownership of all U.S. patent rights. Further still, patent audits for bankruptcy should investigate and report whether the debtor company has granted any third parties security interests or liens on its patent rights. This includes determining the nature of any security interests, whether they have been properly perfected under applicable UCC requirements, and whether they have been properly recorded with the U.S. Patent and Trademark Office. As discussed in Section VI below, third party security interests in a debtor company’s U.S. patents must be perfected under the UCC in order to trump the hypothetical judicial lien wielded by a debtor company’s trustee or debtor in possession. Finally, the patent audit should determine whether all ownership rights to the company’s patents (including written assignments from the inventors to the company), have been properly recorded with the U.S. Patent Office. In order to have constructive notice effect against third parties, patent

6. Id.

Initial Steps in Bankruptcy: Audit of U.S. Patent Rights 795

assignments must be recorded with and under the requirements of the U.S. Patent and Trademark Office.7 As will become apparent in later sections of this chapter, the information related to these issues can have a major impact on a bankruptcy case. For example, as discussed in Section V below, the details of patent licenses determine how they are handled during bankruptcy. Patent licenses are handled differently in bankruptcy depending on whether the debtor company is the licensor or licensee, whether the license is exclusive, and whether both parties to the license have obligations due under the license post-bankruptcy such that failure of either party to perform would constitute a material breach.

B. Maintain Patent Rights U.S. patent rights are not permanent, and are subject to premature loss if not properly and carefully managed. For example (but in no manner limiting),8 issued patents must be maintained by the payment of maintenance fees to the U.S. Patent Office. Further, U.S. patent applications are subject to a host of deadlines during prosecution that, if missed, may result in the permanent loss of patent rights. Still further, U.S. patent law provides firm deadlines by which patent applications must be filed on technology that is, for example, disclosed or used publically, sold, or described in a printed publication.9 Following a patent audit, at least one patent attorney should be permanently assigned to maintaining the debtor company’s patent rights. This includes identifying all critical issues and dates related to the company’s patent portfolio, including issued patents, pending patent applications, patent licenses, and new inventions. For example, a patent attorney should monitor the progress of all pending patent applications whether they are being handled by outside or inside counsel. This may also involve the attorney herself handling patent applications or arranging for outside counsel’s assistance if for example the company has lost its patent counsel. It is important that the attorney assigned to maintaining the company’s patent portfolio carefully review all of the company’s pending patent applications to ensure that all obligations to the Patent Office have been met.10 The attorney should also review evidence of new inventions (such as invention disclosures) and assure that new patent applications are prepared and filed before any legal deadlines. Additionally, the attorney responsible for maintaining the company’s patent portfolio

7. 35 U.S.C.S. § 261 (2009). 8. For example, see Chapters 6 and 7 for details on events that render inventive subject matter unpatentable under U.S. law. 9. Id. 10. This includes, e.g., ensuring that Information Disclosure Statements have been filed and that ownership assignments have been properly recorded.

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should review the company’s compliance with any patent license obligations (e.g., payment of royalties or duty to maintain licensed patents) and as to whether the company is receiving performance of any acts required by the patent license parties. Careful review and monitoring of a company’s patent portfolio is particularly important in the context of bankruptcy cases because events occurring at a company preceding the filing for reorganization or liquidation may have adversely affected the company’s patent rights. For example, a debtor company may have dismissed or lost employees or outside counsel who were responsible for maintaining the company’s patent portfolio. In addition, a company approaching bankruptcy may not have paid the necessary fees to the U.S. Patent Office to maintain or obtain patent rights. This review should be done as promptly as possible upon filing for bankruptcy reorganization or liquidation because some failures to comply with U.S. Patent Office requirements can be remedied if caught and corrected within specific time frames.

C. Patent Valuation Following a complete inventory of a debtor company’s U.S. patent rights, the next step in a patent audit in bankruptcy is typically to place a value on a company’s patent rights. This specialized and detailed topic is beyond the scope of this treatise. Competent accounting experts should be consulted for valuations of U.S. patent rights. However, as discussed in Section IV below, evaluations and opinions by patent counsel of a company’s patent rights can greatly assist in the valuation of the patent rights. The valuation of a company’s U.S. patent rights may be heavily influenced by the way a company’s patent rights fall within the patent landscape of a company’s technology. Important issues include whether the patent rights of a debtor company may be practiced free of infringing third party patents, whether they may be infringed by third party activities, and whether they are valid and enforceable. Evaluations and opinions of patent clearance (freedom to operate), infringement, validity, and enforceability are discussed in Section IV below.

IV. Clearance (Freedom to Operate), Infringement, Validity, and Enforceability Evaluations and Opinions of Patents in Bankruptcy Cases The valuation of a debtor company’s U.S. patent rights for reorganization or liquidation typically is heavily influenced by the way the rights fall within the patent landscape of the company’s technology. This includes whether the


rights may be practiced free of infringing third party patents, whether they may be infringed by third party activities, and whether they are valid and enforceable. Evaluations and opinions of patent clearance (freedom to operate), infringement, validity, and enforceability of a company’s patent rights are addressed in detail in Chapters 12 and 18 but also briefly below. (See Chapters 12 and 18 for further details on these topics).

A. Patent Clearance (Freedom to Operate) Evaluations and Opinions As discussed in detail in Chapter 12, patent clearance (freedom to operate)11 evaluations and opinions are performed when evaluating a company’s patent portfolio for purposes of determining the scope in which a company’s patented technology may be practiced free of infringing third party patents. Clearance evaluations and opinions identify important third party patents that may affect (e.g., block) the company’s ability to practice its patented technology. As such, they provide important insight into the patent landscape of the company’s patented technology as it relates to the patent rights of others. Important third party patents are evaluated for issues such as purchase, licensing, or design-around technology. Further, the results can identify third party patents that appear to adversely affect (e.g., block) the company’s ability to practice its patented technology, but that, in fact, may not be infringed by the company’s technology and/or may be invalid or unenforceable. This information is important in determining the value of the debtor company’s patent portfolio. For example, generally the broader the scope in which the debtor company’s patented subject matter may be practiced free from infringement of third party patents, the greater the value of the company’s patent rights. 1. Identification of Potential Purchasers of Patent Rights in Liquidation Patent clearance evaluations and opinions are also of value in bankruptcy in identifying third parties who may be particularly interested in acquiring the debtor company’s patent portfolio in order to expand their patent portfolio in

11. As discussed in Chapter 12, it is preferable to refer to these evaluations and opinions as “clearance” evaluations and opinions rather than “freedom to operate.” This is because welldrafted clearance evaluations and opinions are restricted and limited by expressly defined facts and presumptions. Therefore, they represent clearance of third party patents in expressly defined circumstances. Use of the term freedom to operate may communicate a broader evaluation and opinion, perhaps even conveying that the evaluation and opinion assures complete freedom to operate against all third party patents (which, in fact, can never be the case).

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the patent landscape. For example, when a third party is identified in a patent clearance evaluation or opinion as having potentially blocking patents to the practice of the debtor company’s patented technology, that company may be particularly interested in acquiring the debtor company’s patent portfolio to expand its patent portfolio in the common subject matter. Moreover, when third parties are identified in clearance evaluations or opinions as having patents that may affect a debtor company’s ability to practice its patented technology, it is also likely that one or more of the debtor company’s patents may be determined in infringement evaluations and opinions (discussed below) to block the third parties from practicing their patented technologies. In such cases, third parties blocked by patents owned by the debtor company may be especially eager to purchase the company’s patents to remove blocking patents from their technology. Still further, when multiple third parties are identified as being potentially interested in purchasing a debtor company’s patent rights, these parties may engage in competitive bidding that may increase the liquidation value of the debtor company’s patent rights.

B. Patent Infringement Evaluations and Opinions As discussed in detail in Chapter 18, patent infringement evaluations and opinions conducted for a company’s patents are another tool in valuing a company’s patent portfolio by determining where the company’s patents fit within the competitive patent landscape of their subject matter. Those conducting these evaluations and opinions search for and evaluate third party technologies and patents that, when practiced, may infringe patents owned by the debtor company. 1. Infringement of Potential Purchasers of Patent Rights in Liquidation Infringement evaluations and opinions are of particular importance in evaluating a debtor company’s patent portfolio because they may identify specific companies and technologies that may be especially interested in purchasing the debtor company’s patent rights in liquidation. These companies may for example desire to purchase debtor patent rights to remove potentially blocking patents to the practice of their technology and to expand their patent portfolio’s size and strength within the relevant patent landscape. Further, a thorough patent infringement evaluation and opinion (as discussed in Chapter 18) may map the patent landscape to the extent that more than one competing third party company is identified as being potentially blocked by the debtor company’s patents. In such a case, a bidding competition between two or more competing companies seeking to obtain the exclusive blocking


rights of the patents of the debtor company may increase the value of the company’s patent assets in liquidation.

C. Evaluations and Opinions of Patent Validity As discussed in detail in Chapter 18, evaluations and opinions of the validity of a company’s patents may affect the value of the patents, either positively (if it appears the patents are valid), or negatively (if it appears there may be invalidity issues with the patents). Therefore, such evaluations and opinions performed on a debtor company’s patent portfolio may assist in the valuation of the company’s patent assets. Of course, patents that are apparently free from invalidity issues should have a greater value in liquidation than patents having potential issues with validity.

D. Evaluations and Opinions of Patent Enforceability As discussed in detail in Chapter 18, evaluations and opinions of the enforceability of a debtor company’s patents may affect their value in liquidation. Patents that are apparently free of issues of enforceability should have greater value in liquidation than those having potential issues with enforceability. In addition (as discussed in detail in Chapter 19), under certain limited circumstances enforceability issues may be “cured.”12 Therefore, evaluations and opinions of enforceability may alert patent attorneys assisting in a bankruptcy of the potential to “cure” enforceability issues prior to liquidation of patent rights. Of course, curing unenforceability issues in a debtor company’s patent portfolio prior to liquidation should enhance the value of the company’s patent rights in liquidation. Further, even where time constraints do not allow curing of patent unenforceability issues prior to liquidation, noting the potential to cure enforceability issues to potential buyers of a debtor company’s patent rights might increase the value of these rights.

12. See Chapters 10 and 18; Rohm & Haas Co. v. Crystal Chemical Co., 722 F.2d 1556, 1571–72 (Fed. Cir. 1983) (in certain limited circumstances it may be possible to “cure” inequitable conduct during prosecution of the same application in which the inequitable conduct occurred); B. Braun Med., Inc., v. Abbott Labs., 124 F.3d 1419, 1427 (Fed. Cir. 1997) (patents are “unenforceable until the misuse is purged.”); C.R. Bard. Inc. v. M3 Sys., Inc. 157 F.3d 1340, 1372 (Fed. Cir. 1998) (“Patent misuse arises in equity, and a holding of misuse renders the patent unenforceable until the misuse is purged; it does not, of itself, invalidate the patent.”); Qualcomm Inc. v. Broadcom Corp., 548 F.3d 1004, 1025 (Fed. Cir. 2008) (“[P]atent misuse does not render a patent unenforceable for all time.”).


E. Evaluations and Opinions of Patent Ownership As discussed in Section III above (and in more detail in Chapter 18), the ownership of a company’s patents is extremely important in determining the value of its patents. Where there is a co-inventor on a U.S. patent who is not under an obligation to assign his or her patent rights to a company that otherwise owns all other rights in the patent, the commercial value of the patent is virtually eliminated. Unless the debtor company can obtain the unassigned rights, the non-assigning co-inventor has full, undivided rights to the patent and can freely assign or license the patent to any party. The non-assigning co-inventor can even dedicate the patent to the public to be used free of charge. Therefore, it is important that a debtor company’s patent portfolio be carefully evaluated for any issues concerning potential co-inventors not obligated to assign their patent rights to the debtor company. If any such issues are noted, it may be of value to the debtor company to attempt to obtain the nonassigned co-inventor’s rights prior to liquidating the patent(s). 1. Identification of Potential Purchasers of Patent Rights in Liquidation If a debtor company’s patent is identified as having a co-owner who is not obligated to assign his or her rights in the patent to the debtor company, that company may attempt to sell its rights in the patent to the non-assigning coowner. In fact, the non-assigning co-owner faces the same problems that the debtor company faces with the commercial value of the patent being virtually eliminated due to split ownership. Therefore, the non-assigning co-owner might be interested in purchasing the debtor company’s ownership rights in the patent so that the non-assigning co-owner can obtain full ownership of the patent, and thus, full control of it. Additionally, if the patent is a blocking patent to other companies in a competitive patent landscape, it may also be that competitors of the non-assigning owner of the patent may desire to purchase the debtor company’s co-ownership in the patent so that no company can enforce the patent against them. Indeed, in such a case, a bidding war may even emerge among competitors and the co-owner for the debtor company’s co-ownership rights. The above example of competing companies bidding to purchase a co-owned patent provides a good illustration of the importance of a debtor company conducting patent evaluations and opinions on its patent portfolio and creating a patent landscape. Doing so should help identify companies in the patent landscape that may be especially interested in purchasing the debtor company’s patent rights—and this should increase the value of these rights.

Special Patent Issues in Bankruptcy I

V. Special Patent Issues in Bankruptcy I: Assuming or Rejecting Patent Licenses Patent licenses are typically, but not always, considered executory contracts under U.S. bankruptcy law.13 Under U.S. bankruptcy law, contracts are generally considered to be executory “when the obligations of ‘both the bankrupt and the other party to the contract are so far unperformed that failure of either to complete the performance would constitute a material breach excusing the performance of the other.’”14 Patent licenses are typically considered executory contracts because they usually involve, at a minimum, ongoing obligations on the part of the licensor to refrain from suing the licensee and on the part of the licensee to pay royalties.15 Section 365 of Title 11 of the U.S. Bankruptcy Code allows (subject to court approval) a debtor in possession or a trustee (hereinafter both referred to as “debtor”) to assume or reject executory contracts in order to maximize the profitability and value of the debtor’s estate.16 If a debtor assumes an executory contract, it must cure existing defaults or provide adequate assurance that it will do so promptly.17 Further, the assuming debtor must agree to be bound by the terms of the contract as if there had been no bankruptcy filing.18 If the debtor rejects an executory contract, the contract is treated as if it had been breached by the debtor on the date the bankruptcy petition was filed.19 In such a case, the debtor is relieved of further affirmative obligations under the contract while the other party receives a general unsecured claim against the debtor’s estate for the damages stemming from the breach.20 Generally, a court’s decision to allow a debtor to assume or reject an executory contract is governed by the business judgment rule, under which the court weighs the burden imposed on the estate by continued performance under

13. E.g., Perlman v. Catapult Entertainment (In re Catapult Entertainment), 165 F.3d 747, 750 (9th Cir. 1999); Institut Pasteur v. Cambridge Biotech Corp., 104 F.3d 489, 493 (1st Cir. 1997). 14. In re Golden Books Family Entm’t, 269 B.R. 300, 308 (Bankr. D. Del. 2001) (quoting Vernon Countryman, Executory Contracts in Bankruptcy; Part I, 57 Minn. L. Rev. 439, 460 (1973)). 15. E.g., Catapult Entertainment, 165 F.3d at 750; Institut Pasteur, 104 F.3d at 493. 16. 11 U.S.C.S. § 365 (2009). 17. E.g., Kimmelman v. Port Authority of New York and New Jersey (In re Kiwi Int’l Airlines, Inc.), 344 F.3d 311, 318 (3d Cir. 2003). 18. Id. 19. 11 U.S.C.S. § 365(g)(1) (2009). 20. E.g., Abboud v. Ground Round, Inc. (In re Ground Round, Inc.), 335 B.R. 253, 261 (B.A.P. 1st Cir. 2005).

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the contract (in the case of assumption) or the damage claim asserted against the estate (in the case of rejection).21 However, not all patent licenses are executory. As noted by the U.S. Supreme Court in 1891, exclusive licenses may, in fact, be full or partial assignments rather than licenses: Whether a transfer of a particular right or interest under a patent is an assignment or a license does not depend upon the name by which it calls itself, but upon the legal effect of its provisions. For instance, a grant of an exclusive right to make, use and vend two patented machines within a certain district, is an assignment, and gives the grantee the right to sue in his own name for an infringement within the district, because the right, although limited to making, using and vending two machines, excludes all other persons, even the patentee, from making, using or vending like machines within the district. On the other hand, the grant of an exclusive right under the patent within a certain district, which does not include the right to make, and the right to use, and the right to sell, is not a grant of a title in the whole patent right within the district, and is therefore only a license. Such, for instance, is a grant of “the full and exclusive right to make and vend” within a certain district, reserving to the grantor the right to make within the district, to be sold outside of it. So is a grant of “the exclusive right to make and use,” but not to sell, patented machines within a certain district. Mitchell v. Hawley, 16 Wall. 544. So is an instrument granting “the sole right and privilege of manufacturing and selling” patented articles, and not expressly authorizing their use, because, though this might carry by implication the right to use articles made under the patent by the licensee, it certainly would not authorize him to use such articles made by others.22

When a purported patent license is, in fact, an assignment, the Bankruptcy Code’s provisions for executory contracts should not apply.23 When a purported patent license is a sale, the agreement should be treated under U.S. bankruptcy laws relating to sales rather than to licenses.24

21. E.g., In re Chi-Feng Huang, 23 B.R. 798, 800–2 (B.A.P. 9th Cir. 1982). 22. Waterman v. Mackenzie, 138 U.S. 252, 256 (U.S. 1891); Moldo v. Matsco, Inc. (In re Cybernetic Servs.), 252 F.3d 1039, 1052 (9th Cir. 2001); Microsoft Corp. v. DAK Indus. (In re DAK Indus.), 66 F.3d 1091, 1096 (9th Cir. 1995) (holding that a nonexclusive “license” was not an executory contract). 23. See, e.g., DAK Indus., 66 F.3d at 1095 (relating to a purported copyright license, but likely applicable to purported patent licenses). 24. Id.


A. Debtor as Licensee 1. Assignment of Nonexclusive25 Patent License by Debtor Licensee A debtor licensee may not assign a nonexclusive26 patent license without the consent of the licensor.27 The leading case on this issue is the Ninth Circuit’s In re CFLC decision.28 In CFLC, the debtor was a nonexclusive patent licensee.29 The court first determined that the nonexclusive license was an executory contract under U.S. bankruptcy law because it was a contract “‘on which performance is due to some extent on both sides’ and in which ‘the obligations of both parties are so far unperformed that the failure of either party to complete performance would constitute a material breach and thus excuse the performance of the other.’ ”30 Next, the court noted that Section 365(c)(1) of Title 11 of the U.S. Bankruptcy Code prohibits debtor assignment of executory contracts without consent of the nondebtor party where “ ‘applicable’ law excuses [the licensor] from accepting performance from, or rendering performance to, anyone other than [the licensee].”31 Finally, the court determined that a debtor licensee can not assign a nonexclusive patent license without the consent of the licensor because the “applicable federal law” is federal patent law, which “holds a nonexclusive patent license to be personal and nonassignable and therefore would excuse [a patent licensor] from accepting performance from, or rendering it to, anyone other than [the debtor licensee].”32 As stated by the court: “It is well settled that a non-exclusive licensee of a patent has only a personal and not a property interest in the patent and that this personal right cannot be assigned unless the patent owner authorizes the assignment or the license itself permits assignment.” Gilson v. Republic of Ireland, 787 F.2d 655, 658 (D.C. Cir. 1986) (Friedman, J.). See also Stenograph Corp. v. Fulkerson, 972 F.2d 726, 729 n.2 (7th Cir. 1992) (“Patent licenses are not assignable in the absence of express

25. In the context of Section V of Chapter 22, the term nonexclusive patent license means a patent license agreement that “did not convey to the Debtors the exclusive right or some part of the exclusive right to practice the invention and did not grant any right to exclude others from practicing the patents. Thus, the License Agreement did not convey any part of the patent monopoly or the underlying patents. We conclude, therefore, that it was not a sale but a license which was executory at the time of the filing of the bankruptcy cases.” In re Access Beyond Techs., Inc., 237 B.R. 32, 44–45 (Bankr. D. Del. 1999) (emphasis in original). 26. Id. 27. E.g., Everex Sys. v. Cadtrak Corp. (In re CFLC, Inc.), 89 F.3d 673, 679–80 (9th Cir. 1996). 28. Id. 29. Id. at 674. 30. Id. at 677 (quoting Griffel v. Murphy (In re Wegner), 839 F.2d 533, 536 (9th Cir. 1988)). 31. Id. 32. Id. at 679.

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804 Chapter 22 Evaluating and Opining on One’s Own Patent Rights language.”); PPG Industries, 597 F.2d at 1093 (“It has long been held by federal courts that agreements granting patent licenses are personal and not assignable unless expressly made so.”); Unarco, 465 F.2d at 1306 (“The long standing federal rule of law with respect to the assignability of patent license agreements provides that these agreements are personal to the licensee and not assignable unless expressly made so in the agreement.”); Rock-Ola Manufacturing Corp. v. Filben Manufacturing Co., 168 F.2d 919, 922 (8th Cir.), cert. dismissed, 335 U.S. 855, 69 S. Ct. 134, 93 L. Ed. 403 (1948); E.I. du Pont de Nemours & Co. v. Shell Oil Co., 498 A.2d 1108, 1114 (Del. 1985) (rights conveyed by nonexclusive patent license are personal to licensee and not susceptible to sublicensing unless specific permission given).33

2. Assumption of Nonexclusive Patent License by Debtor Licensee Not only may a debtor licensee not assign a nonexclusive patent license, but there is a split of authority among U.S. Circuit Courts as to whether a debtor licensee (i.e., a Chapter 7 or Chapter 11 trustee or a Chapter 11 debtor in possession) may even assume such a license without consent from the licensor. Under the hypothetical test, if a debtor licensee cannot assign an executory contract without consent of the licensor, the debtor cannot assume the contract either.34 Alternatively, under the actual test, courts look to the facts of each case to determine whether a debtor licensee can assume the license without the consent of the licensor.35 Under the actual test, a debtor licensee is prohibited from assuming a patent license only where circumstances indicate that the debtor licensee actually intends to assign the contract to a third party from whom the licensor would be excused by federal patent law from accepting performance.36 This split among the circuit courts, and the desirability of settling the issue, has been noted but not resolved by the U.S. Supreme Court. In 2009, in N. C. P. Mktg. Group, Inc. v. BG Star Prods.,37 the Supreme Court declined to hear a case that would have brought this circuit court split before the justices. Prior to concluding “[t]his . . . is not the most suitable case for our resolution of the conflict,” Justice Kennedy described the circuit split, including his concern that “the hypothetical test may prevent debtors-in-possession from continuing to exercise their rights under nonassignable contracts, such as

33. Id. 34. E.g., Perlman v. Catapult Entertainment (In re Catapult Entertainment), 165 F.3d 747, 750 (9th Cir. 1999). 35. E.g., Institut Pasteur v. Cambridge Biotech Corp., 104 F.3d 489, 493–94 (1st Cir. 1997). 36. Id. 37. N. C. P. Mktg. Group, Inc. v. BG Star Prods., 129 S. Ct. 1577, 1577–78 (2009) (Statement of Justice Kennedy, with whom Justice Breyer joins, respecting the denial of certiorari).


patent and copyright licenses,” and the desirability of resolving the issue as follows: The object of Chapter 11 of the Bankruptcy Code is to empower a debtor with going concern value to reorganize its operations to become solvent once more. In a typical case, the debtor takes on the role of “debtor in possession,” 11 U.S.C. § 1101(1), allowing it to retain possession and control of its business. A debtorin-possession operates its business and performs many functions that would fall to the trustee under other chapters of the Bankruptcy Code. § 1107(a). At issue in this petition is the power of a debtor-in-possession to assume executory contracts held by the debtor before bankruptcy. § 365(a). Section 365 gives the debtor-in-possession the power to assume—that is, to continue to receive the benefits of, while also continuing to perform its obligations under—the debtor’s leases, ongoing performance contracts, and licenses to use the property of others. This power is withdrawn, however, if applicable law excuses a party, other than the debtor, to [an executory contract] from accepting performance from or rendering performance to an entity other than the debtor or the debtor in possession, whether or not such contract or lease prohibits or restricts assignment of rights or delegation of duties; and . . . such party does not consent to such assumption or assignment . . . §§ 365(c)(1)(A)–(B). According to the Court of Appeals for the Ninth Circuit, this language means that a debtor-in-possession may assume an executory contract only if hypothetically it might assign that contract to a third party. That is to say, if the debtor-in-possession lacks hypothetical authority to assign a contract, then it may not assume it—even if the debtor-in-possession has no actual intention of assigning the contract to another. In re Catapult Entertainment, Inc., 165 F.3d 747 (CA9 1999). The so-called hypothetical test is preferred by a majority of the other Courts of Appeals that have addressed this question. See In re Sunterra Corp., 361 F.3d 257 (CA4 2004); In re James Cable Partners, L. P., 27 F.3d 534 (CA11 1994) (per curiam); In re West Electronics, Inc., 852 F.2d 79 (CA3 1988). The hypothetical test is not, however, without its detractors. One arguable criticism of the hypothetical approach is that it purchases fidelity to the Bankruptcy Code’s text by sacrificing sound bankruptcy policy. For one thing, the hypothetical test may prevent debtors-in-possession from continuing to exercise their rights under nonassignable contracts, such as patent and copyright licenses. Without these contracts, some debtors-in-possession may be unable to effect the successful reorganization that Chapter 11 was designed to promote. For another thing, the hypothetical test provides a windfall to nondebtor parties to valuable executory contracts: If the debtor is outside of bankruptcy, then the nondebtor does not have the option to renege on its agreement; but if the debtor

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806 Chapter 22 Evaluating and Opining on One’s Own Patent Rights seeks bankruptcy protection, then the nondebtor obtains the power to reclaim— and resell at the prevailing, potentially higher market rate—the rights it sold to the debtor. To prevent § 365(c) from engendering unwise policy, one Court of Appeals, and a number of Bankruptcy Courts, reject the hypothetical test in favor of an actual test, under which a Chapter 11 debtor-in-possession may assume an executory contract provided it has no actual intent to assign the contract to a third party. See Institut Pasteur v. Cambridge Biotech Corp., 104 F.3d 489, 493 (CA1 1997) (applying the actual test); In re Catapult, 165 F.3d at 749, n. 2 (collecting Bankruptcy Court decisions favoring the actual test). Of course, the actual test may present problems of its own. It may be argued, for instance, that the actual test aligns § 365(c) with sound bankruptcy policy only at the cost of departing from at least one interpretation of the plain text of the law. See id., at 751–55, at 751–55. The division in the courts over the meaning of § 365(c)(1) is an important one to resolve for Bankruptcy Courts and for businesses that seek reorganization. This petition for certiorari, however, is not the most suitable case for our resolution of the conflict. Addressing the issue here might first require us to resolve issues that may turn on the correct interpretation of antecedent questions under state law and trademark-protection principles. For those and other reasons, I reluctantly agree with the Court’s decision to deny certiorari. In a different case the Court should consider granting certiorari on this significant question.38

a) The “Hypothetical Test” for Assumption of Nonexclusive Patent License by Debtor Licensee In In re Catapult Entertainment, the Ninth Circuit explained the hypothetical test as follows: In other words, the statute by its terms bars a debtor in possession from assuming an executory contract without the nondebtor’s consent where applicable law precludes assignment of the contract to a third party. The literal language of § 365(c)(1) is thus said to establish a hypothetical test: a debtor in possession may not assume an executory contract over the nondebtor’s objection if applicable law would bar assignment to a hypothetical third party, even where the debtor in possession has no intention of assigning the contract in question to any such third party. . . . Since federal patent law makes nonexclusive patent licenses personal and nondelegable, § 365(c)(1)(A) is satisfied. [The licensor] has withheld his

38. Id. (emphasis added).

Special Patent Issues in Bankruptcy I consent, thus satisfying § 365(c)(1)(B). Accordingly, the plain language of § 365(c)(1) bars [the debtor licensee] from assuming the [patent] licenses.39

b) The “Actual Test” for Assumption of Nonexclusive Patent License by Debtor Licensee In Institut Pasteur, the First Circuit explained the actual test as follows: We rejected the proposed hypothetical test . . . holding instead that subsections 365(c) and (e) contemplate a case-by-case inquiry into whether the nondebtor party (viz., Pasteur) actually was being “forced to accept performance under its executory contract from someone other than the debtor party with whom it originally contracted.” Where the particular transaction envisions that the debtor-in-possession would assume and continue to perform under an executory contract, the bankruptcy court cannot simply presume as a matter of law that the debtor-in-possession is a legal entity materially distinct from the prepetition debtor with whom the nondebtor party (viz., Pasteur) contracted. Rather, “sensitive to the rights of the nondebtor party (viz., Pasteur),” the bankruptcy court must focus on the performance actually to be rendered by the debtor-inpossession with a view to ensuring that the nondebtor party (viz., Pasteur) will receive “the full benefit of [its] bargain.” Given the pragmatic “actual performance” test . . . the ultimate findings of fact and conclusions of law made by the bankruptcy court below did not constitute error. [The debtor licensee] simply does not occupy the same position as the debtor in CFLC, Inc., 89 F.3d 673 (9th Cir. 1996), upon which Pasteur relies most heavily. The Plan in CFLC, Inc. unmistakably provided for an outright assignment of the debtor’s patent license to an entirely different corporation with which the patent holder Cadtrak Corporation had never contracted. Id. at 679–80. By contrast, CBC all along has conducted, and proposes to continue, its retroviral diagnostic enterprise as the same corporate entity which functioned prepetition, while utilizing Pasteur’s HIV2 procedures in that same prepetition endeavor.40

c) The “Footstar Approach” for Assumption of Nonexclusive Patent License by Debtor Licensee In addition to the hypothetical and actual tests, Judge Hardin of the United States Bankruptcy Court for the Southern District of New York, fashioned a third means of construing Section 365(c)(1) for determining

39. Catapult Entm’t, 165 F.3d at 750–51. 40. Institut Pasteur, 104 F.3d at 493–94 (some citations omitted, footnote omitted).

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whether a debtor in a personal services executory contract may assume an executory contract without consent from the non-debtor.41 While Footstar did not involve a patent license, the reasoning of the case has since been applied to a patent license as an executory contract with the debtor as the licensee.42 The Footstar approach applies a literal construction to the terms “trustee” and “debtor in possession” in Section 365(c)(1) to conclude that the section only prevents a “trustee” from assuming but not assigning an executory contract where applicable law excuses the non-debtor from accepting performance from or rendering performance to an entity other than the “debtor or debtor in possession.”43 Thus, under Footstar, Section 365(c)(1) cannot prevent a “debtor or debtor in possession” from assuming but not assigning an executory contract where applicable law excuses the non-debtor from accepting performance from or rendering performance to an entity other than the “debtor or debtor in possession.”44 More specifically, Footstar is based on an interpretation of Section 365(c)(1), which reads in pertinent part as follows: (c) The trustee may not assume or assign any executory contract . . . if– (1) (A) applicable law excuses a party, other than the debtor, to such contract . . . from accepting performance from or rendering performance to an entity other than the debtor or the debtor in possession . . .; and (B) such party does not consent to such assumption or assignment. . . .45

The Footstar decision reasons that: Section 365(c)(1) states that “the trustee may not assume or assign . . .” (emphasis supplied). The key word is “trustee.” The statute does not say that the debtor or debtor in possession may not assume or assign—the prohibition applies on its face to the “trustee.” In [the] case [where] there is [a debtor in possession, but there is] no trustee . . . it is the debtors who seek to assume the Agreements. Nothing in the Bankruptcy Code prohibits the debtors from assuming the Agreements. To construe “trustee” in Section 365(c)(1) to mean “debtors” or “debtors in possession” would defy the “plain meaning” of the statute as written by Congress. . . .46

41. In re Footstar, Inc., 323 B.R. 566 (Bankr. S.D.N.Y. 2005). 42. In re Aerobox Composite Structures, 373 B.R. 135, 141–142 (Bankr. D.N.M. 2007) (adopting the reasoning of Footstar and applying it to a patent license as an executory contract). 43. Footstar, 323 B.R. at 569. 44. Id. 45. 11 U.S.C.S. § 365(c)(1) (2009) (emphasis added). 46. Footstar, 323 B.R. at 570 (emphasis in original).


Therefore, the Footstar court concludes, “Section 365(c)(1) is not applicable to a debtor in possession which seeks to assume, but not assign, its nonassignable contract. . . .”47 A point of contention in the Footstar approach, however, is that under the U.S. Bankruptcy Code, the term “trustee” generally includes a “debtor in possession.”48 However, the Footstar decision directly addresses this issue and concludes that Section 1107(a) is a “prefatory clause” that does not apply under the unique circumstances of Section 365(c)(1).49 d) The “Actual Test” Gives the Patent Licensee Debtor Greater Control in Assuming Patent Licenses Patent licensee debtors have more control over assuming patent licenses under the actual test than they do under the hypothetical test. Accordingly, nondebtor patent licensors have more control over patent licensee debtors’ assumption of licenses under the hypothetical test than they do under the actual test. Therefore, as discussed in Section V[A][2][e] below, whether a forum follows the actual test or the hypothetical test may be a factor for patent licensee debtors to consider in choosing a venue in which to file a petition for reorganization or liquidation. The actual test gives patent licensee debtors greater control over assuming executory contracts (such as patent licenses) because under certain circumstances, the licensee can assume the license without—and even against—the will of the patent licensor. Specifically, a debtor patent licensee can accept an executory patent license without the consent of the patent licensor where: (a) the particular facts of the case show that the debtor does not intend to assign the license to a third party from whom the licensor would be excused by federal patent law from accepting performance (e.g., where the debtor in possession is the same entity as the original licensee, and the debtor in possession does not intend to assign the license); and (b) where the bankruptcy court approves the assumption under the business judgment rule. On the other hand, under the hypothetical test, a patent licensee debtor cannot assume an executory patent license without the consent of the licensor regardless of the circumstances. Thus, even in a situation where the debtor in possession seeking to assume the license is the same entity as the original licensee and the debtor in possession does not intend to assign the license, even with court approval under the hypothetical test the debtor cannot assume the license without the consent of the patent licensor.

47. Id. at 569 (emphasis in original). 48. E.g., 11 U.S.C.S. § 1107(a) (2009). 49. Footstar, 323 B.R. at 576–78.

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e) Forums Following the “Hypothetical Test” or the “Actual Test” for Assumption of Nonexclusive Patent Licenses by Debtor Licensees Because the actual test is more favorable to patent licensee debtors than the hypothetical test, debtors having significant in-licensed patent rights may want to consider whether a forum follows the actual test or the hypothetical test in choosing a venue in which to file a petition for reorganization or liquidation. The Third,50 Fourth,51 Ninth,52 and Eleventh Circuits53 follow the hypothetical test for assumption of executory contracts.54 The First55 and Fifth Circuits56 follow the actual test.57 Therefore, debtors having patent licenses that they wish to maintain in a bankruptcy case may choose, if possible, to file in the bankruptcy courts of the First and Fifth Circuits, and avoid filing in the courts of the Third, Fourth, Ninth, and Eleventh Circuits.

B. Debtor as Licensor: The Intellectual Property Bankruptcy Act of 1988 (11 U.S.C. § 365(n)) The Intellectual Property Bankruptcy Act Of 1988 (11 U.S.C. § 365(n)) (“Section 365(n)”)58 was enacted to protect U.S. patent licensees59 from losing

50. Cinicola v. Scharffenberger, 248 F.3d 110, 121 (3d Cir. 2001); In re West Electronics, Inc., 852 F.2d 79, 83 (3d Cir. 1988). 51. RCI Tech. Corp. v. Sunterra Corp. (In re Sunterra Corp.), 361 F.3d 257, 271 (4th Cir. 2004); In re Catron, 158 B.R. 629, 638 (E.D. Va. 1993) (appearing to adopt the hypothetical test), aff ’d without opinion, 25 F.3d 1038 (4th Cir. 1994). 52. Perlman v. Catapult Entertainment (In re Catapult Entertainment), 165 F.3d 747, 750 (9th Cir. 1999). 53. City of Jamestown v. James Cable Partners, L.P. (In re James Cable Partners), 27 F.3d 534, 537 (11th Cir. 1994), rehearing en banc denied, 38 F.3d 575 (11th Cir. 1994) (describing Section 365 as presenting a “hypothetical question,” and appearing to adopt the hypothetical test). 54. Not all of these cases involve patent licenses as the executory contracts. However, the holdings of these cases should apply to patent licenses since, as discussed above, patent licenses are generally considered to be executory contracts under Section 365 of the U.S. Bankruptcy Code. 55. Institut Pasteur v. Cambridge Biotech Corp., 104 F.3d 489, 493 (1st Cir. 1997); Summit Inv. & Dev. Corp. v. Leroux, 69 F.3d 608 (1st Cir. 1995). 56. Bonneville Power Admin. v. Mirant Corp. (In re Mirant Corp.), 440 F.3d 238, 249–50 (5th Cir. 2006). 57. Bankruptcy courts have reported that prior to circuit courts adopting the hypothetical test, the actual test was applied by “a clear majority of the lower courts.” United States v. Techdyn Sys. Corp. (In re Techdyn Sys. Corp.), 235 B.R. 857, 860–61 (Bankr. E.D. Va. 1999); In re Neuhoff Farms, Inc., 258 B.R. 343, 350 (Bankr. E.D.N.C. 2000). 58. Pub. L. No. 100-506, 102 Stat. 2538 (1988) (codified at 11 U.S.C.S. § 365(n) (2009)). 59. Section 365(n) applies to licenses of certain types of intellectual property, including U.S. patents. In keeping with the subject matter of this treatise, this chapter discusses Section 365(n) solely in the context of licenses of U.S. patents.


valuable patent license rights when a patent licensor files for reorganization or liquidation and rejects a patent license as an executory contract under Section 365. As discussed below, without Section 365(n), a patent licensor in a bankruptcy case could treat a patent license like any other executory contract and, subject to a bankruptcy court’s approval under the business judgment rule, could assume or reject the license. If the debtor licensor rejected the license, the licensee would only be entitled to damages for breach in the form of a general unsecured claim. Thus, if a patent license was rejected by a licensor debtor, the licensee would lose valuable patent rights under the license (such as rights for continued use of the licensed technology and any exclusivity provisions). Hence, without Section 365(n), patent licensees were at risk of losing their patent licenses whenever a patent licensor filed for reorganization or liquidation. 1. Lubrizol: Pre-Section 365(n) Licensor Debtor Rejection of Patent License Section 365(n) was created in response to Lubrizol, a case in which a court allowed a patent licensor debtor to reject a patent license under Section 365, leaving the patent licensee without any license rights except damages for breach.60 More specifically, in Lubrizol, the Fourth Circuit in applying the business judgment rule permitted a debtor patent licensor to reject a patent license as an executory contract.61 Doing so caused a patent licensee to lose its rights under the license, including provisions for the continued use of the licensed technology.62 The only legal option available to the licensee after the licensor’s rejection of the patent license was to “treat [the] rejection as a breach and seek a money damages remedy; however, it could not seek to retain its contract rights in the technology by specific performance even if that remedy would ordinarily be available upon breach of this type of contract.”63 The court indicated: Even though § 365(g) treats rejection as a breach, the legislative history of § 365(g) makes clear that the purpose of the provision is to provide only a damages remedy for the non-bankrupt party. For the same reason, Lubrizol cannot rely on provisions within its agreement with [the debtor licensor] for continued use of the technology by Lubrizol upon breach by [the debtor licensor]. Here again, the statutory “breach” contemplated by § 365(g) controls, and provides only a money damages remedy for the non-bankrupt party. Allowing specific performance would obviously undercut the core purpose of

60. 61. 62. 63.

Lubrizol Enterprises, Inc. v. Richmond Metal Finishers, Inc., 756 F.2d 1043 (4th Cir. 1985). Id. at 1048. Id. Id.

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812 Chapter 22 Evaluating and Opining on One’s Own Patent Rights rejection under § 365(a), and that consequence cannot therefore be read into congressional intent.64

2. In Response to Lubrizol: The Intellectual Property Bankruptcy Act of 1988 (11 U.S.C. § 365(n)) The Lubrizol case caused great concern among technology companies because it threatened to undercut the reliability and value of patent licenses. For example, it eliminated the ability of a company to rely on a patent license to practice a key technology if the licensor filed for reorganization or liquidation and chose to reject the license. In response, Congress enacted the Intellectual Property Bankruptcy Act of 1988 (11 U.S.C. § 365(n)) (“Section 365(n)”).65 Section 365(n) of the U.S. Bankruptcy Code was enacted “to make clear that the rights of an intellectual property licensee to use the licensed property cannot be unilaterally cut off as a result of the rejection of the license pursuant to Section 365 in the event of the licensor’s bankruptcy.”66 Generally, Section 365(n) applies only when a debtor patent67 licensor rejects a patent license under Section 365. In such instances, Section 365(n) provides a nondebtor patent licensee the option of treating the license as terminated due to the licensor’s rejection, or of retaining certain of its rights under the license, including any exclusivity rights. 3. Procedural Aspects of Section 365(n) When a patent licensor files for reorganization or liquidation, a nondebtor patent licensee may request, in writing, that unless and until the debtor licensor rejects the patent license, the licensor: (i) perform such contract; or (ii) provide to the licensee such intellectual property (including any embodiment of such intellectual property to the extent protected by applicable nonbankruptcy law) held by the trustee; and (B) not interfere with the rights of the licensee as provided in such contract, or any agreement supplementary to such contract, to such intellectual property (including such embodiment), including any right to obtain such intellectual property (or such embodiment) from another entity. 68

64. 65. 66. 67.

Id. (citations omitted). Pub. L. No. 100-506, 102 Stat. 2538 (1988) (codified at 11 U.S.C.S. § 365(n) (2009)). S. Rep. No. 505, 100th Cong., 2d Sess. 1 (1988). Section 365(n) applies to certain other types of intellectual property in addition to patents. However, in keeping with the subject matter of this treatise, this section discusses the effect of Section 365(n) only on licenses of U.S. patents. 68. 11 U.S.C.S. § 365(n)(4) (2009).


If a patent licensor debtor rejects a patent license as an executory contract under Section 365: [T]he licensee under such contract may elect— (A) to treat such contract as terminated by such rejection if such rejection by the trustee amounts to such a breach as would entitle the licensee to treat such contract as terminated by virtue of its own terms, applicable nonbankruptcy law, or an agreement made by the licensee with another entity; or (B) to retain its rights (including a right to [to] enforce any exclusivity provision of such contract, but excluding any other right under applicable nonbankruptcy law to specific performance of such contract) under such contract and under any agreement supplementary to such contract, to such intellectual property (including any embodiment of such intellectual property to the extent protected by applicable nonbankruptcy law), as such rights existed immediately before the case commenced, for— (i) the duration of such contract; and (ii) any period for which such contract may be extended by the licensee as of right under applicable nonbankruptcy law.69

Therefore, if a patent licensor debtor rejects a patent license under Section 365 as an executory contract, the licensee has a choice of treating the rejection as a breach of the license, in which case the rejection is treated like the rejection of any executory contract, or the licensee may elect to retain the license under the provisions of Section 365(n). However, at least one bankruptcy court has held that if a patent licensee elects to retain a patent license rights under Section 365(n), the licensee must do so within a time frame set by the bankruptcy court with failure to do so barring such a claim.70 Further: If the licensee elects to retain its rights . . . under such contract— (A) the trustee shall allow the licensee to exercise such rights; (B) the licensee shall make all royalty payments due under such contract for the duration of such contract and for any period described . . . for which the licensee extends such contract. . . .71

69. 11 U.S.C.S. § 365(n)(1) (2009). 70. Hitachi Global Storage Tech. Netherlands B.V. v. Read-Rite Corp. (In re Read-Rite Corp.), 2007 U.S. Dist. LEXIS 61363, *11–12 (N.D. Cal. 2007). 71. 11 U.S.C.S. § 365(n)(2) (2009).

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Finally: If the licensee elects to retain its rights, . . . then on the written request of the licensee the trustee shall— (A) to the extent provided in such contract, or any agreement supplementary to such contract, provide to the licensee any intellectual property (including such embodiment) held by the trustee; and (B) not interfere with the rights of the licensee as provided in such contract, or any agreement supplementary to such contract, to such intellectual property (including such embodiment) including any right to obtain such intellectual property (or such embodiment) from another entity.72

4. Obligations of Patent Licensor Debtor and Rights of Licensee upon Election by Licensee under Section 365(n) Importantly, the obligations of the patent licensor debtor—and rights of the patent licensee—are strictly limited upon election by the licensee under Section 365(n). Upon this election, the licensee retains the rights to use the licensed patents as set forth in the license, but only as such rights existed immediately before the licensor filed for reorganization or liquidation.73 This includes any rights to enforce any exclusivity provisions of the license.74 Additionally, upon written request of the licensee, to the extent provided for in the license the debtor must provide the licensee with any intellectual property (including embodiments) the debtor holds.75 Further, upon written request of the licensee, to the extent provided for in the license, the debtor shall not interfere with the rights of the license, including any right to obtain intellectual property from other entities.76 Importantly, however, the licensor debtor has no further obligations to the licensee and, accordingly, the licensee has no further rights against the licensor. For example, the debtor licensor is released from specific performance of any obligations not expressly set forth above (i.e., in Sections 365(n)(1)(B), (n)(2)(A), and (n)(3)). Thus, the licensor debtor is released from obligations to the licensee typically found in patent licenses, such as obligations to maintain licensed patents and to enforce and defend the licensed patents. Additionally, and significantly, Section 365(n)(1)(B) expressly limits the rights under licenses elected under Section 365(n) to “such rights [as] existed

72. 73. 74. 75. 76.

11 U.S.C.S. § 365(n)(3) (2009). 11 U.S.C.S. §§ 365(n)(1)(B) and (n)(2)(A) (2009). Id. 11 U.S.C.S. § 365(n)(3)(A) (2009). 11 U.S.C.S. § 365(n)(3)(B) (2009).


immediately before the case commenced. . . .”77 U.S. courts have interpreted this to mean that the licensee is not entitled to any improvements or modifications made after filing the bankruptcy filing.78 This provision can impose significant limitations on a patent licensee who entered into a license that included improvements and modifications of the licensed technology. As explained by one U.S. bankruptcy court: [T]he express words of the statute provide that a licensee may elect to retain its rights under the license as those “rights existed immediately before the case commenced.” Rules of statutory construction require that a court effectuate the plain meaning of a statute where it can be determined without resort to the legislative history. The unambiguous language of § 365(n) limits the scope of the rights retained to those that existed immediately before the petition date. Upon the filing of a bankruptcy petition, the rights of parties become fixed, subject to the rights and remedies incorporated in the Bankruptcy Code. Whatever rights the estate has in property at the commencement of a case continue in bankruptcy—no more and no less.79

Additionally, as indicated by a U.S. district court: In the course of its opinion, the [bankruptcy] court found the trustee had rejected the license agreement, but [the patent licensee] had elected to retain its rights under the license pursuant to 11 U.S.C. § 365(n). Section 365(n)(1)(B) provides that the licensee may retain its rights under the contract as they existed immediately before the case commenced. In other words, by retaining its rights [under Section 365(n), the patent licensee] became “entitled to [continue to] use the underlying intellectual property [but only] in the state that it existed on the day of the bankruptcy filing.” S. Rep. No. 100–505, 100th Cong., 2nd Sess. 1988, 1988 U.S.C.C.A.N. 3200. Thus, the bankruptcy court concluded “[the retaining licensee] is not entitled to any modifications or improvements which came into existence subsequent to [the petition filing date].”80

5. Obligations and Waiver of Patent Licensee, and Rights of Licensor Debtor, Upon Election by Licensee under Section 365(n) Significantly, election by a patent licensee of a rejected patent license under Section 365(n) subjects the licensee to certain waivers and obligations and

77. 11 U.S.C.S. § 365(n)(1)(B) (2009). 78. E.g., In re Storm Tech., Inc., 260 B.R. 152, 157 (Bankr. N.D. Cal. 2001); Szombathy v. Controlled Shredders, 1997 U.S. Dist. LEXIS 5168 (N.D. Ill. Apr. 10, 1997). 79. Storm Tech., 260 B.R. at 157 (citations omitted). 80. Controlled Shredders, 1997 U.S. Dist. LEXIS 5168, at *2–*3 (some citations omitted).

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provides certain rights to the patent licensor debtor. Specifically, upon this election Section 365 provides: [T]he licensee shall make all royalty payments due under such contract for the duration of such contract and for any period . . . for which the licensee extends such contract. . . .81

Further, upon election under Section 365(n): the licensee shall be deemed to waive— (i) any right of setoff it may have with respect to such contract under this title or applicable nonbankruptcy law; and (ii) any claim allowable under section 503(b) of this title [11 U.S.C.S. § 503(b)] arising from the performance of such contract.82

U.S. courts have interpreted this to mean that upon electing a license under Section 365(n), the licensee immediately owes the licensor debtor all past and currently due royalties, with no right of setoff. If the trustee or debtor in possession rejects an executory contract under which the debtor is a licensor of a right to intellectual property, the licensee may elect to retain its rights under the contract. Section 365(n)(1)(B). If the licensee elects to retain its rights under the contract, the licensee must make all royalty payments due under the contract and will be deemed to have waived any right of setoff it may have with respect to such contract and any [administrative] claim under section 503(b) arising from the performance of the contract. Section 365(n)(2)(B)-(C).83

Further, courts have held that “royalties” due to the licensor debtor under Section 365(n)(2)(B) are to be broadly construed: The Bankruptcy Code does not contain a definition of the term “royalty payments.” There is a paucity of authorities construing section 365(n) and none addressing the scope of this term. In non-bankruptcy contexts, while the term royalty is usually employed in a restricted sense to denote periodic payment based upon productivity for use of intangible property, authorities also define the term broadly to mean money or compensation paid for the use of intangible property.

81. 11 U.S.C.S. § 365(n)(2)(B) (2009). 82. 11 U.S.C.S. § 365(n)(2)(C) (2009). 83. Encino Business Management v. Prize Frize, Inc., 150 B.R. 456, 459 (B.A.P. 9th Cir. Cal. 1993) (footnote omitted), aff ’d, 32 F.3d 426, 427 (9th Cir. 1994).

Special Patent Issues in Bankruptcy I Although the statute provides no definition for the term “royalty payment” and nonbankruptcy authorities provide no clear definition of the term, the legislative history of section 365(n)(1) is instructive: It is important that courts, in construing the term “royalty” used in this subsection, and in deciding what payments are royalty payments, look to the substance of the transaction and not the label. The underlying nature of the payments must be considered. For example, payments based upon the use of intellectual property or on a percentage of sales of end products that incorporate or are derived from the intellectual property should be treated as royalty payments. Given this legislative history, we agree with the bankruptcy court that the term “royalty payments” must be defined broadly to include the license fees at issue. The legislative history reflects that this term encompasses any payment for use of intellectual property, no matter how that payment is named in the agreement. Under such a definition, the fact that the payments are called license fees or the fact that the payments are based upon a flat fee rather that a percentage of sales will not preclude their treatment of royalty payments for purposes of section 365(n)(2). If this were not the case, licensees would be allowed to continue to use property of the estate without compensating the estate simply because they labeled the payments license fees or structured the payment on a flat fee rather than a percentage basis. In this case, the license agreement clearly reflects that the license fees are for the use of the intellectual property. Article 4.1 of the agreement states that the license fee is in consideration of the grant of the machine licenses. The grant of the machine license was the grant of the license to utilize the proprietary rights. That there may be additional payments due upon sales, merchandising or franchising that are specifically designated as royalty payments does not mean that the license fee is not payment for use of the debtor’s intellectual property. Encino is arguably correct that the license fee should not be considered a royalty to the extent it is consideration for continuing affirmative obligations of performance on the part of the debtor, such as warranties and indemnification agreements. n9 The agreement, however, reflects that the license fee is in consideration for the use of the intellectual property, not for such continuing affirmative obligations of performance. We, therefore, determine that the bankruptcy court correctly determined that the license fee payments constitute royalty payments for purposes of section 365(n)(2)(B). n9 In discussing the licensee’s obligation to continue making royalty payments, the House Report indicates that the licensee remains bound by the obligations or duties required under the contract “except for those so directly related to obligations or duties that the licensor has been freed from by rejection as to make it inequitable to bind the licensee to them.” H.R. Rept No. 1012 at 7, 100th Cong., 2nd Sess. (1988).84

84. Id. at 459–60.

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Therefore, while Section 365(n) is significant to the nondebtor patent licensee because it allows the licensee to retain its patent licenses when licensors file for bankruptcy reorganization or liquidation, retention of such licenses comes at a cost, and provides only limited rights to the licensee.

VI. Special Patent Issues in Bankruptcy II: Effect of Bankruptcy on Security Interests in U.S. Patents U.S. courts have held that in order to perfect a security interest in a U.S. patent against a subsequent lien creditor it is necessary to take the proper steps under Article 9 of the Uniform Commercial Code (“UCC”) in the appropriate state.85 These cases have also held that it is not necessary to record a security interest with the U.S. Patent and Trademark Office in order to perfect a security interest in a U.S. patent, and doing so will not perfect the interest.86 However, as discussed below, the most prudent course of action for holders of security interests in U.S. patents is to file security interests both under the provisions of the UCC and with the U.S. Patent and Trademark Office. More specifically, Article 9 of the UCC generally relates to the perfection of security interests in U.S. patents, which are “general intangibles” under UCC Article 9.87 As explained by the Ninth Circuit: A “security interest” is an interest in personal property that secures a payment or the performance of an obligation. We refer to a person who holds a security interest in property but who does not hold title to that property as a “lien creditor.” “ ‘Perfection’ and ‘priority’ . . . are separable but intertwined concepts. When a lender has properly perfected a security interest in property by filing its interest in the appropriate office, the lender may obtain priority—the ability to assert that its interest ranks before those of other parties with claims to that property.”88

85. E.g., Moldo v. Matsco, Inc. (In re Cybernetic Servs.), 252 F.3d 1039, 1044 (9th Cir. 2001); City Bank & Trust Co. v. Otto Fabric, Inc., 83 B.R. 780, 784 (D. Kan. 1988); In re Transportation Design & Tech., Inc., 48 B.R. 635, 638 (Bankr. S.D. Cal. 1985); but cf. In re Peregrine Entertainment, Ltd., 116 B.R. 194, 203–7 (C.D. Cal. 1990) (rejecting City Bank and Transportation Design in the context of a security interest in a registered U.S. copyright, and holding that a security interest in a registered U.S. copyright must be filed with the U.S. Copyright Office. Further, failure to do so, even with proper filing of a UCC financing statement, allows the bankruptcy trustee or debtor in possession to trump the security interest under the debtor’s hypothetical judgment lien). 86. Id. 87. See, e.g., Cybernetic Servs., 252 F.3d at 1045; Transportation Design, 48 B.R. at 637–38; City Bank, 83 B.R. at 784. 88. E.g., Cybernetic Servs., 252 F.3d at 1044 n.1 (citations omitted).

Special Patent Issues in Bankruptcy II

The issue of perfecting security interests is important in the context of bankruptcy because under the “strong arm” powers of Section 544(a)(1) of the U.S. Bankruptcy Code, the trustee or debtor in possession can eliminate unperfected security interests.89 Section 544 places a bankruptcy trustee or debtor in possession in the position of a hypothetical judicial lien creditor and bestows upon the bankruptcy debtor all rights and powers that such a creditor has under nonbankruptcy law.90 A lien creditor generally takes priority over unperfected security interests in estate property (including in U.S. patents) because, under Article 9 of the UCC, “an unperfected security interest is subordinate to the rights of. . . . [a] person who becomes a lien creditor before the security interest is perfected.”91 Therefore, bankruptcy trustees and debtors in possession have the power under Section 544(a)(1) to avoid creditors’ unperfected security interests, including in U.S. patents.92 U.S. courts have reached their holdings that security interests in U.S. patents can only be perfected against a subsequent lien creditor by proper filing of UCC financing statements (and not by filing with the U.S. Patent Office) by noting that the UCC applies to perfecting security interests in “general intangibles,” including U.S. patents, unless a specific federal statute provides for a different method of perfecting a security in a specific intangible.93 If there is a specific federal statute for perfecting a security interest in a specific intangible, the federal statute prevails, and the security interest in that specific intangible must be perfected according to the federal statute.94 Section 261 of Title 35 of the U.S. Patent Code provides for the recordation of ownership interests in U.S. patents: Applications for patent, patents, or any interest therein, shall be assignable in law by an instrument in writing. The applicant, patentee, or his assigns or legal representatives may in like manner grant and convey an exclusive right under his application for patent, or patents, to the whole or any specified part of the United States. ... An assignment, grant or conveyance shall be void as against any subsequent purchaser or mortgagee for a valuable consideration, without notice, unless it is

89. 90. 91. 92.

11 U.S.C.S. § 544 (2009). Id. UCC § 9-301(1)(b) (1999). See, e.g., Wind Power Systems, Inc. v. Cannon Financial Group, Inc. (In re Wind Power Systems, Inc.), 841 F.2d 288, 293 (9th Cir. 1988); Angeles Real Estate Co. v. Kerxton (In re Construction General Inc.), 737 F.2d 416, 418 (4th Cir. 1984). 93. UCC 9-104 (1999); In re Transportation Design & Tech., Inc., 48 B.R. 635, 638 (Bankr. S.D. Cal. 1985). 94. Id.

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820 Chapter 22 Evaluating and Opining on One’s Own Patent Rights recorded in the Patent and Trademark Office within three months from its date or prior to the date of such subsequent purchase or mortgage.95

U.S. courts have interpreted Section 261 of the U.S. Patent Code to require only the recordation of “present ownership right[s] in [a] patent” and not of “other lesser rights in a patent,” such as security interests.96 Therefore, courts have held that as federal patent law does not provide a specific statute for perfecting security interests in U.S. patents, federal patent law does not preempt the UCC for perfecting security rights in U.S. patents.97 Thus, courts have held that security interests in U.S. patents can only be perfected under the UCC, and not by filing with the U.S. Patent Office.98 This was explained by the court in Transportation Design as follows: The Supreme Court [has] considered . . . a mortgage equivalent to an assignment of present ownership interest in [a U.S.] patent. . . . Therefore, in order to be effective against subsequent bona fide purchasers (or mortgagees) the mortgage had to be recorded with the Patent Office. Mitsui correctly observes that the grant of a security interest [in a U.S. patent] is not a conveyance of a present ownership right in the patent and, that like the creation of some other lesser rights in a patent (such as licenses) is not required to be recorded with the Patent Office. . . . [The U.S. Supreme] Court’s opinion . . . stands for the proposition that bona fide purchaser holding a duly recorded conveyance of the ownership rights in a patent or a mortgagee who has recorded its interest as a transfer of title with the Patent Office will defeat the interests of a secured creditor of the grantor or mortgagor who has not filed notice of its security interest in the Patent Office. However, the trustee is in the position of a hypothetical lien creditor [11 U.S.C. § 544(a)(1)], not a bona fide purchaser. As such, his dispute with Mitsui can be governed by the Uniform Commercial Code provisions regulating competing lien claims against the patent without conflicting with the Patent Act’s provisions protecting bona fide purchasers of the patent. Absent a clear conflict between the two provisions, the U.C.C. provisions remain applicable. On the surface it may appear anomalous that a secured creditor could properly perfect under the U.C.C. and obtain protection against other competing lien creditors and yet not be protected against a bona fide purchaser or mortgagee who records with the Patent Office. But a security interest has two purposes: First, it protects the interest of a secured creditor in collateral against subsequent or competing lien claimants of its debtor. Secondly, a security interest

95. 35 U.S.C.S. § 261 (2009). 96. Transportation Design, 48 B.R. at 638; Moldo v. Matsco, Inc. (In re Cybernetic Servs.), 252 F.3d 1039, 1045 (9th Cir. 2001); City Bank & Trust Co. v. Otto Fabric, Inc., 83 B.R. 780, 784 (D. Kan. 1988). 97. Id. 98. Id.

Special Patent Issues in Bankruptcy II protects the secured creditor against the debtor transferring title to the collateral free of its interest. Ordinarily, perfecting a security interest in personalty in accordance with the U.C.C. would protect both interests of the secured creditor. However, where a federal statute, such as the Patent Act, governs one area or interest which the secured creditor wishes to protect (e.g., ownership), then the federal statute pre-empts any other method of protecting that interest and is conclusive on the manner of protecting that interest. In other words, if the secured creditor wishes to protect itself against the debtor transferring title to the patent to a bona fide purchaser or mortgagee who properly records, then the secured creditor must bring its security interest (which is not ordinarily a transfer of title) within the provisions of the Patent Act governing transfer of title to patents. Only in that way can its debtor be barred from transferring title until the debt is repaid. In most cases, the sophisticated lender lending on intellectual property is in the best position to decide which of its interests it wishes to protect and if sale or transfer of that property by the debtor is a substantial concern, it will perfect its security interest by recording an assignment, grant or conveyance of the patent with the Patent Office to prevent its transfer. The Court recognizes that this holding leaves a fairly narrow area remaining for state regulation. However, state law will still be required to resolve disputes and determine the relative rights of secured creditors and judgment lien claimants and between secured creditors, neither of whom have recorded with the Patent Office. In the absence of any overriding federal policy against it, the Uniform Commercial Code should continue to apply to the resolution of such matters.99

Therefore, under U.S. court cases that have directly addressed the issue of perfecting security interests in U.S. patents, such interests can be perfected against subsequent bankruptcy debtors (i.e., subsequent lien creditors) only by complying with the perfection requirements of the UCC, and not by filing with the U.S. Patent and Trademark Office.100 However, only a limited number of court cases have addressed this issue. Moreover, in In re Peregrine Entertainment, the court expressly rejected the holdings of City Bank & Trust Co. and Transportation Design in holding that in the context of perfecting a security interest in a registered U.S. copyright (also considered to be a “general intangible” under the UCC), federal copyright law preempts the UCC, so security interests can only be perfected by filing with the U.S. Copyright Office.101 The Peregrine court stated: [City Bank & Trust Co. and In re Transportation Design] misconstrue the plain language of UCC section 9104, which provides for the voluntary step back of

99. Transportation Design, 48 B.R. at 639–40. 100. Cybernetic Servs., 252 F.3d at 1045 (9th Cir. 2001); Transportation Design, 48 B.R. at 637–38; City Bank, 83 B.R. at 784. 101. In re Peregrine Entertainment, Ltd., 116 B.R. 194, 203 (C.D. Cal. 1990).

821

822

Chapter 22 Evaluating and Opining on One’s Own Patent Rights Article Nine’s provisions “to the extent [federal law] governs the rights of [the] parties.” UCC § 9104(a) (emphasis added). Thus, when a federal statute provides for a national system of recordation or specifies a place of filing different from that in Article Nine, the methods of perfection specified in Article Nine are supplanted by that national system; compliance with a national system of recordation is equivalent to the filing of a financing statement under Article Nine. UCC § 9302(4). Whether the federal statute also provides a priority scheme different from that in Article Nine is a separate issue, addressed below. Compliance with a national registration scheme is necessary for perfection regardless of whether federal law governs priorities. Cap Fed’s security interest [which was filed under UCC Article 9 but not recorded with the U.S. Copyright Office] in the copyrights of the films in NPI’s library and the receivables they have generated therefore is unperfected.102

Further, the Peregrine court stated: The district court in City Bank further held that, if Congress intended to preempt the field of filing and to require perfection in the Patent and Trademark Office, it could have explicitly said so. However, under UCC § 9302(3), the proper inquiry is not whether Congress has preempted state law—for Article Nine’s provisions clearly could not apply then—but rather whether Congress has established a regulatory scheme governing secured interests that is sufficiently comprehensive to supersede all or part of Article Nine by virtue of section 9104(a).103

Still further, U.S. Patent Office rules expressly provide for the filing of security interests in U.S. patents with the U.S. Patent and Trademark Office.104 Additionally, as discussed above, U.S. courts have noted that recording security interests in U.S. patents with the U.S. Patent and Trademark Office is necessary to protect security interests in U.S. patents against a debtor transferring title to a U.S. patent free from the security interest.105 Thus, as discussed above, for the following reasons the best practice to perfect security interests in U.S. patents is to file them both under the UCC and with the U.S. Patent and Trademark Office: (a) the paucity of U.S. court cases provides little guidance on how to perfect security interests in U.S. patents; (b) in Peregrine, a U.S. court has held that security interests in registered U.S. copyrights must be recorded with the U.S. Copyright Office; (c) the U.S. Patent and Trademark Office provides a means for recording security

102. 103. 104. 105.

Id. at 204 (footnote omitted). Id. at 204 n.12 (citation omitted). E.g., M.P.E.P. §§ 302.07, 313 (8th ed. 2008); U.S. Patent Office Form PTO-1595 (Rev. 07/05). Transportation Design, 48 B.R. at 637–38.

Special Patent Issues in Bankruptcy III

interests in U.S. patents; and (d) security interests in U.S. patents must be recorded with the U.S. Patent and Trademark Office to protect against sale of U.S. patents.106,107

VII. Special Patent Issues in Bankruptcy III: Do Not Separately Distribute Exclusionary (Ownership) Rights in a U.S. Patent from the Right to Sue for Infringement of the Patent An important consideration in distributing U.S. patent rights in bankruptcy is not to separately distribute the exclusionary (ownership) rights in a U.S. patent from the right to sue for infringement of the patent. If this happens, the patent cannot be enforced, because the party having the right to sue for patent infringement lacks legal standing to sue for patent infringement as that party does not have the exclusionary (ownership) rights to the patent.108 Further, this deficiency in standing cannot be remedied by having the party with the ownership (exclusivity) rights join the suit.109 This issue was addressed by the Federal Circuit in Morrow v. Microsoft110 in which a company owning a U.S. patent filed for reorganization under Chapter 11.111 Eventually, the bankruptcy court approved a liquidation plan that distributed various assets of the debtor company to various trusts. As part of the liquidation, one trust was given the right to bring suit for patent

106. E.g., Norton Bankruptcy Law and Practice d, ch, 177 (§ 22) (2008); Transportation Design, 48 B.R. at 637–38. 107. While it is beyond the scope of this treatise to address these issues in detail, it is nonetheless interesting to note how courts have held as to perfecting security interests against subsequent lien creditors in non-patent U.S. intellectual property rights. As noted above, a security interest in a registered U.S. copyright can be perfected only by recording with the U.S. Copyright Office, not under state UCC provisions. E.g., In re Peregrine Entertainment, Ltd., 116 B.R. 194, 203 (C.D. Cal. 1990); Morgan Creek Prods., Inc. v. Franchise Pictures LLC (In re Franchise Pictures LLC), 389 B.R. 131, 142 (C.D. Cal. 2008). Security interests in unregistered U.S. copyrights can be perfected only by filing under state UCC provisions. Aerocon Eng’g, Inc. v. Silicon Valley Bank (In re World Aux. Power Co.), 303 F.3d 1120, 1128 (9th Cir. Cal. 2002); In re Franchise Pictures, 389 B.R. at 142. Finally, like security interests in U.S. patents, security interests in U.S. trademarks can only be perfected against subsequent lien creditors only by filing under state UCC provisions. In re Together Dev. Corp., 227 B.R. 439, 441 (D. Mass. 1998); Joseph v. Valencia, Inc. (In re 199Z, Inc.), 137 B.R. 778, 782 (C.D. Cal. 1992). 108. Morrow v. Microsoft Corp., 499 F.3d 1332, 1344 (Fed. Cir. 2007). 109. Id. 110. Id. 111. Id. at 1334.

823

824


infringement on the subject patent (“the right to sue trust”), and a separate trust was given legal title to the patent and all rights other than the right to sue for patent infringement (“the patent-owning trust”).112 As explained by the court: [The right to sue trust] was given the right to bring suit [for infringement of the subject patent]. . . . There is no indication, however, that [this trust] holds the right to make, use, or sell the invention of the ’647 patent, much less the exclusive right to do any of these things with the patented technology. Additionally, [this trust] was not given the right to grant licenses or sublicenses under the patent or collect any licensing royalties. . . . [The patent-owning trust] holds legal title to the ’647 patent and all the “sticks” in the “bundle of rights” associated with the patent that were not specifically transferred to [the right to sue trust]. [The patent-owning trust] holds all rights to license the ’647 patent to third parties and collect royalties from those licenses, royalties not shared with [the right to sue trust]. [The patent-owning trust] also holds the exclusive right to make, use, and sell the patented technology—though it is contractually prohibited from exercising that right itself under the liquidation plan. [The patent-owning trust] may transfer any of its rights to the ’647 patent to third parties with the consent of [the right to sue trust].113

Following this distribution, the right to sue trust sued Microsoft for infringement of the patent.114 Among other motions, Microsoft filed a motion for summary judgment that the plaintiff (the right to sue trust) lacked standing to sue.115 The Federal Circuit held that the plaintiff trust lacked standing to sue for patent infringement and that this could not be cured by the patentowning trust joining the suit.116 In making its ruling, the court described three categories of infringement plaintiffs that are possible in a patent infringement suit: those who can sue in their own name, those who can sue if the patent owner is joined in the suit, and those who can never have proper standing to sue, even if the patent owner joins the suit: There are three general categories of plaintiffs encountered when analyzing the constitutional standing issue in patent infringement suits: those that can sue in their own name alone; those that can sue as long as the patent owner is joined in the suit; and those that cannot even participate as a party to an infringement suit.

112. 113. 114. 115. 116.

Id. at 1338. Id. Id. at 1335. Id. Id. at 1344.

Special Patent Issues in Bankruptcy III The first category includes plaintiffs that hold all legal rights to the patent as the patentee or assignee of all patent rights—the entire bundle of sticks. . . . When a party holds all rights or all substantial rights, it alone has standing to sue for infringement. The second category of plaintiffs hold exclusionary rights and interests created by the patent statutes, but not all substantial rights to the patent. As the grantee of exclusionary rights, this plaintiff is injured by any party that makes, uses, sells, offers to sell, or imports the patented invention. Parties that hold the exclusionary rights are often identified as exclusive licensees, because the grant of an exclusive license to make, use, or sell the patented invention carries with it the right to prevent others from practicing the invention. However, these exclusionary rights “must be enforced through or in the name of the owner of the patent,” and the patentee who transferred these exclusionary interests is usually joined to satisfy prudential standing concerns. The patentee is joined for the purpose of avoiding the potential for multiple litigations and multiple liabilities and recoveries against the same alleged infringer. . . . The third category of plaintiffs includes those that hold less than all substantial rights to the patent and lack exclusionary rights. . . . They are not injured by a party that makes, uses, or sells the patented invention because they do not hold the necessary exclusionary rights. This standing deficiency cannot be cured by adding the patent title owner to the suit.117

The court held that the right to sue trust lacked standing to sue for patent infringement, and that this could not be cured by having the patent-owning trust join the suit because the right to sue trust fell within the third category of potential plaintiffs: The problem for [both trusts] is the exclusionary rights [of the patent] have been separated from the right to sue for infringement. The liquidation plan contractually separated the right to sue from the underlying legally protected interests created by the patent statutes—the right to exclude. For any suit that [the right to sue trust] brings, its grievance is that the exclusionary interests held by [the patent-owning trust] are being violated. [The right to sue trust] is not the party to which the statutes grant judicial relief. [The right to sue trust] suffers no legal injury in fact to the patent’s exclusionary rights. As the Supreme Court stated in Independent Wireless, the right to bring an infringement suit is “to obtain damages for the injury to his exclusive right by an infringer.” 269 U.S. at 469; see also Prima Tek, 222 F.3d at 1381 (“Standing to sue for infringement depends entirely on the putative plaintiff ’s proprietary interest in the patent, not on any contractual arrangements among the parties regarding who may sue”); Ortho, 52 F.3d at 1034 (“[A] right to sue clause cannot negate the requirement

117. Id. at 1339–41 (citations and footnotes omitted).

825

826 Chapter 22 Evaluating and Opining on One’s Own Patent Rights that, for co-plaintiff standing, a licensee must have beneficial ownership of some of the patentee’s proprietary rights”).118

The court concluded: Only when a party holds the exclusionary rights to the patent but lacks all substantial rights may the party join the legal title owner in a suit to enforce patent rights. Joining the legal title holder only satisfies prudential standing requirements. It cannot cure constitutional standing deficiencies. Since [the right to sue trust] fails to meet constitutional standing requirements, it cannot be a party to this suit for patent infringement.119

Morrow is, therefore, a cautionary tale that when liquidating a U.S. patentowning estate in bankruptcy, care must be taken not to separate rights to sue for patent infringement from ownership rights of the patent such that “the exclusionary rights [of the patent are] separated from the right to sue for infringement.”120 Should this occur, the patent is rendered virtually worthless unless and if, the rights are rejoined to allow enforcement of the patent.

VIII. Practice Points A. Limitations on Scope of Chapter This chapter does not intend to provide a comprehensive guide of U.S. bankruptcy law or how it may affect all aspects of U.S. patent rights in bankruptcy. Therefore, it should not be relied upon for this teaching. Competent bankruptcy attorneys should always handle bankruptcy cases, including those of companies owning or licensing U.S. patents.

B. U.S. Patent Counsel Should Work with Bankruptcy Counsel on Bankruptcies Involving Companies Owning or Licensing U.S. Patent Rights Bankruptcies involving companies owning or licensing U.S. patent rights should involve competent U.S. patent counsel working with bankruptcy counsel. There are many issues in these bankruptcy cases in which U.S. patent counsel can

118. Id. at 1342. 119. Id. at 1344. 120. Id. at 1342.

Practice Points

enhance the outcome of the case for the debtor company and its creditors. For example, as discussed in Section IV, evaluations and opinions of U.S. patents in bankruptcy cases (including evaluations and opinions of patent clearance (freedom to operate), infringement, validity, enforceability, and ownership) can be used to maximize the liquidation value of an estate’s patent rights. Additionally, there are certain situations under U.S. bankruptcy law in which patent assets are treated differently from non-patent ones. This includes the treatment of patent licenses in bankruptcy (as discussed in Section V), the perfection of security interests in U.S. patents (as discussed in Section VI), and distribution of patent rights in liquidation (as discussed in Section VII).

C. A First Step in Any Bankruptcy Case of a Company Owning or Licensing Patent Rights Should Be a Patent Audit A first step in any bankruptcy case of a company owning or licensing U.S. patent rights should be a patent audit, which identifies and defines a company’s U.S. patent rights and evaluates whether the company is in compliance with U.S. patent laws to ensure that the company’s patent rights are properly protected. It is important that a patent audit be conducted as early as possible in a bankruptcy case because debtor companies may have deficiencies in complying with U.S. patent laws that can adversely affect their patent rights. Early discovery of certain deficiencies may allow for their correction, whereas lingering deficiencies can result in permanent loss of substantial patent rights.

D. Patent Audits Should Include Issued and Enforceable Patents as Well as Other Patent Rights It is important that patent audits account for issued and enforceable U.S. patents, as well as other forms of patent rights, which include patent licenses, patent applications, invention disclosures, and other evidence of invention (such as laboratory notebooks).

E. Patent License Should Be Characterized in Detail As discussed in Section V, the manner in which a bankruptcy trustee or debtor in possession can handle patent licenses in bankruptcy depends on the details of the licenses. Therefore, patent audits should report the specific details of a company’s patent licenses, including, but not limited to: (a) whether the license is exclusive; (b) whether the license is a contract in which performance is due to some extent on both sides and in which the obligations of both parties are so far unperformed upon bankruptcy filing that the failure of either

827


party to complete performance would constitute a material breach and thus excuse the performance of the other; and (c) whether the debtor party is the licensee or licensor.

F. Patent Ownership Should Be Investigated in Detail As discussed in Sections III and IV, the ownership of U.S. patent rights is extremely significant to their value. Every co-inventor on a U.S. patent has rights to exploit the entire patent at will—and with no accounting to the other co-inventors. Thus, a patent having even one co-inventor who is not obligated to assign his or her rights to the debtor company can be virtually valueless commercially because the non-assigning co-inventor can license or assign the patent to any party, or even dedicate the use of the patent to the public free of charge. Therefore, it is very important that those conducting patent audits carefully investigate the ownership of a debtor company’s U.S. patents. Because ownership of U.S. patents is based on inventorship, patent audits should contain a careful evaluation of their inventorship. An issue that deserves special attention in this regard is whether any collaborative ventures involving inventors from companies other than the debtor company may have made any patented inventions. In such cases, there may be co-inventors on a debtor company’s patents who are from different companies and have obligations to assign their patent rights to these companies.

G. The Bankruptcy Debtor’s Patent Attorneys Should Maintain the Company’s Patent Rights U.S. patent rights are not permanent, and are subject to premature loss if not properly and carefully managed. There are many obligations that must be met for a company’s patent rights to be maintained. These obligations include as nonlimiting examples: payment of maintenance fees on issued U.S. patents, timely compliance with deadlines and various requirements in pending patent applications, and timely preparation and filing of new patent applications. One of the first duties of a bankruptcy team’s patent counsel should be to evaluate and ensure that the company’s patent rights are properly maintained. This is of particular importance because companies in bankruptcy may have failed to maintain certain aspects of their patent rights. Timely review is important because certain failures can be corrected if addressed within specific time frames. Conversely, lingering failures to maintain U.S. patent rights can result in permanent loss of substantial patent rights. Moreover, at least one patent attorney should be assigned to ensure that the company’s patent rights are properly maintained throughout the bankruptcy case. This includes ensuring that the company’s patent applications are

Practice Points

prosecuted in a timely and correct manner in the U.S. Patent Office, and that new patent applications are timely prepared and filed for new inventions.

H. Use Evaluations and Opinions of U.S. Patents to Create a Patent Landscape from Which to Identify Third Parties That Might Be Especially Interested in Purchasing the Debtor Company’s Patent Rights in Liquidation As discussed in Section IV, patent evaluations and opinions (including those of clearance (freedom to operate), infringement, validity, enforceability, and ownership) of a debtor company’s patents are very useful, both in assisting in the valuation of a company’s patent assets and in identifying third parties who may be especially interested in acquiring the debtor company’s patent assets in liquidation. For example, these evaluations and opinions may be used to prepare a patent landscape of the debtor company’s technology. This landscape identifies key competitors within the industry who may be particularly interested in obtaining the debtor company’s patent rights in order to enhance their competitive patent position in the industry. Proper use of patent landscapes may even result in the identification of multiple competitors who may engage in bidding wars to obtain the debtor company’s patent rights, thereby increasing the value of the company’s patent rights.

I. Be Aware of Special Issues in U.S. Bankruptcy Law That Apply to U.S. Patent Rights, Including Executory Contract Issues for Patent Licenses As discussed in Section V, most patent licenses are treated as executory contracts under U.S. bankruptcy law. However, special rules apply to patent licenses. For example, whether a patent license is exclusive or non-exclusive affects the ability of a bankruptcy trustee or debtor in possession to assume or assign it. Further, special U.S. bankruptcy rules apply where the debtor company is a patent licensor.

J. Be Aware of Perfection Issues for Security Rights in U.S. Patents As discussed in Section VI, security interests in U.S. patents should be recorded both under the UCC and with the U.S. Patent and Trademark Office. However, under currently prevailing U.S. law, in order to have effect

829

830


against the hypothetical judicial lien of a bankruptcy trustee or debtor in possession, security interests in U.S. patents must be filed under the provisions of the UCC.

K. Be Aware of Special Issues in the Distribution of Patent Rights As discussed in Section VII, when liquidating an estate owning patent rights, one should avoid separately distributing the exclusionary (ownership) rights in a U.S. patent from the right to sue for infringement of the patent. A Federal Circuit case has held that doing so results in a situation in which the patent cannot be enforced because the party having the right to sue lacks standing because it lacks the exclusionary (ownership) rights in the patent.

CHAP T ER

23 Competency of, and Reliance on, Opinions for Avoiding Willful Infringement

I. Requirements for a Competent Opinion

833

A. The Opinion Need Not Be Correct

835

B. Opinion Must Not Be Incompetent on Its Face: Bald, Conclusory, Unsupported

835

C. Review of the Complete Prosecution History

837

D. Claim Construction

838

E. Proper Application of Law to Facts

839

F. The Preparer of the Opinion

840

G. Level of Certainty

841

H. Opinions Should Be Written

842

I. Timing of Opinions

842

J. Noninfringement Opinions

843

K. Invalidity Opinions

844

L. A Competent Opinion Need Not Address Both Noninfringement and Invalidity

845

M. Special Concerns for Evaluations and Opinions of Patent Unenforceability

846

II. Reliance on Opinions

847

III. Practice Points

850

A. Patent Counsel Should Not Be A Technical Expert

850

B. Qualifying the Technical Expert

850

C. All Opinions and Conclusions Should Be Clearly Based on Law and Fact

851

D. Be Certain the Law Is Up-to-Date and Is Properly Applied

851

E. Be Certain the Opinion Includes All Necessary Content for “A Competent Opinion”

852

831

832 Chapter 23 Competency of, and Reliance on, Opinions F. Legal Opinions Should Be Expressed Based on “What a Reasonable Court” Should Hold, Not on What the Opinion Drafter “Believes”

852

G. Level of Certainty and Disclaimers

852

H. Alternative Theories

853

I. Inform Opinion Recipient of Need for Recipient Reliance

853

J. Be Certain to Cover All Relevant Claims

853

Requirements for a Competent Opinion 833

Usage Note: This chapter covers the competency of, and reliance on, opinions for avoidance of willful infringement. Other chapters of relevance to this topic include Chapters 13 (reliance on opinions for avoidance of willful infringement) and 24 (waiver of attorney-client privilege and work product immunity), as well as Chapters 2–10 (patent law principles including claim construction, patent infringement, patent validity, and patent enforceability).

I. Requirements for a Competent Opinion As discussed detail in Chapter 13, “[t]he issue of willful infringement is resolved by evaluating the totality of the surrounding circumstances.”1 In order for an infringer to avoid willful infringement by relying on an opinion of counsel, the opinion must be objectively competent.2 However, as stated by the Federal Circuit: There are no hard and fast rules regarding a finding of willfulness. Rolls-Royce Ltd. v. GTE Valeron Corp., 800 F.2d 1101, 1110 (Fed. Cir. 1986). Rather, we have stated many times that a number of factors enter into a willfulness determination and, as such, the issue is properly resolved by evaluating the totality of the surrounding circumstances. Minnesota Mining and Mfg. Co. v. Johnson & Johnson Orthopaedics, Inc., 976 F.2d 1559, 1580 (Fed. Cir. 1992); Underwater Devices Inc. v. Morrison-Knudsen Co., 717 F.2d 1380, 1390 (Fed. Cir. 1983).3

Indeed, under the totality of the circumstances test for willful infringement, there is no bright-line standard for what makes an opinion competent. Rather, the determination whether an opinion is competent is guided by Federal Circuit cases that have addressed this issue. Further, it should be kept in mind that reliance on a competent opinion is only one of the factors that a court considers in determining whether an infringer’s actions were willful. As stated by the Federal Circuit: While we recognize that counsel’s opinion on validity is evidence to be weighed towards a determination of good faith, it is not dispositive. General Electric Co. v. Sciaky Bros., 415 F.2d 1068, 1073 (6th Cir. 1969). It is necessary to look at

1. Ortho Pharm. Corp. v. Smith, 959 F.2d 936, 944 (Fed. Cir. 1992). 2. Id.; Read Corp. v. Portec, Inc., 970 F.2d 816, 829 (Fed. Cir. 1992) (“That an opinion is ‘incompetent’ must be shown by objective evidence.”). 3. Graco, Inc. v. Binks Mfg. Co., 60 F.3d 785, 792 (Fed. Cir. 1995) (emphasis added).

834 Chapter 23 Competency of, and Reliance on, Opinions “the totality of the circumstances presented in the case,” Underwater Devices Inc. v. Morrison-Knudsen Co., 717 F.2d 1380, 1390 (Fed. Cir. 1983). . . .4

As discussed below, in some instances this totality of the circumstances test has led to surprising results. For example, the Federal Circuit has held that failure of a noninfringement opinion to consider infringement under the doctrine of equivalents “was not critical or dispositive,” where “the opinion letter contains enough other indicia of competence that failure to discuss infringement under the doctrine of equivalents is not fatal.”5 In another case, Sensonics, the Federal Circuit affirmed a holding of no willful infringement despite the fact that the court found that an invalidity opinion relied on by the infringer: [Made] no mention of Aerosonic’s copying and other objective indicia of unobviousness, although precedent requires that these factors be considered. See Stratoflex v. Aeroquip Corp., 713 F.2d 1530, 1539 (Fed. Cir. 1983) (evidence of objective considerations must always be taken into account).6

In Sensonics, despite the opinion failing to comply with what the Federal Circuit stated “precedent requires . . . be considered,” the Federal Circuit ultimately held under the totality of the circumstances test: Although the opinion of [the infringer]’s counsel is flawed, the issue of willfulness raises questions of credibility as well as weight, and findings thereon are not readily reversed. See King Instrument Corp. v. Otari Corp., 767 F.2d 853, 867 (Fed. Cir. 1985) (giving due deference to the trier’s right to determine credibility and weight). The district court found that [the infringer] timely retained patent counsel and reasonably relied on counsel’s opinion. . . . On the whole we do not discern clear error in the district court’s findings and conclusion [of no] willful infringement.7

Regardless of these unusual cases, the best approach for preparing an opinion of patent noninfringement and/or invalidity is to be certain that the opinion contains each of the subjects discussed below as being important for opinion competency. On the other hand, the Federal Circuit has articulated a general standard by which the competency of an opinion of noninfringement and/or invalidity

4. Central Soya Co. v. Geo. A. Hormel & Co., 723 F.2d 1573, 1577 (Fed. Cir. 1983); In re Hayes Microcomputer Prods., Inc. Patent Litig., 982 F.2d 1527, 1543 (Fed. Cir. 1992) (“Although reliance on competent counsel’s opinion is evidence of good faith, it is not conclusive.”). 5. Westvaco Corp. v. International Paper Co., 991 F.2d 735, 744 (Fed. Cir. 1993); Ortho, 959 F.2d at 945. 6. Sensonics, Inc. v. Aerosonic Corp., 81 F.3d 1566, 1571 (Fed. Cir. 1996) (emphasis added). 7. Id.


should be judged in order to defend against willful infringement: A court must objectively determine the opinion is “thorough enough, as combined with other factors, to instill a belief in the infringer that a court might reasonably hold the patent is invalid, not infringed, or unenforceable.”8

A. The Opinion Need Not Be Correct An opinion of noninfringement and/or invalidity need not be correct to be competent. In fact, a court will only consider the issue of whether an opinion is competent after it has found infringement of valid claims and is then considering whether the infringement was willful.9 As explained by the Federal Circuit: “While an opinion of counsel letter is an important factor in determining the willfulness of infringement, its importance does not depend upon its legal correctness. Indeed, the question arises only where counsel was wrong.”10 The Federal Circuit has also stated that “[a] party is not guilty of ignoring patent rights because it resolves a close question of infringement in its favor.”11 Finally, as summarized by the Federal Circuit in Graco: Whether or not an opinion was “legally” correct is not the proper focus. Read Corp., 970 F.2d at 830 (“That counsel’s opinion turned out to be contrary to our judgment with respect to the [asserted] patent does not make his advice regarding that patent incompetent.”); Ortho Pharmaceutical, 959 F.2d at 944 (“While an opinion of counsel letter is an important factor in determining the willfulness of infringement, its importance does not depend upon its legal correctness.”)12

B. Opinion Must Not Be Incompetent on Its Face: Bald, Conclusory, Unsupported Where an opinion makes “only bald, conclusory and unsupported remarks,” a court may rule that the opinion is “incompetent on its face.”13 “A written opinion may be incompetent on its face by reason of its containing merely conclusory statements without discussion of facts or obviously presenting only a superficial or off-the-cuff analysis.”14 For example, under the circumstances

8. 9. 10. 11. 12. 13. 14.

Ortho, 959 F.2d at 944 (emphasis added). Id. Id. (emphasis added). Id. at 945. Graco, Inc. v. Binks Mfg. Co., 60 F.3d 785, 793–94 (Fed. Cir. 1995). Read Corp. v. Portec, Inc., 970 F.2d 816, 829 (Fed. Cir. 1992). Id.

836 Chapter 23 Competency of, and Reliance on, Opinions

described below, in Underwater Devices the Federal Circuit found infringement to be willful, and held that the infringer’s purported reliance on an opinions of counsel to “clearly demonstrate [the infringer]’s willful disregard for the [infringed] patents[:]” In this case, M-K obtained its counsel’s advice after it commenced its infringing activities. Although Mr. Schlanger did order a patent search and received the results of that search in late 1973, he did not evaluate the validity or infringement of the Robley patents before M-K began the infringing activities. Such an evaluation would generally include an analysis of the file history of the patent. Mr. Schlanger, however, did not order the file histories of the Robley patents until September 5, 1974, well after the infringement had begun. Moreover, M-K did not receive the opinion of its patent counsel until November 30, 1974, long after infringement had commenced and even after the complaint for the instant case was filed. Contrary to appellant’s contention that it proceeded with the infringing activities in good faith based on the advice of its counsel, Mr. Schlanger, we disagree. Rather, M-K knew or should have known that it proceeded without the type of competent legal advice upon which it could justifiably have relied. M-K knew that the attorney from whom it sought advice was its own in-house counsel. While this fact alone does not demonstrate M-K’s lack of good faith, it is a fact to be weighed. See Western Electric Co. v. Stewart-Warner Corp., 631 F.2d 333, 337 (4th Cir. 1980), cert. denied, 450 U.S. 971, 67 L. Ed. 2d 622, 101 S. Ct. 1492 (1981). In addition, M-K knew or should have known that Mr. Schlanger was not a patent attorney. Again, this fact alone is not controlling, but does bear on the question whether M-K, when it sought advice, did so in good faith. Although M-K might have demonstrated to the district court that despite any inference arising from these circumstances, it was in fact justified in believing Mr. Schlanger was capable of rendering an independent and competent opinion because he did take the steps normally considered to be necessary and proper in preparing an opinion, it failed to do so. As stated previously, Mr. Schlanger did not order the file histories until September, 1974, such step being a normal and necessary preliminary to a validity or infringement opinion. In addition, M-K might have demonstrated to the district court that its counsel’s opinion, without an analysis of the file histories, was in fact thorough and competent. Although the December, 1973 memorandum may be considered legal advice, it was not legal advice upon which the appellant was justified in relying, since it was not based on an evaluation of the validity or infringement of the Robley patents. The May, 1974 memorandum is similarly inadequate. It contains only bald, conclusory and unsupported remarks regarding validity and infringement of the Robley patents. Had it contained within its four corners a patent validity analysis, properly and explicitly predicated on a review of the file histories of the patents at issue, and an infringement analysis that, inter alia, compared and contrasted the potentially infringing method or apparatus with the patented inventions, the opinion may have contained sufficient internal indicia of creditability to remove any doubt

Requirements for a Competent Opinion 837 that M-K in fact received a competent opinion. What these memoranda clearly demonstrated was M-K’s willful disregard for the Robley patents.15

C. Review of the Complete Prosecution History The Federal Circuit has emphasized that competent opinions should be based on a review of the prosecution history of the patent.16 For example, the court in Underwater Devices found an opinion to be incompetent in part because the opinion drafter failed to review the prosecution history prior to the infringer beginning its infringing activity.17 The court stated that reviewing the prosecution history of a patent is “a normal and necessary preliminary to a validity or infringement opinion.”18 Further, in Datascope, in finding an opinion to be incompetent, the Federal Circuit faulted the drafters for: [H]aving never ordered, let alone consulted, the ’339’s prosecution history before rendering their opinion. See Underwater Devices, Inc. v. Morrison-Knudsen Co., 717 F.2d 1380, 1390, (Fed. Cir. 1983) (validity and infringement opinion “would generally include an analysis of the file history of the patent”).19

Still further, in Jurgens, the Federal Circuit stated: “The steps ‘normally considered to be necessary and proper in preparing an opinion’ include a thorough review of the cited prior art and prosecution history. Underwater Devices, 717 F.2d at 1389–90.”20 Finally, as discussed in Chapter 2, the complete prosecution history in the U.S. Patent Office of a U.S. patent includes the prosecution history of the

15. Underwater Devices v. Morrison-Knudsen Co., 717 F.2d 1380, 1390 (Fed. Cir. 1983), overruled on other grounds, In re Seagate Tech., LLC, 497 F.3d 1360 (Fed. Cir. 2007) (emphasis added); compare Westvaco Corp. v. International Paper Co., 991 F.2d 735, 744 (Fed. Cir. 1993) (“Counsel’s opinions in this case are clearly competent and Westvaco was justified in relying on them. Each opinion letter begins with a statement that the opinion is based on a review of the file history of the patent, the prior art of record, and additional prior art. Thus, the opinions evidence an adequate foundation. Moreover, the opinions are not conclusory. The validity and infringement issues are analyzed in detail, including discussions of the prior art, the accused device, and the claim language. The claims are not discussed as a group but are separately analyzed.”). 16. Id. 17. Id. 18. Id. 19. Datascope Corp. v. SMEC, Inc., 879 F.2d 820, 828 (Fed. Cir. 1989); compare Westvaco, 991 F.2d at 744 (“Counsel’s opinions in this case are clearly competent and Westvaco was justified in relying on them. Each opinion letter begins with a statement that the opinion is based on a review of the file history of the patent.”). 20. Jurgens v. CBK, Ltd., 80 F.3d 1566, 1572 (Fed. Cir. 1996).

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application that issued as the subject patent. It also includes the prosecution histories of other U.S. patent applications that are formally related to the subject patent wherein a common claim term was at issue. Applications that are formally related to a patent include: (a) parent and ancestor applications from which the patent at issue is related as, or via, continuation, divisional, or continuation-in-part applications from the parent or ancestor applications; (b) sibling applications to the patent at issue that are related to the patent at issue by pending from a common ancestor or parent application as, or via, continuation, divisional, or continuation-in-part applications; and (c) child and grandchild applications that are related to the patent at issue as, or via, continuation, divisional, or continuation-in-part applications.21 Therefore, the prosecution history of a patent may include formally related applications having at least one claim term in common with the patent at issue, wherein the related applications were prosecuted in the U.S. Patent Office before, during, or even after prosecution of the application that issued as the patent at issue.

D. Claim Construction As discussed in Chapter 2, claim construction is central to any patent infringement or validity analysis. Thus, a competent opinion of patent noninfringement and/or invalidity must construe the patent’s claims. For example, in Critikon v. Becton Dickinson, the Federal Circuit found that opinions were not sufficiently competent to overcome a charge of willful infringement where the opinions contained “no analysis of specific claims, [and] no interpretation of claim language. . . .”22

21. E.g., Goldenberg v. Cytogen, Inc., 373 F.3d 1158, 1167–68 (Fed. Cir. 2004); Microsoft Corp. v. Multi-Tech Sys., Inc., 357 F.3d 1340, 1349 (Fed. Cir. 2004); Advanced Cardiovascular Sys. v. Medtronic, Inc., 265 F.3d 1294, 1305 (Fed. Cir. 2001); Abbott Labs. v. Dey, L.P., 287 F.3d 1097, 1105 (Fed. Cir. 2002); NTP, Inc. v. Research in Motion, Ltd., 418 F.3d 1282, 1293 (Fed. Cir. 2005); Verizon Servs. Corp. v. Vonage Holdings Corp., 503 F.3d 1295, 1306 (Fed. Cir. 2007); Jonsson v. Stanley Works, 903 F.2d 812, 818 (Fed. Cir. 1990); Alloc, Inc, v. ITC, 342 F.3d 1361, 1371–72 (Fed. Cir. 2003); Augustine Med., Inc. v. Gaymar Indus, Inc., 181 F.3d 1291, 1300 (Fed. Cir. 1999); Elkay Mfg. Co. v. Ebco Mfg. Co., 192 F.3d 973, 980 (Fed. Cir. 1999); Wang Labs, Inc. v. Am. Online, Inc., 197 F.3d 1377, 1384 (Fed. Cir. 1999); Omega Eng’g, Inc. v. Raytek Corp., 334 F.3d 1314, 1333–35 (Fed. Cir. 2003); Datamize L.L.C. v. Plumbtree Software, Inc., 417 F.3d 1342, 1345, 1353 (Fed. Cir. 2005). 22. Critikon, Inc. v. Becton Dickinson Vascular Access, Inc., 120 F.3d 1253, 1259–60 (Fed. Cir. 1997); compare Westvaco, 991 F.2d at 744 (“Counsel’s opinions in this case are clearly competent and Westvaco was justified in relying on them. Each opinion letter begins with a statement that the opinion is based on a review of the file history of the patent, the prior art of record, and additional prior art. Thus, the opinions evidence an adequate foundation. Moreover, the opinions are not conclusory. The validity and infringement issues are analyzed in detail, including discussions of the prior art, the accused device, and the claim language. The claims are not discussed as a group but are separately analyzed.”).


As discussed in Chapter 2, the Phillips en banc leading Federal Circuit case on claim construction holds that “the prosecution history can often inform the meaning of the claim language by demonstrating how the inventor understood the invention and whether the inventor limited the invention in the course of prosecution, making the claim scope narrower than it would otherwise be.”23

E. Proper Application of Law to Facts A competent opinion should recite the relevant, up-to-date law and correctly apply the law to the facts. The Federal Circuit has held that the failure of an experienced patent attorney to perform specific legal research for an opinion “does not per se make the opinion of a lawyer who specializes in patents incompetent.”24 However, a legion of Federal Circuit rulings in cases have found opinions to be incompetent for failing to consider and apply the correct law to the facts. For example, in In re Hayes Microcomputer, the Federal Circuit stated: Mr. Enlow, Hayes’ expert witness, testified in detail that the letter did not give Ven-Tel a reasonable basis for believing in good faith that the ’302 patent was invalid. He stated that the letter treated the claims of the ’302 patent superficially, failed to set out a standard for one of ordinary skill in the art, failed to consider secondary considerations in determining obviousness, mischaracterized prior art, and failed to perform a proper best mode analysis. . . . Mr. Call’s opinion letter makes broad and conclusory statements with little, if any, support.25

In CellPro, the Federal Circuit noted: Substantial evidence supports the district court’s conclusion that a reasonable jury could have concluded that the opinion letters were not adequate to defeat a finding of willfulness. . . . It is therefore reasonable to conclude that Kiley should have been on notice concerning the opinions’ obvious shortcomings and accordingly of the impropriety of CellPro’s course of action. See, e.g., Underwater Devices, Inc. v. Morrison-Knudsen Co., 717 F.2d 1380, 1390 (Fed. Cir. 1983). The opinions did not attempt to link the disclosures of the prior art references relied upon to establish anticipation or obviousness with the limitations of the

23. Phillips v. AWH Corp., 415 F.3d 1303, 1317 (Fed. Cir. 2005) (en banc); Nystrom v. Trex Co., Inc., 424 F.3d 1136, 1142 (Fed. Cir. 2005). 24. Read Corp. v. Portec, Inc., 970 F.2d 816, 829 (Fed. Cir. 1992). 25. In re Hayes Microcomputer Prods., Inc. Patent Litig., 982 F.2d 1527, 1543 (Fed. Cir. 1992) (emphasis added).

840 Chapter 23 Competency of, and Reliance on, Opinions claims of the patents. . . . Further, the opinion letters are merely conclusory as to their allegations concerning inequitable conduct, and importantly make no mention that intent to deceive is a necessary component of this defense, a fact that is often difficult to establish. . . . Under the circumstances, we cannot say that a reasonable jury could not have concluded that the opinion letters were ineffective to instill in CellPro, through Kiley, reasonable confidence that its activities did not infringe valid patents.26

Additionally, in Kori, the Federal Circuit held: The finding of willful infringement in this case was based on defendants’ failure “to establish good faith reliance upon an authoritative opinion of invalidity” from counsel before beginning to manufacture the infringing units. Wilco argues that a letter sent to Marine Contractors Company, a potential customer, by their original defense counsel in this infringement suit constitutes “confirmation by counsel of the invalidity of the [’785] patent prior to the infringing sales and rentals for which plaintiff seeks damages.” The letter was written after this infringement suit was commenced by Kori, recounts that Wilco has challenged the validity of Kori’s patent in the litigation, and included a statement by Wilco’s counsel that says “I have every reason to believe that the validity of the aforesaid patent cannot be maintained and that it will be declared to be null and void by the court handling the litigation.” Such a conclusory account of defense counsel’s aspirations for winning an infringement suit without any supporting reasons does not amount to an “authoritative opinion” upon which a good faith reliance on invalidity may be founded. Central Soya, 723 F.2d at 1577. The district court considered this evidence and concluded that Wilco had willfully infringed, with no good faith belief that the patent was invalid. Wilco has failed to show that the district court’s finding of willful infringement was clearly erroneous. Accordingly, it did not abuse its discretion in doubling the pecuniary damage award as exemplary damages.27

F. The Preparer of the Opinion “The competency requirement applies to both the qualifications of the person giving the opinion and to the content of the opinion itself.”28 The Federal

26. Johns Hopkins Univ. v. CellPro, Inc., 152 F.3d 1342, 1364 (Fed. Cir. 1998) (some citations omitted, emphasis added). 27. Kori Corp. v. Wilco Marsh Buggies & Draglines, 761 F.2d 649, 657 (Fed. Cir. 1985) (citations omitted, emphasis added). 28. Jurgens v. CBK, Ltd., 80 F.3d 1566, 1572 (Fed. Cir. 1996).


Circuit has affirmed a willfulness finding where the infringer obtained a noninfringement opinion from an in-house German patent counsel but failed to obtain an opinion from a U.S. patent attorney.29 The Federal Circuit has also noted that if the preparer of a patent noninfringement or invalidity opinion is not a patent attorney, this fact is “not alone controlling, but does bear on the question whether [the infringer], when it sought advice, did so in good faith.”30 Similarly, the Federal Circuit has held that the fact that an opinion was obtained from in-house counsel (as opposed to independent outside counsel) may be considered in determining whether an infringer sought advice in good faith.31 A reason courts may consider an opinion by outside counsel to be stronger than one prepared by in-house counsel is the perceived independence of outside attorneys as compared with in-house attorneys.32

G. Level of Certainty The Federal Circuit has recognized that “[a]n opinion of counsel, of course, need not unequivocally state that the client will not be held liable for infringement. An honest opinion is more likely to speak of probabilities than certainties.”33 As the Federal Circuit explained in Westvaco: We note that the district court’s finding that the opinion letters were “equivocal” also does not require a finding of willfulness. . . . Indeed, counsel’s opinion letters in this case spoke in terms of probabilities. For example, the final version of the ’575 opinion letter stated that “it was more likely than not” that the claims would be held invalid over the prior art.34

Still further, the Federal Circuit has held that “[a] party is not guilty of ignoring patent rights because it resolves a close question of infringement in its favor.”35

29. Spindelfabrik Suessen-Schurr Stahlecker & Grill GmbH v. Schubert & Salzer Maschinenfabrik Aktiengesellschaft, 829 F.2d 1075, 1084 (Fed. Cir. 1987). 30. Underwater Devices v. Morrison-Knudsen Co., 717 F.2d 1380, 1390 (Fed. Cir. 1983). 31. Id. 32. Id.; Minn. Mining & Mfg. Co. v. Johnson & Johnson Orthopaedics, Inc., 976 F.2d 1559, 1564 (Fed. Cir. 1992) (in-house opinion not objective). 33. Read Corp. v. Portec, Inc., 970 F.2d 816, 829 n.9 (Fed. Cir. 1992). 34. Westvaco Corp. v. Int’l Paper Co., 991 F.2d 735, 744 (Fed. Cir. 1993). 35. Ortho Pharm. Corp. v. Smith, 959 F.2d 936, 945 (Fed. Cir. 1992).

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H. Opinions Should Be Written The Federal Circuit has clearly held that “[a]s this court has recognized, oral opinions are not favored. Shiley, Inc. v. Bentley Lab., Inc., 601 F. Supp. 964, 968 (C.D. Cal. 1985), aff ’d., 794 F.2d 1561 (Fed. Cir. 1986); Bott, 807 F.2d at 1572.”36 The court has explained that oral opinions “carry less weight, for example, because they have to be proved perhaps years after the event, based only on testimony which may be affected by faded memories and the forces of contemporaneous litigation.”37

I. Timing of Opinions Opinions should be delivered prior to the beginning of the potentially infringing activity. In a number of cases, the Federal Circuit has stressed the importance of opinions being delivered at this time. This includes the potential infringer obtaining revised and updated noninfringement opinions for changes in commercial products or processes before they are commercialized. For example, in Underwater Devices the Federal Circuit noted: In this case, M-K obtained its counsel’s advice after it commenced its infringing activities. Although Mr. Schlanger did order a patent search and received the results of that search in late 1973, he did not evaluate the validity or infringement of the Robley patents before M-K began the infringing activities. Such an evaluation would generally include an analysis of the file history of the patent. Mr. Schlanger, however, did not order the file histories of the Robley patents until September 5, 1974, well after the infringement had begun. Moreover, M-K did not receive the opinion of its patent counsel until November 30, 1974, long after infringement had commenced and even after the complaint for the instant case was filed. . . . Although M-K might have demonstrated to the district court that despite any inference arising from these circumstances, it was in fact justified in believing Mr. Schlanger was capable of rendering an independent and competent opinion because he did take the steps normally considered to be necessary and proper in preparing an opinion, it failed to do so. As stated previously, Mr. Schlanger did not order the file histories until September, 1974, such step being a normal and necessary preliminary to a validity or infringement opinion.38

Similarly, in Kori, the Federal Circuit found the fact that “the [opinion] letter was written after this infringement suit was commenced by Kori”

36. Minn. Mining, 976 F.2d at 1580 (emphasis added). 37. Id. 38. Underwater Devices v. Morrison-Knudsen Co., 717 F.2d 1380, 1390 (Fed. Cir. 1983) (emphasis added).


worked against a finding of no willful infringement.39 Further, in Westvaco, the Federal Circuit found that “[c]ounsel’s opinions in this case are clearly competent and Westvaco was justified in relying on them,” finding no willful infringement, in part because “Westvaco’s efforts were not ‘after-the-fact.’ Westvaco sought advice of counsel before it originally began manufacturing the accused product in June 1989. As soon as Westvaco became aware of the reissue patent, Westvaco immediately requested updated advice from counsel.”40 Still further, in Graco, the Federal Circuit looked favorably on an infringer who: Nearly two years before starting the manufacture of its own pumps, indeed, before designing any models, . . . sought advice from its counsel Mr. O’Reilly regarding avoiding infringement of others’ patents. . . . [A] full 1 1/2 years prior to the manufacture of its pumps began, Poly-Craft obtained an opinion from Mr. O’Reilly addressing the ’109 patent. His letter noted the broader scope of the ’109 patent’s claims, but he still concluded that “it should be possible to design an alternative sealing arrangement which will not infringe either of these patents.”41

J. Noninfringement Opinions In accordance with the requirements addressed above, a person creating a competent noninfringement opinion should review the complete prosecution history of the patent42 (including all related applications), review the specification and prior art,43 construe the claims,44 and compare the construed claims with the noninfringing product or process.45 Although some Federal Circuit cases have held that a determination of infringement under the doctrine of equivalents may not be necessary if other factors under the “totality of the circumstances” favor non-willful infringement,46 the best practice is for a noninfringement opinion to determine noninfringement under both literal infringement and under the doctrine

39. Kori Corp. v. Wilco Marsh Buggies & Draglines, 761 F.2d 649, 656 (Fed. Cir. 1985) (emphasis added). 40. Westvaco Corp. v. Int’l Paper Co., 991 F.2d 735, 744 (Fed. Cir. 1993) (emphasis added). 41. Graco, Inc. v. Binks Mfg. Co., 60 F.3d 785, 792 (Fed. Cir. 1995). 42. Underwater Devices, 717 F.2d at 1390; Datascope Corp. v. SMEC, Inc., 879 F.2d 820, 828 (Fed. Cir. 1989); Jurgens v. CBK, Ltd., 80 F.3d 1566, 1572 (Fed. Cir. 1996). 43. Jurgens, 80 F.3d at 1572. 44. Critikon, Inc. v. Becton Dickinson Vascular Access, Inc., 120 F.3d 1253, 1259–60 (Fed. Cir. 1997). 45. Graco, 60 F.3d at 793 (“[T]he opinion provided a detailed infringement analysis.”). 46. Westvaco Corp. v. Int’l Paper Co., 991 F.2d 735, 744 (Fed. Cir. 1993); Ortho Pharm. Corp. v. Smith, 959 F.2d 936, 945 (Fed. Cir. 1992); Sensonics, Inc. v. Aerosonic Corp., 81 F.3d 1566, 1571 (Fed. Cir. 1996).


of equivalents. Additionally, it is important for a noninfringement opinion to describe accurately the infringing product or process when it is compared with the claims of the patent-at-issue.47 Further, any noninfringement opinion should be revised or reissued whenever any changes are made to the potentially infringing product.48 For further information on preparing a competent noninfringement evaluation and opinion, see Chapter 2 (claim construction), Chapter 3 (literal infringement), and Chapter 4 (infringement under the doctrine of equivalents).

K. Invalidity Opinions In accordance with the requirements addressed above, someone creating a competent invalidity opinion should review the complete prosecution history of the patent49 (including all related applications), review the specification and prior art,50 construe the claims,51 and compare the construed claims with the prior art (for prior art-based invalidity) or specification (e.g., for written description and enablement-based invalidity).52 Additionally, it is important for the person issuing a noninfringement opinion to, if possible, search for and apply prior art that was not considered by the Patent Office in allowing the patent.53 In addition, invalidity opinions must address every claim that is at issue, including the dependent claims.54 Opinions of invalidity based on obviousness under 35 U.S.C. § 103 should also address secondary considerations as “objective indicia” of non-obviousness.55

47. Westvaco, 991 F.2d at 744; Graco, 60 F.3d at 792. 48. Westvaco, 991 F.2d at 744; Graco, 60 F.3d at 792. 49. Underwater Devices v. Morrison-Knudsen Co., 717 F.2d 1380, 1390 (Fed. Cir. 1983); Datascope Corp. v. SMEC, Inc., 879 F.2d 820, 828 (Fed. Cir. 1989); Jurgens v. CBK, Ltd., 80 F.3d 1566, 1572 (Fed. Cir. 1996). 50. Jurgens, 80 F.3d at 1572. 51. Critikon, Inc. v. Becton Dickinson Vascular Access, Inc., 120 F.3d 1253, 1259–60 (Fed. Cir. 1997). 52. Johns Hopkins Univ. v. CellPro, Inc., 152 F.3d 1342, 1364 (Fed. Cir. 1998); In re Hayes Microcomputer Prods., Inc. Patent Litig., 982 F.2d 1527, 1543 (Fed. Cir. 1992). 53. Central Soya Co. v. Geo. A. Hormel & Co., 723 F.2d 1573, 1576–66 (Fed. Cir. 1983) (finding that an opinion that relied only on prior art from the prosecution history did not overcome willfulness); Hayes, 982 F.2d at 1543 (opinion “mischaracterized prior art. . . .”). 54. CellPro, 152 F.3d at 1363–64; Hayes, 982 F.2d at 1543 (opinion “treated the claims of the ’302 patent superficially. . . .”). 55. Hayes, 982 F.2d at 1543 (opinion treated patent “failed to consider secondary considerations in determining obviousness. . . .”); Sensonics, Inc. v. Aerosonic Corp., 81 F.3d 1566, 1571 (Fed. Cir. 1996) (“Indeed, the opinion of counsel makes no mention of Aerosonic’s copying


For further information on preparing a competent invalidity evaluation and opinion, see Chapter 2 (claim construction), Chapter 6 (anticipation by printed publication), Chapter 7 (other forms of anticipation), Chapter 8 (obviousness), and Chapter 9 (other forms of invalidity).

L. A Competent Opinion Need Not Address Both Noninfringement and Invalidity A competent opinion need not address both noninfringement and invalidity. It is sufficient that the opinion conclude that no valid claims are infringed. This may be done by it containing a finding: (a) all claims to be noninfringed and invalid; (b) all claims to be noninfringed, without addressing validity of any claims; (c) all claims to be invalid, without addressing noninfringement of any claims; or (d) finding any combination of noninfringement and invalidity, such that no valid claim is infringed. As described by the Federal Circuit: DirecTV obtained an opinion of counsel, which concluded that DirecTV did not infringe the ’505 patent, but took no position on validity. Based on that opinion, DirecTV proceeded to practice its system. The district court faulted DirecTV in part for not obtaining an opinion on validity, weighing its failure to do so in Finisar’s favor on the question of willfulness. But the ’505 patent would only have been a problem for DirecTV if DirecTV infringed it and it was valid. See Graco, Inc. v. Binks Mfg. Co., 60 F.3d 785, 793 (Fed. Cir. 1995) (“There is no requirement that an opinion must address validity to negate a finding of willful infringement.”) (citation omitted) (emphasis in original). Thus a competent opinion of counsel concluding either that DirecTV did not infringe the ’505 patent or that it was invalid would provide a sufficient basis for DirecTV to proceed without engaging in objectively reckless behavior with respect to the ’505 patent.56

and other objective indicia of unobviousness, although precedent requires that these factors be considered. Stratoflex v. Aeroquip Corp., 713 F.2d 1530, 1539 (Fed. Cir. 1983) (evidence of objective considerations must always be taken into account).”). 56. Finisar Corp. v. DirecTV Group, Inc., 523 F.3d 1323, 1339 (Fed. Cir. 2008) (emphasis added); Graco, Inc. v. Binks Mfg. Co., 60 F.3d 785, 793 (Fed. Cir. 1995) (“Graco also argues that Binks could not have relied on Juettner’s opinion in good faith because the opinion(s) did not discuss the validity of the ’109 patent. The district court also noted this omission. This argument is specious. There is no requirement that an opinion must address validity to negate a finding of willful infringement.”).


M. Special Concerns for Evaluations and Opinions of Patent Unenforceability Evaluations and opinions of patent unenforceability are rare, especially opinions of unenforceability for purposes of avoiding willful infringement. As discussed in Chapter 10, this is necessarily the case because a court’s determination of unenforceability is highly fact-dependent. As opinions to counter willful infringement are necessarily performed on third party patents, the opinion drafter generally lacks access to the facts necessary to fully evaluate and determine the strengths and weaknesses of an opinion of unenforceability. Indeed, when evaluating a third party patent for any issue (including potential inequitable conduct), the only evidence that is typically accessible related to the patent is what is publicly available. Generally, the only publicly available information on a patent (especially related to the acquisition of a patent) is the patent itself and the patent’s prosecution history in the U.S. Patent Office. This evidence rarely, if ever, is sufficient to show the likelihood of a court finding a patent unenforceable. Indeed, unenforceability, especially inequitable conduct, is generally proven through evidence that only becomes available under discovery in the context of patent litigation. This is particularly true when evaluating and opining on patent unenforceability based on inequitable conduct (fraud on the Patent Office in procuring a U.S. patent). As discussed in Chapter 10, proving inequitable conduct requires: [S]howing by “clear and convincing evidence that the applicant (1) made an affirmative misrepresentation of material fact, failed to disclose material information, or submitted false material information, and (2) intended to deceive the [Patent and Trademark Office].” Cargill, Inc. v. Canbra Foods, Ltd., 476 F.3d 1359, 1363 (Fed. Cir. 2007).57

Still further, even when a challenger has shown both materiality and intent by clear and convincing evidence, a court may still not hold a patent to be unenforceable. As explained by the Federal Circuit: [E]ven if this elevated evidentiary burden met as to both elements [i.e., proving both materiality and intent by clear and convincing evidence], the district court must still balance the equities to determine whether the applicant’s conduct before the PTO was egregious enough to warrant holding the entire patent unenforceable.58

57. Praxair, Inc. v. ATMI, Inc., 543 F.3d 1306, 1313 (Fed. Cir. 2008) (bracketing in original). 58. Star Sci., Inc. v. R.J. Reynolds Tobacco Co., 537 F.3d 1357, 1365–66 (Fed. Cir. 2008).

Reliance on Opinions

Thus, it is clearly difficult to predict with reasonable certainty that, based on publicly available information, a reasonable court would hold a third party’s patent to be unenforceable. This difficulty was highlighted by the Federal Circuit in Johns Hopkins Univ. v. Cellpro, where the court held that an opinion of counsel of patent unenforceability was not sufficiently competent to support reasonable reliance on the opinion by an infringer necessary to avoid a finding of willful infringement.59 In particular, the Cellpro court found that the aspect of the opinion based on unenforceability was conclusory and failed to address the intent element of inequitable conduct.60 The Federal Circuit not only found willful infringement for lack of reasonable reliance on a competent opinion, but also affirmed the district court’s trebling of the infringement damages.61 Thus, it is generally advisable to avoid opining on patent unenforceability (especially based on inequitable conduct), especially in opinions for the avoidance of willful infringement.

II. Reliance on Opinions In addition to the requirement that a noninfringement and/or invalidity opinion must be objectively competent for an infringer to avoid willful infringement, the infringer must also show that it reasonably relied on the advice contained in the opinion. “A critical factor in evaluating the effect of an opinion of counsel on willfulness is the reasonableness of a party’s reliance thereon.”62 As explained by the Federal Circuit: “To overcome the district court’s holding of willful infringement, [the infringer] had not only to show an opinion from competent counsel but also that it had exercised reasonable and good faith adherence to the analysis and advice therein.”63 Additionally, as discussed in Chapter 13, Section V, Federal Circuit opinions issued after In re Seagate continue to find reliance on opinions to be important in avoiding willful infringement. Most Federal Circuit cases that fail to find good faith reliance on a competent opinion do so because the infringer disregarded the opinion. For example, in Central Soya, the court concluded that the infringement was willful because the infringer intentionally disregarded the noninfringement advice of its opinion letter. The court noted: [The infringer] asserts that it relied upon attorney opinions “before and after engaging in any of the acts charged to be an infringement of the patent in suit,”

59. 60. 61. 62.

Johns Hopkins Univ. v. CellPro, Inc., 152 F.3d 1342, 1364–65 (Fed. Cir. 1998). Id. Id. at 1365. Graco, Inc. v. Binks Mfg. Co., 60 F.3d 785, 793 (Fed. Cir. 1995); Lexion Med., LLC v. Northgate Techs., Inc., 292 Fed. Appx. 42, 51 (Fed. Cir. 2008) (unpublished). 63. Central Soya Co. v. Geo. A. Hormel & Co., 723 F.2d 1573, 1577 (Fed. Cir. 1983).

847

848 Chapter 23 Competency of, and Reliance on, Opinions and “operated within the parameters set forth in those opinions for avoiding infringement. . . .” While we agree that reliance is an important factor in determining good faith, there is no support for [the infringer’s] assertion of reliance in the record. Moreover, it is in direct contradiction with the district court’s findings of fact. The opinion letter, discussed above, stated: “I believe that [the infringer] is reasonably safe in manufacturing the meat product if it can do so by expanding the area [of the patty] less than 100%” and “the further away from 100% it can stay, the less likely it is to infringe the Luker [Central Soya] patent.” (Emphasis ours.) . . . Although Hormel sought its counsel’s advice prior to production, Hormel waited 2 years “post-production” to measure its patties to determine the extent of expansion. Such inaction is inconsistent with the assertion of good faith reliance. Even though the measurement, once taken, showed that the expansion of the patties was within the range recommended by counsel, that fact is not probative of good faith reliance, nor is it probative of whether infringement occurred during the prior 2 years since the measurement was taken after the inclusion of a molding press in the production line which had an effect on the amount of expansion. Hormel’s intentional disregard of its counsel’s opinion negates any inference of good faith, placing Hormel in the same position as one who failed to secure the advice of counsel.64

In another case where the Federal Circuit found lack of good faith reliance, the court described the following situation: At trial, [the infringer] produced three written opinions from outside counsel dated May 29, 1997, May 30, 1997, and June 30, 1997, in an attempt to show that it relied on legal advice to make and sell the infringing trocars. However, the first letter was simply “shipped off in the mail,” the second letter did not address infringement of the claims of the ’553 patent and was limited to the issue of contempt, and the third letter arrived after [the infringer] began selling Versaport II. Based on this evidence, a jury could have reasonably concluded that [the infringer] paid little if any attention to the opinion letters. Other evidence also undermines [the infringer]’s alleged good faith reliance on the legal opinions. [the infringer]’s former Senior Vice President and General Counsel, testified that [the infringer] wanted “no gap” in the supply of Versaport trocars once the Applied I injunction took effect on May 20, 1997. A reasonable jury could have believed that [the infringer] was not concerned about infringement and would have proceeded to manufacture Versaport II despite receiving outside legal opinions. [The infringer’s S.V.P.] also offered additional testimony from which a jury could have inferred that he did not rely on the legal opinions as legitimate advice as to whether Versaport II infringed, but rather sought legal opinions for

64. Id. (emphasis in original, emphasis added).

Reliance on Opinions their potential evidentiary value on the issue of willful infringement in future litigation. This could have suggested to the jury that [the infringer] did not rely on any opinions of counsel in good faith.65

Still further, in Harris Corp., the Federal Circuit found lack of good faith reliance on an opinion of noninfringement where the infringer both ignored the opinion and potentially supplied its opinion counsel with inaccurate information on the infringing product:66 See generally Read Corp. v. Portec, Inc., 970 F.2d 816, 828–29 (Fed. Cir. 1992) (“Those cases where willful infringement is found despite the presence of an opinion of counsel generally involve situations where opinion of counsel was either ignored or found to be incompetent.”). At trial, [opinion counsel] could not confirm that any executive with decision-making authority in [the infringer]’s marketing or engineering departments had ever relied on the opinion. Also, [the infringer] does not contest Harris’s assertion that it is unclear whether the known recipients of the opinion, two in-house attorneys, had any product or marketing responsibility. While the responsibilities of those who received the opinion are not dispositive of whether [the infringer] “ignored” the opinion, the evidence does suggest that little, if any, attention was given to the document within [the infringing company]. Other evidence undermines the foundations of the opinion. The jury could have concluded that the information [the infringer] supplied to [opinion counsel], in the form of a memo prepared by two [infringing company] engineers, contained false or misleading information about the operation of [the infringer]’s products. The memo, on which [opinion counsel] relied, contained questionable factual assertions, such as a contention that [the infringer]’s products do not compensate for distortion in received information. Additionally, [opinion counsel] admitted that, contrary to his usual practice when offering an opinion on infringement issues, he did not obtain documentation from [the infringer] on how the accused products work, except for the memo that [the infringer] specifically prepared for his use in drafting his opinion. This evidence provided the jury with some basis for believing that [the infringer] ignored the opinion of counsel it received regarding the ’338 patent; that the opinion was simply a rehashing of [the infringer]’s own internal conclusions on noninfringement, without independent verification by opinion counsel; and that [the infringer] failed to convey accurate information to its opinion counsel.67

65. Applied Med. Res. Corp. v. U.S. Surgical Corp., 435 F.3d 1356, 1365 (Fed. Cir. 2006) (emphasis added). 66. Harris Corp. v. Ericsson Inc., 417 F.3d 1241, 1259 (Fed. Cir. 2005). 67. Id. (emphasis added).

849


Finally, in CellPro, the Federal Circuit found lack of good faith reliance where the infringer’s representative who procured the opinion letters was a highly qualified patent attorney “who should have been on notice concerning the opinion’s obvious shortcomings and accordingly of the impropriety of CellPro’s course of action.”68

III. Practice Points A. Patent Counsel Should Not Be A Technical Expert It is important to recognize—and to point out expressly in writing in all patent evaluations and opinions—that opinion counsel is not a technical expert. All technical issues and opinions should be based on representations made by an expert in the relevant field. Opinion counsel is only qualified to opine on legal issues.

B. Qualifying the Technical Expert Any patent evaluation or opinion should contain a qualification of its technical expert(s). This may be done much like qualifying a technical witness for trial. First, the opinion drafter must define the level of skill at which the technical expert is opining. This standard is often the level of “one or ordinary skill in the relevant art.” This level of skill should be defined with precision and with support (e.g., by describing the education level and number of years of experience that a person of defined skill would have, as supported by reference to court cases in the same or closely related technologies). Issues to keep in mind include being sure that the technical expert possessed the requisite level of skill at the relevant point in time. For example, for invalidity opinions based on obviousness, a technical expert may be used to opine that one of ordinary skill in the relevant art would have found a patent’s claims to have been obvious at the date of the filing of the application that issued as the patent. In such a case, it is important that the evaluation or opinion qualify the expert as being of the sufficient level of skill at the time the patent application was filed. Another common issue is the overqualified expert. In many instances, such as opinions of obviousness, the requisite level of skill is “one of ordinary skill in the relevant art.” However, the technical expert for the opinion is frequently more qualified than this. In such cases, care should be taken to describe with particularity why the expert is capable of opining as to what one

68. Johns Hopkins Univ. v. CellPro, Inc., 152 F.3d 1342, 1364 (Fed. Cir. 1998).

Practice Points

of “ordinary skill in the art” would have understood at the relevant time. One way to handle this is to include in the opinion a section as follows: Technical Expert All technical issues and opinions expressed and relied on herein are based solely on representations made to us by Dr. Jones. Dr. Jones is Director of Development of XYZ Corporation. Dr. Jones works full time in developmental biology, in particular on limb regeneration. Dr. Jones received his Ph.D. in developmental biology from Harvard 1985. After working as a post-doctoral fellow for five years, Dr. Jones went to work for XYZ Corporation as a Staff Scientist in 1990. Since joining XYZ Corporation, Dr. Jones has worked exclusively in developmental biology related to limb regeneration. Dr. Jones has held various positions at XYZ Corporation, and has been Director of Development since 1998. A copy of Dr. Jones’ c.v. is attached as Exhibit 1. We understand from Dr. Jones that one of ordinary skill in the art related to the ’123 patent, at the time the application for the patent was filed in March 2003, would have possessed a Ph.D. in developmental biology and have had from two to five years of post-doctoral experience in limb regeneration. While Dr. Jones’ level of experience in 2003 was greater than the defined level of one of ordinary skill in the art, we understand from Dr. Jones that he is capable of opining from the point of view of one of ordinary skill in the art in March 2003. This is because Dr. Jones regularly worked with such persons in 2003. For example, in 2003 Dr. Jones personally worked with, and supervised, persons having the defined level of ordinary skill in the art. Therefore, it is our understanding that Dr. Jones is capable of opining as to, for example, what would have been obvious to one of ordinary skill in the relevant art in March 2003.

C. All Opinions and Conclusions Should Be Clearly Based on Law and Fact Be certain that all opinions and conclusions are clearly based on law and fact that has been sufficiently developed in the evaluation or opinion. A competent opinion should never be conclusory.

D. Be Certain the Law Is Up-to-Date and Is Properly Applied It is essential that the complete legal background for all determinations in a patent opinion or evaluation be fully set forth in the opinion (or as an appendix to the opinion). It is critical that the law be up-to-date and focused. Avoid the common pitfall of “boilerplate” legal background sections that generally discuss patent law and may omit legal issues of specific importance to the evaluation or opinion—or may be out-of-date.

851


The legal background section should be tailored to the specific legal issues of relevance to the opinion. For example, a detailed legal background section on Festo-type prosecution history estoppel would be inappropriate in a noninfringement opinion that does not address or depend on Festo-type prosecution history estoppel. Unnecessary and unfocused legal background can create an impression of a “boilerplate opinion.”

E. Be Certain the Opinion Includes All Necessary Content for “A Competent Opinion” It is essential that an opinion include the subject matter of this chapter that the Federal Circuit has held is required for a competent opinion. This includes, for example, a review of the patent’s prosecution history (and related prosecution histories), the patent’s specification, the claims, and the relevant prior art. Proper claim construction is required for any opinion based on the claims. This includes virtually all patent evaluations and opinions (rare exceptions would include noninfringement opinions based solely on expiration of the patent term).

F. Legal Opinions Should Be Expressed Based on “What a Reasonable Court” Should Hold, Not on What the Opinion Drafter “Believes” A preferred way to phrase opinions of law in patent opinions is to indicate how “a reasonable court of competent jurisdiction should hold” based on the facts and law discussed in the opinion. For example: “It is our opinion that, based on the facts, the technical issues and opinions discussed herein by Dr. Jones, and the law discussed herein, a reasonable court of competent jurisdiction should hold that the New Widget does not infringe any valid claim of the ’123 patent.” This manner of phrasing legal opinions is preferable to stating “we believe that New Widget does not infringe any valid claims of the ’123 patent.” The emphasis should be on opining as to what a reasonable court should hold, not what the opinion drafter believes.

G. Level of Certainty and Disclaimers Opinions should avoid expressions of absolute certainty. Regardless of the law and facts, it is not possible to predict with absolute certainty what a U.S. court might hold.

Practice Points

Moreover, opinions should contain an explanation of this fact. See Appendices A, B, and C for examples of how to explain and express levels of certainty in patent opinions.

H. Alternative Theories A competent opinion need only express one theory if it covers all claims of the subject patent. Many opinion drafters will choose the strongest noninfringement and/or invalidity theory and express only that one theory in an opinion. However, alternative theories may be expressed and relied upon, if they are consistent and do not weaken the overall impact of the opinion.

I. Inform Opinion Recipient of Need for Recipient Reliance As discussed above, successful use of a noninfringement and/or invalidity opinion to avoid willful infringement requires both a competent opinion and good faith reliance on that opinion by the potential infringer. Thus, the opinion drafter should be certain that the opinion recipient understands the need for good faith reliance on the opinion. This includes, for example, having the opinion reviewed by decision-making personnel within the recipient company. It may not be sufficient to prove reasonable reliance if an opinion is communicated only to an in-house attorney and not to decision-making management.

J. Be Certain to Cover All Relevant Claims As explained in detail in Chapter 3, in most situations, a noninfringement opinion may show noninfringement of all claims by expressly showing noninfringement of only the independent claims. This is because Federal Circuit law holds that if an independent claim is not infringed, its dependent claims cannot be infringed. On the other hand, invalidity must be shown on a claim-by-claim basis.

853


CHAP T ER

24 Waiver of Attorney-Client Privilege and Work Product Immunity

I. Attorney-Client Privilege and Work Product Immunity II. Attorney-Client Privilege and Waiver Generally A. Waiver of Attorney-Client Privilege III. Work Product Immunity and Waiver Generally A. Waiver of Work Product Immunity IV. Attorney-Client Privilege and Reliance on Opinions of Noninfringement and/or Invalidity to Avoid Willful Infringement

857 857 858 859 860

862

A. Attorney-Client Privilege Waived for All Opinion-Related Communications with Opinion Counsel

863

B. Attorney-Client Privilege Not Waived for Communications with Trial Counsel Where Trial Counsel Is Separate from Opinion Counsel

864

C. Importance of Maintaining Separate Opinion and Trial Counsel

867

V. Work Product Immunity and Reliance on Opinions of Noninfringement and/or Invalidity to Avoid Willful Infringement

868

A. Work Product Waiver Is More Flexible and Less Broad than Waiver of Attorney-Client Privilege

869

B. In re Echostar: Waiver of Work Product Immunity Does Not Extend to Subject Matter Not Communicated to the Client

869

C. In re Seagate: Work Product Immunity Not Waived for Communications with Trial Counsel Where Trial Counsel Is Separate from Opinion Counsel

873

D. Importance of Maintaining Separate Opinion and Trial Counsel

876

855

856 Chapter 24 Waiver of Attorney-Client Privilege and Work Product Immunity VI. Waiver of Attorney-Client Privilege and Work Product Immunity of Opinions of Counsel in Due Diligence

876

A. Overview: Exercise Due Care with Attorney-Client Privilege and Work Product Immunity in Due Diligence

877

B. Choice of Law for Waiver in Patent Due Diligence

877

C. Disclosure of a Privileged Opinion to a Third Party May Result in Waiver of the Attorney-Client Privilege and Work Product Immunity of the Opinion

879

D. Disclosure of a Privileged Opinion to a Third Party May Waive All Privileges Associated with the Opinion, Even if the Disclosure Is Confidential and Under a Confidentiality Agreement

880

E. The Common Interest Doctrine

882

F. Other Considerations When Disclosing Privileged Materials to Third Parties During Due Diligence

888


888


888


889


889

5. Plan on Waiver

890


890

A. Reliance on an Opinion of Counsel of Noninfringement and/or Invalidity to Counter Willful Infringement in Litigation Waives Only Certain Attorney-Client Privileges and Work Product Immunities Associated with the Opinion

890

B. The Importance of Maintaining Separate Opinion and Trial Counsel

891

C. Exercise Extreme Caution in Disclosing Attorney-Client Privileged and Work Product Protected Materials to Third Parties, Even in Due Diligence Investigations

891

1. Ideally, the Acquiring Company Should Obtain Its Own Patent Evaluations and Opinions

891


892


892


892


893

Attorney-Client Privilege and Waiver Generally

Usage Note: This chapter covers waiver of attorney-client privilege and work product immunity. Perhaps the most common reason for waiver of privilege of evaluations and opinions on U.S. patents is the production of opinions in infringement litigation where an infringer produces a noninfringement and/or invalidity opinion in order to avoid a finding of willful infringement. (Chapter 13 covers the use of noninfringement and invalidity opinions for this purpose.) Another common reason for waiver of privilege of evaluations and opinions on U.S. patents is undesired waiver that may occur with the disclosure of opinions of counsel in patent due diligence. (Chapters 11 and 19 discuss IP due diligence for mergers, acquisitions, and licensing, with Chapter 19 in particular discussing waiver risks associated with a target company disclosing its opinions to an acquiring company.)

I. Attorney-Client Privilege and Work Product Immunity Attorney-client privilege and work product immunity (also called work product privilege and work product protection) are long-sanctioned legal protections afforded to specific types of communications and documents. While the privileges are related, they are distinct legal constructs. Generally, the attorneyclient privilege relates to communications between attorney and client while work product protection covers documents and mental impressions made by an attorney. As discussed below, courts developed these protections to ensure the confidentiality of attorney-client communications and documents. However, these protections are subject to a number of specific rules that must be followed closely in order to maintain them. Events such as public production of confidential documents or reliance in court on attorney-client communications may trigger a waiver of attorney-client and/or work product privileges. As discussed below, attorney-client privilege and work product immunity raise interesting and complex issues in the context of evaluations and opinions of U.S. patents, including issues related to waiver and the scope of waiver.

II. Attorney-Client Privilege and Waiver Generally The Supreme Court has described the attorney-client privilege as “the oldest of the privileges for confidential communications known to common law.”1

1. Upjohn Co. v. United States, 449 U.S. 383, 389 (1981); Knorr-Bremse Systeme Fuer Nutzfahrzeuge GmbH v. Dana Corp., 383 F.3d 1337, 1344 (Fed. Cir. 2004).

857

858 Chapter 24 Waiver of Attorney-Client Privilege and Work Product Immunity

The Court has stressed that the public purpose the attorney-client privilege is: [T]o encourage full and frank communication between attorneys and their clients and thereby promote broader public interests in the observance of law and administration of justice. The privilege recognizes that sound legal advice or advocacy serves public ends and that such advice or advocacy depends upon the lawyer’s being fully informed by the client.2

As explained by Professor Wigmore in his well-known treatise Evidence in Trials at Common Law: The lawyer must have the whole of his client’s case, or he cannot pretend to give any useful advice. . . . That the whole will not be told to counsel unless the privilege is confidential, is perfectly clear. A man who seeks advice, seeks it because he believes that he may do so safely; he will rarely make disclosure which may be used against him; rather than create an adverse witness in his lawyer, he will refuse all private arbitration, and take the chance of a trial. 3

A. Waiver of Attorney-Client Privilege As explained by the Federal Circuit in its en banc In re Seagate case: “The attorney-client privilege belongs to the client, who alone may waive it.”4 “The widely applied standard for determining the scope of a waiver . . . is that the waiver applies to all other communications relating to the same subject matter.”5 The Federal Circuit stated: This broad scope is grounded in principles of fairness and serves to prevent a party from simultaneously using the privilege as both a sword and a shield; that is, it prevents the inequitable result of a party disclosing favorable communications while asserting the privilege as to less favorable ones. Echostar, 448 F.3d at 1301; Fort James, 412 F.3d at 1349. Ultimately, however, “[t]here is no bright line test for determining what constitutes the subject matter of a waiver, rather courts weigh the circumstances of the disclosure, the nature of the legal advice

2. Upjohn, 449 U.S. at 389. 3. J. Wigmore, Evidence in Trials at Common Law § 2291, at 548 (McNaughton rev. 1961); Hunt v. Blackburn, 128 U.S. 464, 470, 32 L. Ed. 488, 9 S. Ct. 125 (1888) (the attorney-client privilege is designed to encourage candid exchange of information). 4. In re Seagate Tech., LLC, 497 F.3d 1360, 1372 (Fed. Cir. 2007) (en banc); Knorr-Bremse, 383 F.3d at 1345; Am. Standard, Inc. v. Pfizer, Inc., 828 F.2d 734, 745 (Fed. Cir. 1987). 5. Fort James Corp. v. Solo Cup Corp., 412 F.3d 1340, 1349 (Fed. Cir. 2005).

Work Product Immunity and Waiver Generally sought and the prejudice to the parties of permitting or prohibiting further disclosures.” Fort James, 412 F.3d at 1349–50.6

III. Work Product Immunity and Waiver Generally The work product doctrine is “designed to balance the needs of the adversary system: promotion of an attorney’s preparation in representing a client versus society’s general interest in revealing all true and material facts to the resolution of a dispute.”7 Unlike the attorney-client privilege, which provides absolute protection from disclosure, work product protection is qualified and may be overcome by need and undue hardship.8 However, the level of need and hardship required for discovery depends on whether the work product is factual or the result of mental processes such as plans, strategies, tactics, and impressions, and whether it is memorialized. Whereas factual work product can be discovered solely upon a showing of substantial need and undue hardship, mental process work product is afforded greater, nearly absolute, protection.9 Additionally, the work product doctrine was partially codified in Rule 26(b)(3) of the Federal Rules of Civil Procedure, which applies work product protection to “documents and tangible things.”10 Courts, however, continue to apply Supreme Court precedent holding that the work product doctrine also applies to “nontangible” work product.11

6. 7. 8. 9.

Seagate, 497 F.3d at 1372. In re Martin Marietta Corp., 856 F.2d 619, 624 (4th Cir. 1988); Seagate, 497 F.3d at 1375. Fed. R. Civ. Pro. 26(b)(3). Upjohn Co. v. United States, 449 U.S. 383, 400 (1981); Holmgren v. State Farm Mut. Auto. Ins., 976 F.2d 573, 577 (9th Cir. 1992) (holding that work product “may be discovered and admitted when mental impressions are at issue in a case and the need for the material is compelling”); Office of Thrift Supervision v. Vinson & Elkins, LLP, 326 U.S. App. D.C. 332, 124 F.3d 1304, 1307 (D.C. Cir. 1997) (“virtually undiscoverable”); but see Nat’l Union Fire Ins. Co. v. Murray Sheet Metal Co., 967 F.2d 980, 984 (4th Cir. 1992) (“‘absolutely’ immune from discovery”). 10. Fed. R. Civ. Pro. 26(b)(3). 11. Seagate, 497 F.3d at 1376; Hickman v. Taylor, 329 U.S. 495, 499 (1947); In re Cendant Corp. Sec. Litig., 343 F.3d 658, 662–63 (3d Cir. 2003); United States v. One Tract of Real Property, 95 F.3d 422, 428 n.10 (6th Cir. 1996).

859


A. Waiver of Work Product Immunity As with the attorney-client privilege, work product protection may be waived.12 The Federal Circuit has indicated: Protecting lawyers from broad subject matter of work product disclosure “strengthens the adversary process, and . . . may ultimately and ideally further the search for the truth.” Martin Marietta, 856 F.2d at 626; accord Echostar, 448 F.3d at 1301 (“[W]ork-product immunity . . . promotes a fair and efficient adversarial system. . . .”); Coastal States Gas Corp. v. Dep’t of Energy, 199 U.S. App. D.C. 272, 617 F.2d 854, 864 (D.C. Cir. 1980) (“The purpose of the privilege, however, is not to protect any interest of the attorney . . . but to protect the adversary trial process itself. It is believed that the integrity of our system would suffer if adversaries were entitled to probe each other’s thoughts and plans concerning the case.”). In addition, trial counsel’s mental processes . . . enjoy the utmost protection from disclosure; a scope of waiver commensurate with the nature of such heightened protection is appropriate. See Martin Marietta, 856 F.2d at 625–26.13

However, although the attorney-client privilege and work product immunity are related concepts, they are different legal constructs in that the waiver of the attorney-client privilege does not necessarily result in waiver of work product protection. Furthermore, unlike waiver of attorney-client privilege, in which waiver of one privileged communication may result in a waiver that “applies to all other communications relating to the same subject matter,”14 waiver of work product immunity may have a much narrower scope.15 The scope of work product waiver is of particular significance regarding evaluations and opinions of U.S. patents. In discussing the scope of waiver of work product immunity, the en banc Seagate court stated: The Supreme Court has approved of narrowly restricting the scope of work product waiver. In United States v. Nobles, a criminal case, an accused armed robber presented the testimony of an investigator in an attempt to discredit the two eyewitnesses. When they testified for the prosecution, the defense attorney relied on the investigator’s report in cross-examining the eyewitnesses. 422 U.S. at 227. After the prosecution rested, the defense attempted to call the investigator to testify. The trial court, however, ruled that if the investigator testified, his

12. 13. 14. 15.

United States v. Nobles, 422 U.S. 225, 239 (1975). Seagate, 497 F.3d at 1375–76. Fort James Corp. v. Solo Cup Corp., 412 F.3d 1340, 1349 (Fed. Cir. 2005). E.g., Seagate, 497 F.3d at 1376; In re EchoStar Communs. Corp., 448 F.3d 1294, 1303–1304 (Fed. Cir. 2006).

Work Product Immunity and Waiver Generally affirmative testimony would mandate disclosure of the portions of his report relating to his testimony. Id. at 229. The Supreme Court agreed that the investigator’s affirmative testimony waived work product protection, but it approvingly noted the “quite limited” scope of waiver imposed by the trial court and its refusal to allow a general “fishing expedition” into the defense files or even the investigator’s report. Id. at 239–40.16

As explained in more detail below, the Seagate court held: [A]s a general proposition, relying on opinion counsel’s work product does not waive work product immunity with respect to trial counsel. Again, we leave open the possibility that situations may arise in which waiver may be extended to trial counsel, such as if a party or his counsel engages in chicanery. And, of course, the general principles of work product protection remain in force, so that a party may obtain discovery of work product absent waiver upon a sufficient showing of need and hardship, bearing in mind that a higher burden must be met to obtain that pertaining to mental processes. See Fed. R. Civ. Pro. 26(b)(3).17

As held by Federal Circuit in In re Echostar (and as discussed in more detail below): [W]ork product, which is never communicated to the client, is not discoverable. Under Rule 26(b)(3), this so-called “opinion” work product deserves the highest protection from disclosure. See Adlman, 134 F.3d at 1197. While an accused infringer may waive the immunity for work product that embodies an opinion in letters and memorandum communicated to the client, he does not waive the attorney’s own analysis and debate over what advice will be given. See Ortho Pharm., 959 F.2d at 944. Upon waiver of attorney-client privilege, communicative documents, such as opinion letters, become evidence of a nonprivileged, relevant fact, namely what was communicated to the client, see Nobles, 422 U.S. at 239 n. 14 (“Where . . . counsel attempts to make a testimonial use of [work-product] materials the normal rules of evidence come into play with respect to . . . production of documents.”); however, counsel’s legal opinions and mental impressions that were not communicated do not acquire such factual characteristics and are, therefore, not within the scope of the waiver. As the Martin Marietta Corp. court noted, There is relatively little danger that a litigant will attempt to use a pure mental impression or legal theory as a sword and as a shield in the trial of a case so as to distort the factfinding process. Thus, the protection of lawyers from the broad repercussions of subject matter waiver in this context strengthens the

16. Seagate, 497 F.3d at 1376. 17. Id.

861

862 Chapter 24 Waiver of Attorney-Client Privilege and Work Product Immunity adversary process, and, unlike the selective disclosure of evidence, may ultimately and ideally further the search for the truth. 856 F.2d at 626. Thus, if a legal opinion or mental impression was never communicated to the client, then it provides little if any assistance to the court in determining whether the accused knew it was infringing, and any relative value is outweighed by the policies supporting the work-product doctrine.18

IV. Attorney-Client Privilege and Reliance on Opinions of Noninfringement and/or Invalidity to Avoid Willful Infringement The issues of attorney-client privilege and waiver of attorney-client privilege arise when an infringer chooses to rely on an opinion of noninfringement and/or invalidity in a patent infringement suit. As discussed in Chapter 13, 35 U.S.C. § 284, second paragraph, provides that a court may enhance infringement damages up to threefold in the event that the court finds the infringement willful.19 “[T]o establish willful infringement, a patentee must show by clear and convincing evidence that the infringer acted despite an objectively high likelihood that its actions constituted infringement of a valid patent.”20 In order to provide evidence against a finding of willful infringement, infringers often rely on opinions of patent counsel that the activity ultimately found by the court to be infringing was, in the objective opinion of the patent counsel, noninfringing activity and/or that the infringed patent was invalid.21 When an infringer relies on such an opinion, waiver becomes an issue.

18. 19. 20. 21.

EchoStar, 448 F.3d at 1303–4. E.g., Seagate, 497 F.3d at 1360. Id. at 1371. As discussed in Chapter 13, the law regarding the use of noninfringement and/or invalidity opinions to avoid a finding of willful infringement is undergoing change. The most recent Federal Circuit en banc case on this issue, Seagate, held that there is no affirmative obligation of a potential infringer to obtain an opinion of noninfringement and/or invalidity to avoid a finding of willful infringement. 497 F.3d at 1371. However, Seagate did not hold that opinions of noninfringement and/or invalidity could not be used to counter an assertion of willful infringement. Moreover, at least two Federal Circuit cases following Seagate have held that an infringer’s reliance on an opinion of noninfringement and/or invalidity was sufficient to avoid a finding of willful infringement under Seagate’s objective recklessness standard of willfulness. Finisar Corp. v. DirecTV Group, Inc., 523 F.3d 1323, 1339 (Fed. Cir. 2008); Lexion Med., LLC v. Northgate Techs., Inc., 292 Fed. Appx. 42, 51 (Fed. Cir. 2008) (unpublished). Therefore, it is likely that infringers will continue to rely on opinions of noninfringement and/or invalidity to avoid willful infringement.

Attorney-Client Privilege and Reliance on Opinions of Noninfringement 863

Federal Circuit law is clear: Once a party announces that it will rely on advice of counsel, for example, in response to an assertion of willful infringement, the attorney-client privilege is waived. “The widely applied standard for determining the scope of a waiver of attorney-client privilege is that the waiver applies to all other communications relating to the same subject matter.” Fort James Corp. v. Solo Cup Co., 412 F.3d 1340, 1349 (Fed. Cir. 2005).22

However, as explained below, there is a difference between the waiver of attorney-client privilege for communications between the infringer and its opinion counsel as opposed to communications between the infringer and its trial counsel.

A. Attorney-Client Privilege Waived for All Opinion-Related Communications with Opinion Counsel In In re EchoStar, the infringer obtained two opinions of counsel of noninfringement and/or invalidity of the infringed patent.23 One opinion was by the infringer’s in-house counsel and was obtained prior to filing of the infringement lawsuit.24 After the action was filed, the infringer obtained a second opinion from a law firm.25 The infringer chose to rely only on the in-house opinion.26 The Federal Circuit ruled that the infringer’s reliance on the in-house attorney’s opinion created a waiver of all attorney-client privilege related to the issue of noninfringement and invalidity of the infringed claims.27 This included all communications between the infringer and the law firm, even though the opinion of the law firm was never relied upon by the infringer.28 The court reasoned that “[o]nce a party announces that it will rely on advice of counsel . . . in response to an assertion of willful infringement, the attorneyclient privilege is waived” and “the scope of . . . waiver . . . applies to all other communications relating to the same subject matter.”29

22. 23. 24. 25. 26. 27. 28. 29.

EchoStar, 448 F.3d at 1299 (emphasis added). Id. at 1297. Id. Id. Id. Id. at 1299. Id. Id.

864 Chapter 24 Waiver of Attorney-Client Privilege and Work Product Immunity Thus, when [the infringer] EchoStar chose to rely on the advice of in-house counsel, it waived the attorney-client privilege with regard to any attorneyclient communications relating to the same subject matter, including communications with counsel other than in-house counsel, which would include communications with [law firm] Merchant & Gould.30

Therefore, when an infringer or an accused infringer relies on a noninfringement and/or invalidity opinion in court to counter a charge of willful infringement, the infringer waives all attorney-client privilege to all communications with any opinion counsel related to the issue of infringement and/or validity of the claims at issue.

B. Attorney-Client Privilege Not Waived for Communications with Trial Counsel Where Trial Counsel Is Separate from Opinion Counsel On the other hand, the Federal Circuit has held that where there is a clear separation between an infringer’s opinion counsel and trial counsel, reliance on an opinion of counsel to counter willful infringement waives the attorneyclient privilege as to all correspondence with opinion counsel, but does not waive the attorney-client privilege with the infringer’s trial counsel.31 In In re Seagate, defendant Seagate retained counsel to provide opinions as to noninfringement and invalidity of the patents-in-suit.32 According to the Federal Circuit, “[t]here is no dispute that Seagate’s opinion counsel operated separately and independently of trial counsel at all times.”33 During the course of the litigation, Seagate notified the plaintiff that it intended to rely on its opinion counsel’s opinions of noninfringement and invalidity in defending against a charge of willful infringement.34 In response, the plaintiff sought production of the opinions of Seagate’s trial counsel related to infringement and noticed depositions of Seagate’s trial counsel.35 After the trial court denied Seagate’s objections, the Federal Circuit: [S]tayed the discovery orders and, recognizing the functional relationship between our willfulness jurisprudence and the practical dilemmas faced in the areas of attorney-client privilege and work product protection, sua sponte

30. 31. 32. 33. 34. 35.

Id. Seagate, 497 F.3d at 1373. Id. at 1366. Id. Id. Id. at 1366–67.

Attorney-Client Privilege and Reliance on Opinions of Noninfringement 865 ordered en banc review of the petition. The en banc order set out the following questions: Should a party’s assertion of the advice of counsel defense to willful infringement extend waiver of the attorney-client privilege to communications with that party’s trial counsel? See In re EchoStar Commc’n Corp., 448 F.3d 1294 (Fed. Cir. 2006).36

The court addressed the issue as follows: Since Underwater Devices, we have recognized the practical concerns stemming from our willfulness doctrine, particularly as related to the attorney-client privilege and work product doctrine. For instance, Quantum Corp. v. Tandon Corp., 940 F.2d 642, 643 (Fed. Cir. 1991), observed that “[p]roper resolution of the dilemma of an accused infringer who must choose between the lawful assertion of the attorney-client privilege and avoidance of a willfulness finding if infringement is found, is of great importance not only to the parties but to the fundamental values sought to be preserved by the attorney-client privilege.” We cautioned there that an accused infringer “should not, without the trial court’s careful consideration, be forced to choose between waiving the privilege in order to protect itself from a willfulness finding, in which case it may risk prejudicing itself on the question of liability, and maintaining the privilege, in which case it may risk being found to be a willful infringer if liability is found.” Id. at 643–44. We advised that in camera review and bifurcating trials in appropriate cases would alleviate these concerns. Id. However, such procedures are often considered too onerous to be regularly employed. . . . [I]n Echostar we addressed the scope of waiver resulting from the advice of counsel defense. First, we concluded that relying on in-house counsel’s advice to refute a charge of willfulness triggers waiver of the attorney-client privilege. Echostar, 448 F.3d at 1299. Second, we held that asserting the advice of counsel defense waives . . . the attorney-client privilege for all communications on the same subject matter. . . . Id. at 1299, 1302–03. . . . Echostar did not consider waiver of the advice of counsel defense as it relates to trial counsel. In this case, we confront the willfulness scheme and its functional relationship to the attorney-client privilege. . . . In light of Supreme Court opinions since Underwater Devices and the practical concerns facing litigants under the current regime, we take this opportunity to revisit our willfulness doctrine and to address whether waiver resulting from advice of counsel . . . defenses extend to trial counsel. See Knorr-Bremse, 383 F.3d at 1343–44.37

36. Id. at 1367. 37. Id. at 1369–70.


In specifically addressing whether the waiver of attorney-client privilege to opinion counsel extends to separate trial counsel, the Federal Circuit held as follows: We turn now to the appropriate scope of waiver of the attorney-client privilege resulting from an advice of counsel defense asserted in response to a charge of willful infringement. Recognizing that it is “the oldest of the privileges for confidential communications known to the common law,” we are guided by its purpose “to encourage full and frank communication between attorneys and their clients and thereby promote broader public interests in the observance of law and administration of justice.” Upjohn Co. v. United States, 449 U.S. 383, 389, 101 S. Ct. 677, 66 L. Ed. 2d 584 (1981). The privilege also “recognizes that sound legal advice or advocacy serves public ends and that such advice or advocacy depends upon the lawyer’s being fully informed by the client.” Id. The attorney-client privilege belongs to the client, who alone may waive it. E.g., Knorr-Bremse, 383 F.3d at 1345; Am. Standard, Inc. v. Pfizer, Inc., 828 F.2d 734, 745 (Fed. Cir. 1987). “The widely applied standard for determining the scope of a waiver . . . is that the waiver applies to all other communications relating to the same subject matter.” Fort James Corp. v Solo Cup Corp., 412 F.3d 1340, 1349 (Fed. Cir. 2005). This broad scope is grounded in principles of fairness and serves to prevent a party from simultaneously using the privilege as both a sword and a shield; that is, it prevents the inequitable result of a party disclosing favorable communications while asserting the privilege as to less favorable ones. Echostar, 448 F.3d at 1301; Fort James, 412 F.3d at 1349. Ultimately, however, “[t]here is no bright line test for determining what constitutes the subject matter of a waiver, rather courts weigh the circumstances of the disclosure, the nature of the legal advice sought and the prejudice to the parties of permitting or prohibiting further disclosures.” Fort James, 412 F.3d at 1349–50.38

The court further reasoned: Moreover, the interests weighing against extending waiver to trial counsel are compelling. The Supreme Court recognized the need to protect trial counsel’s thoughts in Hickman v. Taylor, 329 U.S. 495, 510–11, 67 S. Ct. 385, 91 L. Ed. 451 (1947): [I]t is essential that a lawyer work with a certain degree of privacy, free from unnecessary intrusion by opposing parties and their counsel. Proper preparation of a client’s case demands that he assemble information, sift what he considers to be the relevant from the irrelevant facts, prepare his legal theories and plan his strategy without undue and

38. Id. at 1372.

Attorney-Client Privilege and Reliance on Opinions of Noninfringement 867 needless interference. That is the historical and the necessary way in which lawyers act within the framework of our system of jurisprudence to promote justice and to protect their clients’ interests. The Court saw that allowing discovery of an attorney’s thoughts would result in “[i]nefficiency, unfairness and sharp practices,” that “[t]he effect on the legal profession would be demoralizing” and thus “the interests of the clients and the cause of justice would be poorly served.” Id. at 511. Although Hickman concerned work product protection, the attorney-client privilege maintained with trial counsel raises the same concerns in patent litigation. In most cases, the demands of our adversarial system of justice will far outweigh any benefits of extending waiver to trial counsel. See Jaffee v. Redmond, 518 U.S. 1, 9, 116 S. Ct. 1923, 135 L. Ed. 2d 337 (1996) (“Exceptions from the general rule disfavoring testimonial privileges may be justified, however, by a ‘public good transcending the normally predominant principle of utilizing all rational means for ascertaining the truth.’ ” (quoting Trammel, 445 U.S. 40, 50, 100 S. Ct. 906, 63 L. Ed. 2d 186 (1980) (quoting Elkins v. United States, 364 U.S. 206, 80 S. Ct. 1437, 4 L. Ed. 2d 1669 (1960) (Frankfurter, J., dissenting))) (additional internal quotation marks omitted).39

With these considerations in mind, the en banc Seagate court stated: In sum, we hold, as a general proposition, that asserting the advice of counsel defense and disclosing opinions of opinion counsel do not constitute waiver of the attorney-client privilege for communications with trial counsel. We do not purport to set out an absolute rule. Instead, trial courts remain free to exercise their discretion in unique circumstances to extend waiver to trial counsel, such as if a party or counsel engages in chicanery. We believe this view comports with Supreme Court precedent, which has made clear that rules concerning privileges are subject to review and revision, when necessary. See Jaffee, 518 U.S. at 9 (noting that federal courts are “to ‘continue the evolutionary development of testimonial privileges.’“ (quoting Trammel, 445 U.S. at 47)).40

C. Importance of Maintaining Separate Opinion and Trial Counsel The reasoning and holding of In re Seagate that waiver of attorney-client privilege does not extend to trial counsel when an infringer is relying on a noninfringement and/or invalidity opinion as a defense against willfulness only applies when opinion and trial counsel are kept strictly separate. Thus, in order to avoid waiving the attorney-client privilege to trial counsel, a party

39. Id. at 1373. 40. Id. at 1374–75.


should hire separate opinion and trial counsel in situations where a party may need to rely on an opinion of counsel as a defense to willful infringement. Further, interactions between the separate counsel should be kept to a minimum, and the client should not comingle correspondence and other materials from the separate counsel.

V. Work Product Immunity and Reliance on Opinions of Noninfringement and/or Invalidity to Avoid Willful Infringement As with the attorney-client privilege issues discussed above, when an infringer chooses to rely on an opinion of counsel of noninfringement and/or invalidity in a patent infringement suit, issues related to work product immunity and waiver of work product immunity arise. As discussed in Chapter 13, 35 U.S.C. § 284, second paragraph, provides that a court may enhance infringement damages up to threefold in the event the court finds the infringement willful.41 “[T]o establish willful infringement, a patentee must show by clear and convincing evidence that the infringer acted despite an objectively high likelihood that its actions constituted infringement of a valid patent.”42 As evidence against a finding of willful infringement, infringers often rely on opinions of patent counsel that the activity ultimately found by the court to be infringing was, in the objective opinion of the patent counsel, noninfringing activity and/or that the infringed patent was invalid.43 When an infringer relies on such an opinion, the issue of waiver becomes an issue.

41. E.g., Seagate, 497 F.3d at 1360 35 U.S.C.S. § 284, P 2 (2009). 42. Id. at 1371. 43. As discussed in Chapter 13, the law regarding the use of noninfringement and/or invalidity opinions to avoid a finding of willful infringement is undergoing change. The most recent Federal Circuit en banc case on this issue, Seagate, held that there is no affirmative obligation of a potential infringer to obtain an opinion of noninfringement and/or invalidity to avoid a finding of willful infringement. 497 F.3d at 1371. However, Seagate did not hold that opinions of noninfringement and/or invalidity could not be used to counter an assertion of willful infringement. Moreover, at least two Federal Circuit cases following Seagate have held that an infringer’s reliance on an opinion of noninfringement and/or invalidity was sufficient to avoid a finding of willful infringement under Seagate’s objective recklessness standard of willfulness. Finisar Corp. v. DirecTV Group, Inc., 523 F.3d 1323, 1339 (Fed. Cir. 2008); Lexion Med., LLC v. Northgate Techs., Inc., 292 Fed. Appx. 42, 51 (Fed. Cir. 2008) (unpublished). Therefore, it is likely that infringers will continue to rely on opinions of noninfringement and/or invalidity to avoid willful infringement.

Work Product Immunity and Reliance on Opinions of Noninfringement

A. Work Product Waiver Is More Flexible and Less Broad than Waiver of Attorney-Client Privilege Unlike waiver of attorney-client privilege (discussed in Section IV above) in which waiver of even a single document results in a waiver that broadly reaches to all communications related to the issue on which the waiver is based, waiver of work product privilege is more narrowly applied and is more dependent on the facts in a given situation.

B. In re Echostar: Waiver of Work Product Immunity Does Not Extend to Subject Matter Not Communicated to the Client A leading case on waiver of work product protection is In re Echostar.44 In that case, the infringer obtained two opinions of counsel of noninfringement and/ or invalidity of the infringed patent.45 One opinion was by the infringer’s inhouse counsel and was obtained prior to filing of the infringement lawsuit.46 After the action was filed, the infringer obtained a second opinion from a law firm.47 The infringer chose to rely only on the in-house opinion.48 The Federal Circuit ruled that waiver of work product immunity applied to: (a) documents that embody a communication between the attorney and client concerning the subject matter of the case, such as a traditional opinion letter; and (b) documents that discuss a communication between attorney and client concerning the subject matter of the case but are not themselves communications to or from the client. However, work product immunity is not waived as to documents analyzing the law, facts, trial strategy, and so forth that reflect the attorney’s mental impressions but are not given to the client. In making its ruling, the Echostar court began by explaining: The attorney-client privilege and the work-product doctrine, though related, are two distinct concepts and waiver of one does not necessarily waive the other. . . . In contrast to the attorney-client privilege, the work-product doctrine, or work-product immunity as it is also called, can protect “documents and tangible things” prepared in anticipation of litigation that are both non-privileged and relevant. Fed. R. Civ. P. 26(b)(3). Unlike the attorney-client privilege, which

44. 45. 46. 47. 48.

In re EchoStar Communs. Corp., 448 F.3d 1294, 1299 (Fed. Cir. 2006). Id. at 1297. Id. Id. Id.

869

870 Chapter 24 Waiver of Attorney-Client Privilege and Work Product Immunity protects all communication whether written or oral, work-product immunity protects documents and tangible things, such as memorandums, letters, and e-mails. We recognize work-product immunity because it promotes a fair and efficient adversarial system by protecting “the attorney’s thought processes and legal recommendations” from the prying eyes of his or her opponent. Genentech, 122 F.3d at 1415 (citations omitted); accord Hickman v. Taylor, 329 U.S. 495, 511–14, 67 S. Ct. 385, 91 L. Ed. 451 (1947) (“Proper preparation of a client’s case demands that he assemble information, sift what he considers to be the relevant from the irrelevant facts, prepare his legal theories and plan his strategy without undue and needless interference. . . . Were such materials open to opposing counsel on mere demand, much of what is now put down in writing would remain unwritten. . . . Inefficiency, unfairness and sharp practices would inevitably develop in the giving of legal advice and in the preparation of cases for trial. The effect on the legal profession would be demoralizing. And the interests of the clients and the cause of justice would be poorly served.”); Essentially, the work-product doctrine encourages attorneys to write down their thoughts and opinions with the knowledge that their opponents will not rob them of the fruits of their labor. Hickman, 329 U.S. at 511; Id. at 516 (Jackson, J. concurring) (“[A] common law trial is and always should be an adversary proceeding. Discovery was hardly intended to enable a learned profession to perform its functions either without wits or on wits borrowed from the adversary.”); United States v. Adlman, 68 F.3d 1495, 1501 (2d Cir. 1995) (“The purpose of the doctrine is to establish a zone of privacy for strategic litigation planning and to prevent one party from piggybacking on the adversary’s preparation.”); Coastal States, 617 F.2d at 864 (noting that the effect of no immunity would mean “less work-product would be committed to paper, which might harm the quality of trial preparation”). Like the attorney-client privilege, however, the work-product doctrine is not absolute. See In re Martin Marietta Corp., 856 F.2d 619, 626 (4th Cir. 1988). First, a party may discover certain types of work product if they have “substantial need of the materials in the preparation of the party’s case and that the party is unable without undue hardship to obtain the substantial equivalent . . . by other means.” Rule 26(b)(3). This rule, however, only allows discovery of “factual” or “non-opinion” work product and requires a court to “protect against the disclosure of the mental impressions, conclusions, opinions, or legal theories of an attorney or other representative.” Id. Second, a party may discover work product if the party waives its immunity. However, work product waiver is not a broad waiver of all work product related to the same subject matter like the attorney-client privilege. Martin Marietta Corp., 856 F.2d at 626. Instead, work-product waiver only extends to “factual” or “non-opinion” work product concerning the same subject matter as the disclosed work product. See id. at 625 (noting that a party “impliedly waived the work-product privilege as to all non-opinion work-product on the same subject matter as that disclosed.”) (citing Nobles, 422 U.S. at 239).

Work Product Immunity and Reliance on Opinions of Noninfringement We recognize that the line between “factual” work product and “opinion” work product is not always distinct, especially when, as here, an attorney’s opinion may itself be “factual” work product. When faced with the distinction between where that line lies, however, a district court should balance the policies to prevent sword-and-shield litigation tactics with the policy to protect work product.49

Turning to the facts of the case, the court stated: That being said, we recognize at least three categories of work product that are potentially relevant to the advice-of-counsel defense here. They include: (1) documents that embody a communication between the attorney and client concerning the subject matter of the case, such as a traditional opinion letter; (2) documents analyzing the law, facts, trial strategy, and so forth that reflect the attorney’s mental impressions but were not given to the client; and (3) documents that discuss a communication between attorney and client concerning the subject matter of the case but are not themselves communications to or from the client. As to the first category, we already noted in section A that when a party relies on the advice-of-counsel as a defense to willful infringement the party waives its attorney-client privilege for all communications between the attorney and client, including any documentary communications such as opinion letters and memoranda. As to the other two categories, scholars have noted that our prior opinions do not clearly define the scope of the work-product waiver. As a result, the district courts that have addressed this issue are split on just how far to extend that scope. As we discuss in more detail below, we conclude that waiver extends to the third category but does not extend so far as the second.50

In explaining its holding, the court offered the following: By asserting the advice-of-counsel defense to a charge of willful infringement, the accused infringer and his or her attorney do not give their opponent unfettered discretion to rummage through all of their files and pillage all of their litigation strategies. See Thorn EMI, 837 F. Supp. at 621–623 (“Courts generally find a [work-product] waiver only if facts relevant to a particular, narrow subject matter are at issue and have been disclosed under circumstances where it would be unfair to deny the other party an opportunity to discover other facts relevant to that subject matter.”). Work-product waiver extends only so far as to inform the court of the infringer’s state of mind. Counsel’s opinion is not important for its legal correctness. It is important to the inquiry whether it is “thorough enough, as combined with other factors, to instill a belief in the

49. Id. at 1300–2 (some citations omitted). 50. Id. at 1302–3 (some citations omitted, footnotes omitted, emphasis added).

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872 Chapter 24 Waiver of Attorney-Client Privilege and Work Product Immunity infringer that a court might reasonably hold the patent is invalid, not infringed, or unenforceable.” Ortho Pharm. Corp. v. Smith, 959 F.2d 936, 944 (Fed. Cir. 1992). It is what the alleged infringer knew or believed, and by contradistinction not what other items counsel may have prepared but did not communicate to the client, that informs the court of an infringer’s willfulness. The overarching goal of waiver in such a case is to prevent a party from using the advice he received as both a sword, by waiving privilege to favorable advice, and a shield, by asserting privilege to unfavorable advice. See . . . In re Sealed Case, 219 U.S. App. D.C. 195, 676 F.2d 793, 818 (D. C. Cir. 1982) (“When a party seeks greater advantage from its control over work product than the law must provide to maintain a healthy adversary system[,] then the balance of interests recognized in Hickman . . . shifts.”). To the extent the work-product immunity could have such an effect, it is waived. The second category of work product, which is never communicated to the client, is not discoverable. Under Rule 26(b)(3), this so-called “opinion” work product deserves the highest protection from disclosure. See Adlman, 134 F.3d at 1197. While an accused infringer may waive the immunity for work product that embodies an opinion in letters and memorandum communicated to the client, he does not waive the attorney’s own analysis and debate over what advice will be given. Upon waiver of attorney-client privilege, communicative documents, such as opinion letters, become evidence of a non-privileged, relevant fact, namely what was communicated to the client, see Nobles, 422 U.S. at 239 n. 14 (“Where . . . counsel attempts to make a testimonial use of [work-product] materials the normal rules of evidence come into play with respect to . . . production of documents.”); however, counsel’s legal opinions and mental impressions that were not communicated do not acquire such factual characteristics and are, therefore, not within the scope of the waiver. As the Martin Marietta Corp. court noted, there is relatively little danger that a litigant will attempt to use a pure mental impression or legal theory as a sword and as a shield in the trial of a case so as to distort the factfinding process. Thus, the protection of lawyers from the broad repercussions of subject matter waiver in this context strengthens the adversary process, and, unlike the selective disclosure of evidence, may ultimately and ideally further the search for the truth. Thus, if a legal opinion or mental impression was never communicated to the client, then it provides little if any assistance to the court in determining whether the accused knew it was infringing, and any relative value is outweighed by the policies supporting the work-product doctrine. The third category of work product material falls admittedly somewhere interstitially between the first and second. In some instances there may be documents in the attorney’s file that reference and/or describe a communication between the attorney and client, but were not themselves actually communicated to the client. For example, if an attorney writes a memorandum or an e-mail to his associate referencing a phone call with the client, in which he indicates that he discussed the client’s potential infringement, then such a memorandum is discoverable. Unlike work product that was uncommunicated, this work product references a specific communication to the client. Though it is not a communication

Work Product Immunity and Reliance on Opinions of Noninfringement to the client directly nor does it contain a substantive reference to what was communicated, it will aid the parties in determining what communications were made to the client and protect against intentional or unintentional withholding of attorney-client communications from the court. Still, we must emphasize that such communications may contain work product of the second kind—legal analysis that was not communicated. In those situations, the parties should take special care to redact such information, and if necessary the district court may review such material in camera.51

The court concluded: Therefore, when an alleged infringer asserts its advice-of-counsel defense regarding willful infringement of a particular patent, it waives its immunity for any document or opinion that embodies or discusses a communication to or from it concerning whether that patent is valid, enforceable, and infringed by the accused. This waiver of both the attorney-client privilege and the work-product immunity includes not only any letters, memorandum, conversation, or the like between the attorney and his or her client, but also includes, when appropriate, any documents referencing a communication between attorney and client. Here, [the law firm’s] work product that was not communicated to EchoStar or does not reflect a communication is not within the scope of EchoStar’s waiver because it obviously played no part in EchoStar’s belief as to infringement of the ’389 patent. . . . In sum, the advice-of-counsel defense to willfulness requires the court to decide, inter alia, whether counsel’s opinion was thorough enough to “instill a belief in the infringer that a court might reasonably hold the patent is invalid, not infringed, or unenforceable.” If a [law firm] document was not communicated to EchoStar or if [the law firm] document does not reference a communication between [the law firm] and EchoStar, its relevant value is outweighed by the policies of the work-product doctrine. Thus, it was an abuse of discretion for the district court to determine that the scope of the waiver of privilege extended to such documents.52

C. In re Seagate: Work Product Immunity Not Waived for Communications with Trial Counsel Where Trial Counsel Is Separate from Opinion Counsel In In re Seagate, Federal Circuit noted, “[a]n advice of counsel defense asserted to refute a charge of willful infringement may . . . implicate waiver of work

51. Id. at 1303–4 (some citations omitted, emphasis added). 52. Id. at 1304–5 (some citations omitted).

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product protection.”53 However, when opinion counsel and trial counsel are separate, “absent exceptional circumstances,” waiver of work product immunity to opinion counsel caused by relying on an opinion as a defense against willful infringement does not waive work product privilege of trial counsel.54 The work product protection issue of Seagate is similar to the attorneyclient privilege issue in the case discussed in Section IV[B] above in that defendant Seagate, retained counsel to provide opinions as to noninfringement and invalidity of the patents-in-suit.55 However, Seagate’s trial counsel was completely separate from its opinion counsel. As stated by the Federal Circuit, “[t]here is no dispute that Seagate’s opinion counsel operated separately and independently of trial counsel at all times.”56 During the course of the litigation, Seagate notified the plaintiff that it intended to rely on its opinion counsel’s opinions of noninfringement and invalidity in defending against a charge of willful infringement.57 Seagate disclosed to the plaintiff all of its opinion counsel’s work product and made opinion counsel available for deposition.58 In addition to the produced work product of the defendant’s opinion counsel, the plaintiff sought “discovery of . . . work product of Seagate’s trial counsel,” including “production of trial counsel opinions related to infringement, invalidity, and enforceability of the patents, and also noticed depositions of Seagate’s trial counsel.”59 After the trial court denied Seagate’s objections, the Federal Circuit: [S]tayed the discovery orders and, recognizing the functional relationship between our willfulness jurisprudence and the practical dilemmas faced in the areas of attorney-client privilege and work product protection, sua sponte ordered en banc review of the petition. The en banc order set out the following questions: Should a party’s assertion of the advice of counsel defense to willful infringement extend waiver of the attorney-client privilege to communications with that party’s trial counsel? See In re EchoStar Commc’n Corp., 448 F.3d 1294 (Fed. Cir. 2006).60

53. 54. 55. 56. 57. 58. 59. 60.

In re Seagate Tech., LLC, 497 F.3d 1360, 1375 (Fed. Cir. 2007). Id. Id. at 1366. Id. Id. Id. Id. at 1366–67. Id. at 1367.

Work Product Immunity and Reliance on Opinions of Noninfringement

In addressing the issue, the court stated: Since Underwater Devices, we have recognized the practical concerns stemming from our willfulness doctrine, particularly as related to the attorney-client privilege and work product doctrine. . . . In this case, we confront the willfulness scheme and its functional relationship to the attorney-client privilege and work product protection. In light of Supreme Court opinions since Underwater Devices and the practical concerns facing litigants under the current regime, we take this opportunity to revisit our willfulness doctrine and to address whether waiver resulting from advice of counsel and work product defenses extend to trial counsel. See Knorr-Bremse, 383 F.3d at 1343–44.61

In specifically addressing whether the waiver of work product protection to opinion counsel extends to separate trial counsel, the Federal Circuit first explained: The work product doctrine is “designed to balance the needs of the adversary system: promotion of an attorney’s preparation in representing a client versus society’s general interest in revealing all true and material facts to the resolution of a dispute.” Unlike the attorney-client privilege, which provides absolute protection from disclosure, work product protection is qualified and may be overcome by need and undue hardship. Fed. R. Civ. Pro. 26(b)(3). . . . Like the attorney-client privilege, however, work product protection may be waived. Here, the same rationale generally limiting waiver of the attorney-client privilege with trial counsel applies with even greater force to so limiting work product waiver because of the nature of the work product doctrine. Protecting lawyers from broad subject matter of work product disclosure “strengthens the adversary process, and . . . may ultimately and ideally further the search for the truth.” Martin Marietta, 856 F.2d at 626; accord Echostar. In addition, trial counsel’s mental processes, which fall within [plaintiff ’s] discovery requests, enjoy the utmost protection from disclosure; a scope of waiver commensurate with the nature of such heightened protection is appropriate.62

The Seagate court then held that, as with the attorney-client privilege discussed in Section IV[B] above: [A]s a general proposition, relying on opinion counsel’s work product does not waive work product immunity with respect to trial counsel. Again, we leave open the possibility that situations may arise in which waiver may be extended

61. Id. at 1369–70. 62. Id. at 1375–76 (some citations omitted).

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876 Chapter 24 Waiver of Attorney-Client Privilege and Work Product Immunity to trial counsel, such as if a party or his counsel engages in chicanery. And, of course, the general principles of work product protection remain in force, so that a party may obtain discovery of work product absent waiver upon a sufficient showing of need and hardship, bearing in mind that a higher burden must be met to obtain that pertaining to mental processes. See Fed. R. Civ. Pro. 26(b)(3).63

D. Importance of Maintaining Separate Opinion and Trial Counsel The reasoning and holding of In re Seagate that waiver of work product protection does not extend to trial counsel when an infringer is relying on a noninfringement and/or invalidity opinion as a defense against willfulness only applies when opinion and trial counsel are kept strictly separate. Thus, in situations where a party may need to rely on an opinion of counsel as a defense to willful infringement, the party should hire separate opinion and trial counsel to avoid waiving the work product protection as to trial counsel. Further, interactions between the separate counsel should be kept to a minimum, and the client should not comingle correspondence and other materials from the separate counsel.

VI. Waiver of Attorney-Client Privilege and Work Product Immunity of Opinions of Counsel in Due Diligence Due diligence investigations involving patent rights commonly raise issues concerning waiver of attorney-client privilege and work product immunity. Unfortunately, the law regarding waiver in these situations is varied and illdefined. Therefore, unintentional waiver of attorney-client privilege and work product immunity can occur in due diligence investigations involving patent rights. Perhaps the most common type of due diligence investigation involving patent rights is when one company (the acquiring company) is investigating the purchase of some or all or another company’s (the target company) patent rights (see Chapters 11 and 19). In such cases, the target company may have opinions of counsel regarding patents, such as patentability opinions and opinions of noninfringement and/or invalidity of third party patents. These opinions are generally privileged as to the target company provided

63. Id.

Waiver of Attorney-Client Privilege and Work Product Immunity

it has kept them confidential and not otherwise waived its privileges to these opinions. During the due diligence process, it is common for the acquiring company to ask to review the patent opinions of the target company. However, for the reasons discussed below, if the target company complies and shares its confidential patent opinions with the acquiring company, this may cause a waiver of the attorney-client privilege and work product immunity by the target company regarding the shared opinions.

A. Overview: Exercise Due Care with Attorney-Client Privilege and Work Product Immunity in Due Diligence Ideally, a target company in a due diligence investigation should never share its attorney-client privileged and work product protected materials with any third party, including the acquiring party. This should be the case regardless of whether there is a confidentiality agreement, an apparent “common interest,” and/or a joint defense agreement in place between the acquiring and target companies. However, due diligence investigations are often performed under lessthan-ideal conditions. Again, to safely retain the attorney-client privilege and work product protections of opinions (such as freedom to operate opinions for the technology of the target company), each company should obtain entirely separate evaluations and opinions from entirely separate counsel. Moreover, these opinions should never be shared between the companies, at least prior to consummation of a compete merger or acquisition. Yet, real world pressures such as constraints of time and money often place pressure on the target company to disclose to the acquiring company attorneyclient privileged and work product-protected materials, such as freedom to operate opinions of the target company. In these instances, there is always an unavoidable risk that disclosure of attorney-client privileged and work product protected materials between parties in due diligence may waive these privileges and protections. Although this risk can never be entirely eliminated, steps can be taken by the parties to the due diligence to improve the odds of maintaining these privileges (e.g., by making sure that all disclosures are confidential and limited, and complying with the requirements of establishing a common interest between the due diligence parties, such as by executing a joint defense agreement). These steps are discussed in detail below.

B. Choice of Law for Waiver in Patent Due Diligence As with all of the law discussed below regarding waiver of attorney-client privilege and work product immunity via disclosure of privileged and/or

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protected materials to third parties in due diligence investigations, the choice of law that applies in patent cases is complex. The Federal Circuit holds that: “For procedural matters that are not unique to patent issues, we apply the perceived law of the regional circuit.”64 “‘Federal Circuit law applies when deciding whether particular written or other materials are discoverable in a patent case,’ at least if that issue clearly implicates substantive patent law.”65 However, the Federal Circuit has been less than clear on instructing exactly when Federal Circuit law or regional circuit law applies in patent cases. For example, the court has indicated: [W]e apply the law of the circuit in which the district court sits with respect to nonpatent issues, but we apply our own law to issues of substantive patent law. See Institut Pasteur v. Cambridge Biotech Corp. (In re Cambridge Biotech Corp.), 186 F.3d 1356, 1358, 51 U.S.P.Q.2D (BNA) 1321, 1329 (Fed. Cir. 1999). Furthermore, we have held that “a procedural issue that is not itself a substantive patent law issue is nonetheless governed by Federal Circuit law if the issue pertains to patent law, if it bears an essential relationship to matters committed to our exclusive [jurisdiction] by statute, or if it clearly implicates the jurisprudential responsibilities of this court in a field within its exclusive jurisdiction.” Midwest Indus., Inc. v. Karavan, 175 F.3d 1356, 1359, 50 U.S.P.Q.2D (BNA) 1672, 1675 (Fed. Cir. 1999) (en banc in relevant part) (internal citations and quotation marks omitted). Applying these standards, we have held, for example, that Federal Circuit law applies when deciding whether particular written or other materials are discoverable in a patent case, because they relate to an issue of substantive patent law. See id. (citing Truswal Sys. Corp. v. Hydro-Air Eng’g, Inc., 813 F.2d 1207, 1212, 2 U.S.P.Q.2D (BNA) 1034, 1038 (Fed. Cir. 1987) (“[A] determination of relevance implicates the substantive law of patent validity and infringement. Hence, we look to Federal Circuit law.”)). Similarly, in the present case, a determination of the applicability of the attorney-client privilege to Spalding’s invention record clearly implicates, at the very least, the substantive patent issue of inequitable conduct. We therefore apply Federal Circuit law in determining whether the attorney-client privilege applies.66

On the other hand, the Federal Circuit has held: In In re Regents of the University of California, 101 F.3d 1386, 40 U.S.P.Q.2D (BNA) 1784 (Fed. Cir. 1996) (hereinafter “UC Regents”), this court granted a writ of mandamus after concluding that, under Seventh Circuit law, communications

64. In re Pioneer Hi-Bred Int’l, Inc., 238 F.3d 1370, 1374 (Fed. Cir. 2001). 65. Id. 66. In re Spalding Sports Worldwide, Inc., 203 F.3d 800, 803–4 (Fed. Cir. 2000).

Waiver of Attorney-Client Privilege and Work Product Immunity between a licensor and the attorneys of its licensee were protected by the attorneyclient privilege. We applied the law of the regional circuit because the issue in that case, whether a licensor and a licensee are joint clients for purposes of privilege under the community of interest doctrine, was not unique to patent law. See id. at 1390 n.2, 40 U.S.P.Q.2D (BNA) at 1787 n.2 (“For procedural matters that are not unique to patent issues, we apply the perceived law of the regional circuit.”). That issue concerned parties to a contract; any patent involved was irrelevant to the question of privilege. However, the issue in the present case, whether the invention record is protected by the attorney-client privilege, is unique to patent law because the invention record relates to an invention submitted for consideration for possible patent protection; it clearly implicates substantive patent law. We thus conclude that the court’s choice of law in the UC Regents case is inapplicable here.67

Therefore, while it remains rather unclear as to exactly when the Federal Circuit will apply its own law, at least “for purposes of [determining] privilege under the community of interest doctrine” (which is addressed in detail in Section VI[E] below), the Federal Circuit applies the law of the regional circuit.

C. Disclosure of a Privileged Opinion to a Third Party May Result in Waiver of the Attorney-Client Privilege and Work Product Immunity of the Opinion As a rule, whether under regional circuit or Federal Circuit law, disclosure by the privilege holder of a privileged opinion to a third party may result in waiver of the attorney-client privilege and work product immunity associated with that opinion. As stated by the Federal Circuit, “a waiver occurs . . . when a party . . . discloses advice of counsel or other privileged information in connection with the merger.”68

The Third Circuit indicates: Accordingly, voluntary disclosure to a third party of purportedly privileged communications has long been considered inconsistent with an assertion of the privilege. United States v AT&T, 206 App. D.C. 317, 642 F.2d 1285, 1299 (D.C. Cir 1980). As one commentator cogently explained: If clients themselves divulge

67. Id. at 804. 68. Pioneer Hi-Bred, 238 F.3d at 1374.

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880 Chapter 24 Waiver of Attorney-Client Privilege and Work Product Immunity such information to third parties, chances are that they would also have divulged it to their attorneys, even without the protection of the privilege. Thus, once a client has revealed privileged information to a third party, the basic justification for the privilege no longer applies . . . Comment, Stuffing the Rabbit Back into the Hat: Limited Waiver of the Attorney-Client Privilege in an Administrative Agency Investigation, 130 U Pa L Rev 1198, 1207 (1982). Consequently, it is well-settled that when a client voluntarily discloses privileged communications to a third party, the privilege is waived. See Rockwell, 897 F.2d at 1265. See also 8 Wright & Miller, § 2016 at 127 and n71; id, § 2024 at 210 (citing cases).69

To make matters even more complicated, as is apparent from the cases discussed in the sections below, in the event that a court determines that regional circuit law applies to waiver of attorney-client privilege and work product protection, there is substantial variability among circuits as to how flexible courts may be in finding waiver of privilege in the context of third party disclosures, such as may occur in due diligence investigations.70 Thus, the venue in which a privilege issue is tried may potentially affect the court’s decision on waiver.

D. Disclosure of a Privileged Opinion to a Third Party May Waive All Privileges Associated with the Opinion, Even if the Disclosure Is Confidential and Under a Confidentiality Agreement In another area of uncertainty, the law is not entirely clear on the role that confidentiality plays in whether disclosure of attorney-client privileged and work product protected materials to a third party results in waiver. For example, in Westinghouse, the Third Circuit held that a waiver of privilege occurred regardless of the fact that a disclosure to a third party was confidential and under a confidentiality agreement, and the D.C. Circuit made a similar holding in Periman Corp. v. United States.71 In Westinghouse, the Third Circuit held: Westinghouse further contends, however, that the SEC’s regulations concerning confidentiality and the stipulated court order memorializing the confidentiality agreement between Westinghouse and the DOJ must be regarded as preserving

69. Westinghouse Elec. Corp. v. Republic of Phil., 951 F.2d 1414, 1424 (3d Cir. 1991) (emphasis added). 70. E.g., as shown in the cases discussed below, in the context of waiver and the common interest doctrine, the Northern District of California has a more expansive view of privilege, whereas the Northern District of Ohio has a more restrictive one. 71. Periman Corp. v. United States, 665 F.2d 1214, 1221 (D.C. Cir. 1981).

Waiver of Attorney-Client Privilege and Work Product Immunity the attorney-client privilege with respect to the information disclosed because of Westinghouse’s expectations of confidentiality engendered thereby. We reject Westinghouse’s argument that it did not waive the privilege because it reasonably expected that the SEC and the DOJ would maintain the confidentiality of the information that it disclosed to them. Even though the DOJ apparently agreed not to disclose the information, under traditional waiver doctrine a voluntary disclosure to a third party waives the attorney-client privilege even if the third party agrees not to disclose the communications to anyone else. See, for example, Rockwell, 897 F.2d at 1265 (“The attorney-client privilege does not apply to communications that are intended to be disclosed to third parties or that in fact are so disclosed.”) (emphasis added). See also 8 Wigmore, Evidence § 2327 at 636; Note, 36 Stan L Rev at 792.72

On the other hand, in Hewlett-Packard Co. v. Bausch & Lomb, the Northern District of California held that, although it was a “close question”73 and “a close case,”74 disclosure of a privileged letter to a third party did not result in waiver in part because the “defendant did everything within its power to impress upon [the third party] the importance of maintaining the confidentiality of the letter and [the third party], in turn, seems to have undertaken to hold the letter in confidence.”75 Additionally, in Tenneco, the Northern District of Illinois held that disclosure of a noninfringement opinion by a target company to an acquiring company during a due diligence investigation did not result in waiver of the privileges associated with the disclosed opinion, in part because: [The acquiring company] took substantial steps to ensure that the opinion would remain confidential. According to [the acquiring company], “access to the opinion was controlled by specific procedures designed to prevent dissemination of its contents”; [the target company] showed the opinion to a limited number of [the acquiring company] representatives, and then only after they acknowledged that disclosure was subject to a confidentiality agreement. Thus, the opinion is privileged and need not be produced.76

Therefore, the best practice is to avoid disclosing privileged and work product-protected materials to third parties. However, if this is not possible (e.g., because of financial and/or monetary constraints in due diligence), any such disclosures should be made under a confidentiality agreement between

72. 73. 74. 75. 76.

Westinghouse, 951 F.2d at 1427 (footnote omitted, emphasis added). Hewlett-Packard Co. v. Bausch & Lomb, Inc., 115 F.R.D. 308, 309 (N.D. Cal. 1987). Id. at 312. Id. at 311. Tenneco Packaging Specialty & Consumer Prods., Inc. v. S.C. Johnson & Son, Inc., 1999 U.S. Dist. LEXIS 15433, *8 (N.D. Ill. 1999).

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the disclosing and receiving parties. Although this will not ensure that a court will hold that a waiver of attorney-client privilege and work product immunity has not occurred, it is at least a step in the right direction.

E. The Common Interest Doctrine The common interest doctrine is frequently used as a basis for arguing against waiver of privilege that might otherwise result from a target company in due diligence disclosing privileged material to an acquiring company. However, as with all of the legal issues in this area, “[t]he legal boundaries which define the scope of the ‘common interest’ rule are by no means well defined.”77 Therefore, the best practice is always to avoid any third party disclosures in due diligence. However, where this is not possible, some district courts have found that the common interest doctrine can prevent waiver of attorney-client privilege and work product immunity when certain conditions are met. First, it is important to understand that the common interest doctrine is not itself a privilege. Rather, it is an extension of an existing attorney-client and/or work product privilege. As explained by the court in Katz: The common interest doctrine is an exception to the general rule that the attorney-client privilege is waived upon disclosure of privileged information with a third party. See, e.g., In re Regents of the Univ of Cal., 101 F.3d 1386, 1389 (Fed. Cir. 1996); Giovan v. St. Thomas Diving Club Inc., 37 V.I. 176, 1997 U.S. Dist. LEXIS 8816, 1997 WL 360867, at *4 (Terr. V.I. June 16, 1997); Thompson v. Glenmede Trust Co., 1995 U.S. Dist. LEXIS 18780, 1995 WL 752443, at *4 (E.D. Pa. Dec. 19, 1995); Hewlett-Packard Co. v. Bausch & Lomb, Inc., 115 F.R.D. 308, 309–10 (N.D. Cal. 1987). The common interest doctrine does not create an independent privilege, but depends upon a proper showing of the other elements of the attorney-client privilege. n. 3 See Allendale Mut. Ins. v. Bull Data Sys., 152 F.R.D. 132, 140 (N.D. Ill. 1993). n. 3 In order to establish that communications are protected by the attorneyclient privilege, the following elements must be present: (1) the asserted holder of the privilege is or sought to become a client; (2) the person to whom the communication was made (a) is a member of the bar of a court, or his or her subordinate, and (b) in connection with this communication is acting as a lawyer; (3) the communication relates to a fact of which the attorney was informed (a) by his client (b) without the presence of strangers (c) for the purpose of securing primarily either (i) an opinion of law or (ii) legal services or (iii) assistance in some legal proceeding, and (d) not for the purpose of committing a crime or tort;

77. GTE Directories Service, Corp. v. Pacific Bell Directory, 135 F.R.D. 187, 191 (N.D. Cal. 1991) (emphasis added).

Waiver of Attorney-Client Privilege and Work Product Immunity and (4) the privilege has been (a) claimed and (b) not waived by the client. Rhone-Poulenc Rorer v. Home Indem. Co., 32 F.3d 851, 862 (3d Cir. 1994). Pursuant to the common interest doctrine (or community of interest doctrine), “parties with shared interest in actual or potential litigation against a common adversary may share privileged information without waiving their right to assert the privilege.” Thompson, 1995 WL 752443, at *4. The nature of the interest, however, must be “identical, not similar, and be legal, not solely commercial.” In re Regents, 101 F.3d at 1390; see also Hewlett-Packard, 115 F.R.D. at 309 (citing Union Carbide v. Dow Chemical, 619 F. Supp. 1036, 1047 (D. Del. 1985)).78

Second, it is important to understand that because the common interest doctrine is an extension of privilege, the underlying scope of privilege law of the jurisdiction in which the privilege is being asserted is an important factor in how a court will define a “common interest,” and whether a court will recognize the extension—or find waiver. For example, many of the district court cases79 that have recognized the common interest doctrine (including in the context of patent due diligence) have been by courts located in jurisdictions with an “expansive view” of privilege. These courts have defined the “common interest” in a manner that allows for a finding of privilege in furtherance of the jurisdiction’s “expansive view” of privilege.80 On the other hand, many of the district courts that have failed to recognize the common interest doctrine (including in patent due diligence) and have found waiver of privilege have been located in jurisdictions with a “restrictive view” of privilege. These courts have defined the “common interest” in a manner that allows for a finding of waiver of privilege in furtherance of the jurisdiction’s “restrictive view” of privilege.81 For example, in taking an “expansive view” of privilege and, therefore, finding common interest protection of privilege in patent due diligence, the Hewlett-Packard court ruled as follows: The issue in this discovery dispute is whether defendant Bausch & Lomb waived its rights under the attorney-client privilege and/or the work product doctrine when it voluntarily disclosed its attorney’s opinion letter to a non-party with whom it was attempting to negotiate the sale of a business. The letter concerned

78. Katz v. AT& T Corp., 191 F.R.D. 433, 436–37 (E.D. Pa. 2000) (emphasis added). 79. There are virtually no appellate court cases on this issue. 80. E.g., Hewlett-Packard, 115 F.R.D. at 308 (N.D. Cal. 1987); Britesmile, Inc. v. Discus Dental, Inc., 2004 U.S. Dist. LEXIS 20023 (N.D. Cal. 2004); Johnson Elec. N. Am. Inc. v. Mabuchi N. Am. Corp., 1996 U.S. Dist. LEXIS 5227 (S.D.N.Y. 1996). 81. E.g., Libbey Glass, Inc. v. Oneida Ltd., 197 F.R.D. 342 (N.D.OH 1999); Corning Inc. v. SRU Biosystems, LLC, 223 F.R.D. 189 (D. Del. 2004).

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884 Chapter 24 Waiver of Attorney-Client Privilege and Work Product Immunity the validity and possible infringement of plaintiff Hewlett-Packard’s LaBarre patent. This patent is in issue in the present litigation. Defendant disclosed the letter to non-party GEC at a time when defendant and GEC were involved in discussions concerning the sale of defendant’s Houston Instruments Division. This division manufactured the plotter that prompted defendant’s concern over the LaBarre patent. Plaintiff now asserts that defendant’s disclosure of the letter to a third party constituted a waiver of the attorney-client privilege. Defendant asserts that it reasonably anticipated litigation with plaintiff over the LaBarre patent and that, therefore, it had a legal duty to so advise prospective purchasers of Houston Instruments. The court agrees that defendant had a duty to disclose to GEC at least the fact that there was a real possibility that if GEC purchased Houston Instruments plaintiff would sue them over the right to manufacture the plotter. . . . At this juncture the court is persuaded that defendant’s disclosure of the opinion letter regarding the LaBarre patent should not constitute a waiver of the attorney-client privilege. This is a close question, on both sides of which there are substantial competing interests. For the reasons set forth below, however, the court concludes that the interests that would be harmed by finding waiver in these circumstances outweigh the interests that would be advanced by such a finding .... This court . . . is concerned about the effect that finding waiver too freely might have on the sort of business transaction in which defendant and GEC were involved. Holding that this kind of disclosure constitutes a waiver could make it appreciably more difficult to negotiate sales of businesses and products that arguably involve interests protected by laws relating to intellectual property. Unless it serves some significant interest courts should not create procedural doctrine that restricts communication between buyers and sellers, erects barriers to business deals, and increases the risk that prospective buyers will not have access to important information that could play key roles in assessing the value of the business or product they are considering buying. Legal doctrine that impedes frank communication between buyers and sellers also sets the stage for more lawsuits, as buyers are more likely to be unpleasantly surprised by what they receive. By refusing to find waiver in these settings courts create an environment in which businesses can share more freely information that is relevant to their transactions. This policy lubricates business deals and encourages more openness in transactions of this nature. Another factor weighing against the finding of waiver in cases such as this is the tendency of some lawyers, especially in intellectual property cases, to spend an inordinate amount of time attempting to gain an advantage in the litigation by making use of the adversary attorney’s words and opinions. In patent cases the primary focus should be on the real world, on the similarity of the products involved in the dispute and on the history of relevant inventions and commercial conduct. Preoccupation with efforts to paint opposing counsel into some

Waiver of Attorney-Client Privilege and Work Product Immunity semantic corner or to take advantage of his choice of terms leads to costly, unproductive, and unseemly disputes. The court is persuaded that in a close case such as this the policy concerns outlined above dictate that the attorney-client privilege should be protected and waiver should not be found.82

In contrast under not very different facts, but with the court taking a “restrictive view” of privilege under which it found no common interest protection, and hence waiver of privilege in patent due diligence, the Libbey Glass court ruled: The first issue raised by the pending discovery disputes involves Libbey’s claim that Oneida has waived its attorney-client privilege with regard to the substance of the advice given to Oneida by its attorneys about the legal consequences of Oneida’s purchase of glassware from Pasabahce. . . . Libbey[] claim[s] that Oneida has waived its attorney-client privilege is that Oneida’s employees shared privileged communications with Ullmann and Pasabahce. . . . Voluntary disclosure of an attorney’s advice to a third party ordinarily results in waiver of the attorney-client privilege. Grand Jury Proceedings, 78 F.3d at 255. To overcome this general rule, Oneida argues that no waiver occurred because it, Pasabahce, and Ullmann had a common interest in the legal implications of the agreements that they were negotiating at the time of the disclosure. To encourage sharing of information when such disclosure enhances, rather than undercuts, the policies underlying the attorney-client privilege, the law in some limited circumstances allows communications to remain privileged even after disclosure to third parties. These circumstances include: . . . “common interest” relationships . . . The “common interest” arrangement permits the disclosure of a privileged communication without waiving the privilege, provided the parties have “an identical legal interest with respect to the subject matter of the communication.” Duplan Corp. v. Deering Milliken, 397 F. Supp. 1146, 1164 (D.S.C. 1974). In theory, the common interest doctrine encourages parties working with a common purpose to benefit from the guidance of counsel, and thus avoid pitfalls that otherwise might impair their progress toward their shared objective. Two lines of cases reflect differing views about the common interest arrangement. The more expansive view is expressed in Hewlett-Packard v. Bausch & Lomb, 115 F.R.D. 308, 309–11 (N.D. Cal. 1987). In that case, the court held that no waiver of the attorney-client privilege occurred when a patent owner, who was seeking to sell one of its divisions, disclosed its patent attorney’s opinion letter to the prospective purchaser. Id. at 312.

82. Hewlett-Packard, 115 F.R.D. at 308–12 (emphasis added).

885

886 Chapter 24 Waiver of Attorney-Client Privilege and Work Product Immunity The narrower view of the common interest doctrine, as expressed in Bank Brussels Lambert v. Credit Lyonnais, 160 F.R.D. 437, 447 (S.D.N.Y. 1995) (emphasis supplied), is that confidential communications can be shared only if both parties have more than “merely concurrent legal interests.” Instead, the parties must have “a common legal, as opposed to commercial, interest.” Id. at 447 (emphasis supplied). Thus, the parties must show that the disclosures are made in the course of “formulating a common legal strategy.” Id. (emphasis supplied). Under this approach, communications shared during a business undertaking lose their privileged status, even though such sharing helped address or ameliorate bona fide concerns about the legal implications of some aspect of the business venture. As stated in Bank Brussels, “the common interest doctrine does not encompass a joint business strategy which happens to include as one of its elements a concern about litigation.” Id. Accord Walsh v. Northrop Grumman Corp., 165 F.R.D. 16, 19 (E.D.N.Y. 1996) (nothing that a “concern about litigation . . . does not transform [the parties’] common interest and enterprise into a legal, as opposed to commercial matter”); Oak Industries v. Zenith Industries, 1988 U.S. Dist. LEXIS 7985, No. 86 C4302, 1988 WL 79614 at *4 (N.D. Ill July 27, 1988) (declining “to expand the coverage of the attorney-client privilege to information which a party freely shares with other business persons”); SCM Corp. v. Xerox Corp., 70 F.R.D. 508, 512 (D. Conn. 1976) (finding no common interest where disclosures were part of adversary business negotiations rather than the advancement of a “joint interest vis-a-vis the rest of the world”) Before choosing one approach to the “common interest” exception over another, consideration should be given to some practical aspects of disclosures sought to be protected due to the common interest of the parties. Sharing of legal advice may well increase the usefulness of that advice. But that does not necessarily mean that the policy of favoring consultation with counsel has been implemented. Where, as here, only Oneida involved an attorney directly, Pasabahce can hardly have been said to have “consulted” with counsel, or obtained the benefit of advice from a lawyer responsible to it alone. Because, in this instance, only one participant used the services of counsel, the policy of gaining prior legal advice was only partially fulfilled. In addition, no steps appear to have been taken by Oneida’s lawyers and its employees, or Ullmann or Pasabahce, to ensure that the privileged communications, though shared, would remain confidential. There is no indication that either Ullmann or Pasabahce (or, for that matter, Oneida’s own employees) understood the need to guard attentively against further disclosure if the privilege were be retained. By refusing to extend the common interest privilege to situations where no efforts were taken to acknowledge and protect the privileged status of the shared communications, courts make privilege law more predictable. In an area as presently uncertain as this, disputes of the sort now before me would not arise if all parties were required either to involve their own lawyers, or to take some other deliberate and meaningful steps to protect the confidential nature of the

Waiver of Attorney-Client Privilege and Work Product Immunity communications. By disallowing claims of common interest absent clear indication that the parties sought actively to keep the communications confidential, courts can create a benchmark for parties with common legal interests to enjoy the benefits of shared legal advice. Clients must understand that legal information is like other types of proprietary information. Any sharing risks waiver of the privilege, and should occur under only certain specified conditions. Those conditions ensure that the information will not be disclosed beyond its use to serve the common legal interest. A court should not base its determination of whether the common interest doctrine is applicable on whether or not such further disclosure occurred. To do so would lead to protracted litigation. The burden belongs on the party claiming privilege to have avoided uncertainty, and to have taken effective steps to ensure that all participants were aware of the need to maintain confidentiality, and to show that mechanisms were in place to accomplish that objective before the information was shared. The restrictive approach of Bank Brussels accommodates the objective of continued confidentiality more effectively than the expansive, unrestricted approach of Hewlett Packard. By limiting the opportunity to claim the common interest privilege, courts encourage parties to take effective steps in advance to acknowledge the privilege and implement the policies it fosters. This approach lends greater predictability to the law and implements the requirement of construing the attorney-client privilege narrowly. Grand Jury Proceedings, 78 F.3d at 254. Here the parties took no steps to safeguard the privilege. On that basis alone, I find it to have been waived. In any event, even if steps had been taken to avoid further disclosure, I find in the alternative that the communications were ancillary to the principal activity in which Oneida, Ullmann, and Pasabahce were engaged: namely, the negotiation of an agreement for Pasabahce to make and for Oneida to buy and distribute glassware to complete with Libbey. All parties apprehended that their venture involved some legal risk, but that apprehension was merely a part of their larger endeavor. Responding to those concerns on the part of the other parties, Oneida sought commercial gain, not legal advantage, through disclosure of its lawyer’s advice to Ullmann and Pasabahce. The parties were formulating not a “common legal” strategy, but a joint commercial venture. Bank Brussels at 447. Oneida’s claim of privilege as to legal materials shared with either Ullmann or Pasabahce is, accordingly, without merit.83

Therefore, as can be seen from the above, cases with similar facts can have different outcomes depending on the jurisdiction in which the waiver issue is tried. Again, this argues strongly that the best practice of a target company

83. Libbey Glass, 197 F.R.D. at 345–49 (emphasis added).

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is not disclosing any attorney-client privileged or work product immunity protected information to an acquiring company during due diligence.

F. Other Considerations When Disclosing Privileged Materials to Third Parties During Due Diligence Ideally in due diligence investigations, a target company should not disclose any attorney-client privileged and/or work product protected information to an acquiring company that the parties wish to remain protected by privilege. However, in the realities of actual due diligence investigations, target companies often face great pressure from acquiring companies to disclose their privileged materials to the acquiring companies. This is often due to time and/or financial constraints on the acquiring company that make if difficult (if not impossible) for the acquiring company to obtain its own independent opinions on the privileged materials. The following sets forth suggestions for steps that can be taken to attempt to retain privilege and immunity on materials that are disclosed to third parties during due diligence. It cannot be overstressed, however, that the only way to guarantee that privileged and immune materials remain privileged and immune is for the party having the materials to never disclose them to a third party. This is the case even if there is a confidentiality agreement in place, the facts appear to fit a common interest situation, and/or there is a joint defense agreement between the parties. 1. Confidentiality Agreement Any due diligence investigation should have a joint confidentiality agreement in place between all parties before any confidential information is disclosed. This is particularly important if attorney-client privileged and/or work product-protected materials are to be disclosed. Disclosure of privileged materials to a third party (such as by a target company to an acquiring company) in the absence of a confidentiality agreement will result in waiver of the attorneyclient and work product immunity. Depending on the jurisdiction under which the issue may be tried, a confidential disclosure within a due diligence investigation may protect privileges and immunities associated with the disclosed materials. However, as discussed in Section VI[D] above, court cases make it far from certain that a confidential disclosure, without more, will protect the privileges and immunities of the disclosed materials. 2. Joint Defense Agreement As discussed in Section VI[E] above, one of the factors courts consider in determining whether a common interest privilege exists is whether the parties

Waiver of Attorney-Client Privilege and Work Product Immunity

are contemplating actual or potential litigation on the topic of the privileged disclosure. Execution of a joint defense agreement prior to disclosing privileged information can provide evidence that the disclosure was made at a time when the parties were contemplating actual or potential litigation on the topic of the privileged disclosure. 3. Timing of Disclosure To the extent possible, the parties to a due diligence investigation should delay any disclosure of privileged information until an agreement between the parties is near, preferably in its final stages. Disclosing privileged information too early may be detrimental to establishing a common interest. In Katz, one of the reasons the court failed to uphold the privilege of disclosed materials was that the court found: [T]he plaintiffs failed to meet their burden of showing the requisite identity of interests required under the doctrine because the parties had not reached an agreement, final or otherwise, as to the licensing issues prior to [the disclosure]. See In re Bevill, 805 F.2d at 122 (defendant did not produce evidence that parties agreed to pursue joint defense strategy).84

4. To Whom the Disclosure Is Made It can be important who reviews the disclosed privileged information. For example, in Tennoco, the court favorably commented that the disclosing party “showed the opinion to a limited number of [the acquiring company] representatives.”85 In addition, to prove a common interest, it is important the people viewing the disclosure do so for legal as opposed to business reasons. For example, in Walsh, the court refused to find a common interest privilege where the content of a privileged disclosure was communicated not to attorneys but to businesspeople. The court held: First, the common interest doctrine protects confidences shared by one party with the attorneys of another party. . . . The common enterprise upon which Salomon and Northrop were embarked was a business, not a legal, enterprise. Salomon was advising Northrop on financial and other business strategies. That is plain from the written agreement between them that was submitted to the court on this motion. There was undoubtedly a concern about litigation. Northrop, in cooperation with Salomon as its investment

84. Katz v. AT& T Corp., 191 F.R.D. 433, 438 (E.D. Pa. 2000). 85. Tenneco Packaging Specialty & Consumer Prods., Inc. v. S.C. Johnson & Son, Inc., 1999 U.S. Dist. LEXIS 15433, *8 (N.D. Ill. 1999).

889

890 Chapter 24 Waiver of Attorney-Client Privilege and Work Product Immunity banking advisor, was developing a business strategy one of whose components was to avoid litigation if possible. But that does not transform their common interest and enterprise into a legal, as opposed to commercial, matter.86

5. Plan on Waiver Finally, given all of the concerns cited above about protecting the attorneyclient privilege and work product immunity for materials disclosed to a third party (e.g., during due diligence), if such a disclosure must be made, the involved parties should anticipate a court finding that the disclosure waived all privileges and immunities associated with the disclosed material, and should plan and proceed accordingly.

VII. Practice Points A. Reliance on an Opinion of Counsel of Noninfringement and/or Invalidity to Counter Willful Infringement in Litigation Waives Only Certain Attorney-Client Privileges and Work Product Immunities Associated with the Opinion Relying in litigation on an opinion of counsel of noninfringement and/or invalidity to counter a charge of willful infringement results in: (a) a waiver of the attorney-client privilege to all correspondence between the opinion counsel and the client related to the opinion; (b) a waiver of work product protection to all documents by opinion counsel that embody communications between the opinion counsel and client concerning the subject matter of the case, such as a traditional opinion letter; and (c) a waiver of work product protection to all documents by opinion counsel that discuss communications between the opinion counsel and the client concerning the subject matter of the case, but that are not themselves communications to or from the client. However, relying in litigation on an opinion of counsel of noninfringement and/or invalidity to counter a charge of willful infringement does not result in: (a) waiver of work product immunity as to documents prepared by opinion counsel and trial counsel analyzing the law, facts, trial strategy, and so forth that reflect the attorney’s mental impressions but that were not given to the client; (b) attorney-client communications between trial counsel and the

86. Walsh v. Northrop Grumman Corp., 165 F.R.D. 16, 18–19 (E.D.N.Y. 1996) (emphasis added).

Practice Points

client where trial counsel is separate and apart from opinion counsel; and (c) work product by trial counsel where the trial counsel is separate and apart from opinion counsel.

B. The Importance of Maintaining Separate Opinion and Trial Counsel Because relying in litigation on an opinion of counsel of noninfringement and/or invalidity to counter a charge of willful infringement does not result in waiver of: (a) any attorney-client communications between trial counsel and the client where trial counsel is separate and apart from opinion counsel; or (b) any work product by trial counsel where the trial counsel is separate and apart from opinion counsel, a defendant to a patent infringement litigation should hire separate opinion and trial counsel in situations where it may be necessary to rely on an opinion of counsel as a defense to willful infringement. Further, in such a case, interactions between the separate trial and opinion counsel should be kept to a minimum, and the client should not comingle correspondence and other materials from the separate counsel.

C. Exercise Extreme Caution in Disclosing Attorney-Client Privileged and Work Product Protected Materials to Third Parties, Even in Due Diligence Investigations Attorney-client privileged and work product-protected materials should not be disclosed to third parties. This includes parties to patent due diligence investigations. These parties should exercise extreme caution in disclosing any materials to each other that may be protected by attorney-client privilege and/or work product immunity. Regardless of the precautions taken, any disclosure of attorney-client privileged and/or work product-protected material to a third party (including between a target company and an acquiring company in a patent due diligence investigation) could be found by a court to waive the attorney-client privileges and/or work product protection associated with the disclosed subject matter. 1. Ideally, the Acquiring Company Should Obtain Its Own Patent Evaluations and Opinions Ideally, in patent due diligence investigations, a target company should never disclose any attorney-client privileged and/or work product-protected information to an acquiring company that the parties wish to remain protected

891

892

Chapter 24 Waiver of Attorney-Client Privilege and Work Product Immunity

by privilege. If at all possible, an acquiring company in a due diligence investigation should obtain its own separate evaluations and opinions and keep them to itself. This is the only certain way to avoid a court holding that disclosures among the parties to a due diligence investigation may waive privileges and protections associated with the disclosed materials. This even includes situations where there is a confidentiality agreement in place, the facts appear to fit a common interest situation, and/or there is a joint defense agreement in place. 2. Confidentiality Agreement Any due diligence investigation should have a joint confidentiality agreement in place between all parties before any confidential information is disclosed. This is particularly important if attorney-client privileged and/or work product-protected materials are to be disclosed. In the absence of a confidentiality agreement, disclosure of privileged materials to a third party (such as by a target company to an acquiring company) will result in waiver of the attorney-client privilege and work product immunity. On the other hand, depending on the jurisdiction under which the issue may be tried, a confidential disclosure within a due diligence investigation may act to protect privileges associated with the disclosed materials. However, as discussed in Section VI[D] above, based on the court cases, it is far from certain that a confidential disclosure, without more, will protect the privileges of the disclosed materials. 3. Joint Defense Agreement As discussed in Section VI[E] above, one of the factors courts consider in determining whether a common interest privilege exists between the parties to the due diligence investigation is whether the parties are contemplating actual or potential litigation on the topic of the privileged disclosure. Execution of a joint defense agreement prior to disclosure of privileged information can provide evidence that the disclosure was made at a time that the parties were, in fact, contemplating actual or potential litigation on the topic of the privileged disclosure. 4. Timing of Disclosure To the extent possible, the parties to a due diligence investigation should delay any disclosure of privileged information until an agreement between the parties is near, preferably in its final stages. Disclosing privileged information too early may be detrimental to establishing a common interest privilege.

Practice Points

5. To Whom the Disclosure Is Made It can be important who reviews the disclosed privileged information. For example, courts look favorably on limited circulation of disclosed subject matter for reasons of maintaining confidentiality. Additionally, because the common interest doctrine involves common legal interests as opposed to business interests, it is important that the disclosed materials be reviewed by attorneys instead of businesspeople.

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APPENDIX

A Sample Outline of Noninfringement and Invalidity Opinion

895

Confidential, Attorney-Client Privileged, and Attorney Work Product1

INVALIDITY AND NONINFRINGEMENT OPINION RENDERED FOR ACME WIDGETS, INC. REGARDING ANVIL TECHNOLOGY AND U.S. PATENT 9,191,191 AUGUST 14, 2012 Law & Firm, L.L.P. 122 Main Street, Suite 7200 Big City, Small State 81818 (123) 555–5555

This is a confidential document of Acme Widgets, Inc. (“Acme”) and has been prepared by Acme’s attorneys. The document contains and is essentially based on confidential communications between Acme and its attorneys. The document also contains the mental impressions, conclusions, and legal theories of Acme’s attorneys. Only Acme and its authorized personnel and attorneys are entitled to have possession of this document. Its contents are privileged and should neither be transmitted to nor shared with any third party.

LAW & FIRM, L.L.P. 1. The header of every page of an opinion should clearly state “Confidential, AttorneyClient Privileged, and Work Product” (this is omitted from this Appendix solely for purposes of increasing the clarity of this illustration—this language should always be on every page of an actual opinion).

896

Appendix A Sample Outline of Noninfringement and Invalidity Opinion I. Privileged Status of this Opinion

898

II. Nature of Commission

898

III. Summary of the Opinion

900

IV. U.S. Patent No. 9,191,919

900

V. Applicable Legal Principles

900

VI. The Anvil Technology

901

VII. The Prior Art

902

A. Roadrunner 1986 Nature

903

B. Coyote 1988 Science

904

VIII. Level of one of Ordinary Skill in the Art, and Assistance Regarding the views and Understanding of Same at the Time of the Invention IX. Invalidity and Noninfringement Analysis

906 908

A. Claim Construction

908

B. Invalidity

911

1. Claims 1–4 and 7–15 Are Anticipated Under Section 102(b) by Roadrunner 1986 Nature a) Claim 1 2. Claim 5 Is Obvious Under Section 103(a) C. Noninfringement

911 911 913 920

1. No Literal Infringement

920

2. No Infringement Under the Doctrine of Equivalents

922

X. Conclusions APPENDIX A U.S. Patent No. 9,191,919 APPENDIX B Roadrunner 1986 Nature APPENDIX C Coyote 1988 Science

924

897

898

Appendix A Sample Outline of Noninfringement and Invalidity Opinion

I. Privileged Status of this Opinion This document contains attorney-client privileged and work product information. Acme Widgets, Inc. (“Acme”) may find itself in litigation with another entity who may try to discover documents such as this opinion. In order to preserve the privileged and non-discoverable status of this and all of our opinions, we advise Acme to maintain the confidentiality of this opinion and to limit its distribution to only those persons who participate substantially in decisions regarding action to be taken based on our legal advice. The information contained herein is not intended for use by any person or entity other than Acme.

II. Nature of Commission We have been commissioned by Acme to analyze and opine as to whether a reasonable court of competent jurisdiction in the United States should hold that the Anvil Technology, as defined herein, would infringe any valid claim of United States Patent 9,191,919 (“the ’919 patent”) (Appendix A). This opinion is limited to an analysis of the claims of U.S. Patent No. 9,191,919 for the Anvil Technology as expressly defined herein. This analysis and the opinions expressed herein are based on United States federal patent law as set forth primarily in 35 U.S.C. §§ 1—307 and court opinions as specified below interpreting same. A summary of the relevant law is given herein in Section V. In the initial analysis of U.S. patents, we rely primarily on the literal claim language. If there is no literal infringement, then we do an analysis under the doctrine of equivalents. This analysis and the opinions herein are expressly limited as follows: (i)

(ii)

(iii)

The noninfringement analysis and opinion is strictly limited to our understanding of the Anvil Technology as expressly defined herein, as of the date hereof and not as of any other date. Unless specifically directed by Acme and accepted by us in the future, we will not undertake any supplementation of the analyses and the opinions expressed herein, even if facts and circumstances come to our attention that could affect such analyses and opinions; All opinions expressed herein are based on U.S. Patent No. 9,191,919, and not on any other patents, including any patents issuing from applications related to the ’919 patent. Unless specifically directed by Acme and accepted by us in the future, we will not undertake supplementing of this investigation and the opinions expressed herein, even if additional patents should come to our attention, including patents issuing from applications related to the ’919 patent; All opinions expressed herein are based solely on U.S. federal patent law as of the date hereof, and not as of any other date. Unless specifically directed

Appendix A Sample Outline of Noninfringement and Invalidity Opinion by Acme and accepted by us in the future, we will not undertake supplementing of the analyses and the opinions expressed herein, even if changes in the law occur that could affect such analyses and opinions; (iv) We make no analyses or opinions under any laws other than the U.S. federal law discussed herein, and we make no analyses or opinions of any non-U.S. patent rights, including any non-U.S. patents or patent applications related to the ’919 patent. Any analyses and opinions based on non-U.S. law or non-U.S. patent rights should be obtained by Acme from competent legal counsel duly registered in the relevant countries; (v) In the interest of conciseness, not all positions of noninfringement or invalidity are necessarily set forth herein. For example, we may discuss only certain positions of noninfringement or invalidity herein. However, this does not necessarily mean that we do not have other positions that are equally as strong. Therefore, this analysis and opinion should not be construed in any manner as a limitation on nondiscussed noninfringement or invalidity issues; (vi) Due to inherent uncertainties in prior art searching, we can never assert with certainty that we have located all prior art that may be relevant to the ’919 patent; (vii) This document, including its analyses and opinions, was prepared with the understanding that neither this document, nor anything in, or part of, this document, including but not limited to its analyses and opinions, will be submitted to the U.S. Securities and Exchange Commission (“SEC”), or used in, or in association with, any submissions, reports, disclosures, and the like, in any manner associated with SEC laws or regulations. Moreover, we do not represent Acme before the SEC, nor do we represent or advise Acme in connection with any SEC-related matters. Therefore, neither this opinion nor any of its contents, including but not limited to its analyses and opinions, have been prepared in the representation of Acme in any SEC-related matters; and (viii) Nothing herein shall be construed to cause us to be considered “experts” within the meaning of Section 11 of the Securities Act of 1933, as amended.

In rendering these opinions, we have analyzed the issues of validity and infringement. Realistically, there is no way that we can provide an absolute statement as to how a court will construe the claims of a patent, or how a fact finder (which could be a judge or a jury) may determine whether a product or method infringes one or more valid claims of a patent. This uncertainty is due to many factors, including: (a) the composition and biases of juries of laypeople; (b) the nature of the evidence that is considered by the fact finder; (c) the credibility of witnesses, both fact and expert, whose testimony may be considered by the fact finder; and (d) the constantly changing and evolving nature of U.S. law. These and other factors inherent in U.S. law, including the jury system, may result in an outcome that is different from our conclusions. Our opinions are based upon how a court or finder of fact should decide the issues presented, based on the facts described herein and the law discussed herein as of the date of this opinion. Further, certain issues, including unenforceability and other potential defenses to an infringement allegation, were not considered or relied upon in

899

900 Appendix A Sample Outline of Noninfringement and Invalidity Opinion rendering this opinion because certain facts concerning these issues are not available to us at this time.

III. Summary of the Opinion It is our opinion that a reasonable court of competent jurisdiction should hold that no valid claims of the ’919 patent would be infringed by making, using, selling or offering to sell in the United States, or importing into the United States, the Anvil Technology, as described herein. More specifically, it is our opinion that a reasonable court should hold that all claims of the ’919 patent are invalid and would not infringed by the Anvil Technology. It is our opinion that a reasonable court of competent jurisdiction should hold that claims 1–4 and 7–15 are invalid for being anticipated under 35 U.S.C. § 102(b); claims 5 and 6 are invalid for being obvious under 35 U.S.C. § 103(a); and none of claims 1–15 would be literally infringed or infringed under the doctrine of equivalents by the Anvil Technology.

IV. U.S. Patent No. 9,191,919 U.S. Patent No. 9,191,919 was issued to Coyote on August 14, 2002, and, according to U.S. Patent Office records, is assigned to Open Road Anvils, Inc. The priority date of the ’919 patent is November 11, 1992, the filing date of the U.S. patent application from which the ’919 patent issued. No priority applications are claimed for the ’919 patent. The ’919 patent discusses and claims lightweight of anvils for use in the cartoon industry. The ’919 patent has 15 claims, including two independent claims, claims 1 and 10. Certain individual claims of the ’919 patent are discussed in detail below. A representative claim, claim 1, is as follows: 1. An anvil for cartoon use, comprising: (a) an anvil-shaped plastic inner body, having an upper elongated portion having two opposing ends, wherein one end is horn-shaped and the other end is rectangular-shaped; and (b) a laminate disposed substantially over the outer surface of said anvil-shaped plastic inner body, wherein said laminate has the appearance of steel.

V. Applicable Legal Principles [In this section, one explains the relevant law of patent validity and infringement.

Appendix A Sample Outline of Noninfringement and Invalidity Opinion For both noninfringement and invalidity opinions, one must include a discussion of the law of claim construction (see Chapter 2). This should include a general discussion of the law, as well as a discussion of the law of any specific claim construction issues applicable to the analyses and opinions. If applicable, this would include a discussion of the law of claim construction for means-plus-function claims, product-by-process claims, or claims having unusual transition phrases such as “consisting essentially of” (see Chapter 2). For noninfringement, one should include a discussion of the general process of determining infringement by comparing the objectively construed claims with the potentially infringing product or process (see Chapters 2–5); the general law of literal infringement (see Chapter 3); the general law of infringement under the doctrine of equivalents, including a discussion of limitations on the doctrine such as prosecution history estoppel (see Chapter 4); and the burden of proof (see Chapters 2–5). One should also include a discussion of the law of any specific infringement issues applicable to the analyses and opinions, such as infringement of means-plus-function claims, infringement of product-by-process claims, or indirect infringement (see Chapters 2–5). For invalidity, one should include a discussion of the general process of determining validity of a patent’s claims by comparing the objectively construed claims with the prior art, for art-based invalidity such as anticipation and obviousness (see Chapters 6–8), or comparing the objectively construed claims with the specification, for specification-based invalidity such as enablement and written description (see Chapter 9). There should also be a discussion of the general law of anticipation (see Chapters 6 and 7); the general law of obviousness, including a discussion of the general process for determining obviousness that includes the Graham factors, the KSR Supreme Court case, and evidence of nonobviousness including secondary considerations (see Chapter 8); and the general law of enablement and written description (see Chapter 9). One should also include a discussion of the presumption of validity of the claims of issued U.S. patents, and the burden of proof for invalidity (see Chapters 6–9). Finally, one should include a discussion of the law of any specific invalidity issues applicable to the analyses and opinions, such as enablement of anticipatory references (see Chapters 6 and 7), inherent anticipation (see Chapters 6 and 7), and best mode (see Chapter 9).]

VI. The Anvil Technology [For infringement evaluations and opinions, the potentially infringing subject matter (often, a client’s proposed commercial subject matter) should be described in thorough and precise detail. This is a critically important aspect of a noninfringement opinion. Because determining infringement—or lack thereof—is highly fact-dependent, all critical aspects of a potentially infringing

901

902

Appendix A Sample Outline of Noninfringement and Invalidity Opinion technology must be described accurately and in detail in the opinion. Further, if opining on noninfringement of a client’s technology, this description of the technology should be verified with the client for accuracy and completeness. This importance of this section of a noninfringement opinion cannot be overstated. For example, if the opinion is to be used to avoid a finding of willful infringement, the technology described and analyzed in the opinion must match the commercial technology on which the client may be sued for patent infringement. If the technology in the noninfringement opinion does not match the commercial technology of an infringement suit, an accused infringer may not be able to rely on the opinion to avoid a finding of willful infringement. For these reasons, this section should repeat the disclaimer that the opinion is strictly limited to an evaluation and opinion of noninfringement of the technology exactly as defined herein. If printed materials (e.g., brochures of the commercial technology) accurately describe the technology, one may include copies of such as an appendix to the opinion.] For example . . . This opinion is strictly limited to the express definition of the Anvil Technology below. This opinion does not apply to any subject matter that differs from the Anvil Technology as defined below. For purposes of this opinion, the Anvil Technology is an anvil that is made of a plastic inner portion covered by a laminate having the appearance of steel. Further, the anvil has an upper elongated portion having two opposing ends, wherein both ends are of identical shape. Specifically, both ends of the upper elongated portion are horn-shaped. Etc. . . .

VII. The Prior Art [For invalidity evaluations and opinions, the prior art is described in detail in this section. It is important that the description of the prior art include all aspects on which the opinion relies. This section should also qualify the prior art under Section 102. For example, if the prior art is a printed publication under 35 U.S.C. § 102(b), one must show that the printed publication was publicly available more than one year before the effective priority date of the patent being evaluated (see Chapter 6). If the date of the reference is not clearly apparent from the face of the reference, this section should describe how the date was determined and verified. Any supporting information (such as a declaration by a librarian as to the date the reference was publicly available) should accompany the opinion as an appendix.

Appendix A Sample Outline of Noninfringement and Invalidity Opinion One should also report the effective priority date of the patent being analyzed for infringement. If it is necessary to prove a priority date that is later than the earliest claimed date of the patent (e.g., if the patent has a priority claim to earlier application to which it is related as a continuation-in-part, and the conclusion of the opinion is that the patent is not entitled to the priority date of the earlier application), this analysis should be described in this section. It is also important to note in this section whether the prior art reference was considered by the U.S. Patent Office during the prosecution history of the patent. As discussed in Chapter 6, if a reference was considered by the Patent Examiner during the prosecution history of the patent being analyzed, the burden of proof remains on the party asserting invalidity to demonstrate it by clear and convincing evidence. However, the Federal Circuit has held that the burden of proving invalidity “becomes particularly heavy”2 when a reference was considered by the Patent Examiner in the prosecution of a patent’s application in the U.S. Patent Office. If the prior art is printed material, copies should accompany the opinion as an appendix.] For example . . .

A. Roadrunner 1986 Nature The article “Lightweight, Inexpensive Anvils for Use in Cartoons,” Road Runner, 1986, Nature, 123:392–426 (“Roadrunner 1986 Nature”) was published on August 14, 1986. The priority date of the ’919 patent is November 11, 1992, the filing date of the U.S. patent application that issued as the ’919 patent. No priority applications were claimed for the ’919 patent. Therefore, Roadrunner 1986 Nature is prior art to the ’919 patent under Section 102(b) as a printed publication available more than one year before the priority date of the ’919 patent. As discussed in Section V above, prior art under Section 102(b) is available both for purposes of proving anticipation of claimed subject matter under Section 102(b) and for proving obviousness under Section 103(a). A copy of the Roadrunner 1986 Nature is attached as Appendix B. The Roadrunner 1986 Nature reference was not considered during prosecution of the application that issued as the ’919 patent, and is not listed on the face of the patent. Roadrunner 1986 Nature discloses a lightweight, inexpensive anvil for use in cartoons. The anvil is lightweight and inexpensive due to the use of an

2. Impax Labs., Inc. v. Aventis Pharms. Inc., 545 F.3d 1312, 1314 (Fed. Cir. 2008).

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Appendix A Sample Outline of Noninfringement and Invalidity Opinion anvil-shaped inner core made of plastic that is overlaid by a laminate that has the appearance of steel. Specifically, figure 3a shows an anvil-shaped inner body made of plastic, having an upper elongated portion having two opposing ends, wherein one end is horn-shaped and the other end is rectangular-shaped. Further, page 4, lines 10–20 explain that figure 3a shows an anvil-shaped plastic inner body having an upper elongated portion having two opposing ends, wherein one end is horn-shaped and the other end is rectangular-shaped. Figure 3b shows the above described an anvil-shaped plastic inner body covered with a laminate disposed over the outer surface of the anvil-shaped inner body, wherein the laminate has the appearance of steel. Further, page 4, lines 20–42 explain that figure 3b shows an anvil-shaped inner body made of plastic and having an upper elongated portion having two opposing ends (wherein one end is horn-shaped and the other end is rectangular-shaped), and covered with a laminate, wherein the final coated anvil has the appearance of being made of solid steel. Additionally, on page 4, lines 32–33, the reference states, “[t]o save money, and to make the anvil lighter in weight, the inner body of the anvil is shaped like the final version, but is made of plastic. A lightweight laminate having the appearance of steel is then applied over the inner body. This produces an anvil having the appearance of being made of solid steel.”

B. Coyote 1988 Science The article “Lightweight, Inexpensive Anvil with Handles for Use in Cartoons,” Coyote, 1986, Science 345:1107–1140 (“Coyote 1988 Science”) was published in September 1986. The priority date of the ’919 patent is November 11, 1992, the filing date of the U.S. patent application that issued as the ’919 patent. No priority applications were claimed for the ’919 patent. Therefore, Coyote 1988 Science is prior art to the ’919 patent under Section 102(b) as a printed publication available more than one year before the priority date of the ’919 patent. As discussed in Section V above, prior art under Section 102(b) is available both for purposes of proving anticipation of claimed subject matter under Section 102(b) and for proving obviousness under Section 103(a). A copy of Coyote 1988 Science is attached as Appendix C. The Coyote 1988 Science reference was not considered during prosecution of the application that issued as the ’919 patent, and is not listed on the face of the patent. Coyote 1988 Science discloses a lightweight, inexpensive anvil for use in cartoons, wherein the anvil has handles on opposite sides of its base for easy handling. The anvil is lightweight and inexpensive due to the use of an anvil-shaped inner core made of plastic that is overlaid by a laminate that has

Appendix A Sample Outline of Noninfringement and Invalidity Opinion the appearance of steel. By having handles on opposite sides of the base, the anvil is especially adapted for easy handling, such as throwing, strategically dropping, and bludgeoning. More specifically, figure 4 shows an anvil-shaped inner body made of plastic having an upper elongated portion having two opposing identical ends, wherein both ends are identically rectangle-shaped. Further, page 2, lines 15–35 explain that figure 4 shows an anvil-shaped, plastic inner body, having an upper portion having two ends, wherein both ends are identically rectangular-shaped. As discussed below, the figure also shows that the base of the anvil-shaped plastic inner body has handles on opposite sides of the base. Figure 5 shows the above-described anvil-shaped inner body made of plastic, covered with a laminate disposed over the outer surface of the inner body. The laminate has the appearance of solid steel. Therefore, the coated anvil shown in figure 5 has the appearance of a solid steel anvil. As discussed below, figures 4 and 5 also show that the base of the anvil-shaped inner body has handles on opposite sides of the base that are made of the plastic of the inner body, and coated with the laminate. Further, page 3, lines 5–22 explain the lightweight and less expensive aspects of the anvil: Figure 4 shows an anvil-shaped inner body made of plastic, having an upper portion having two opposing ends, wherein each end is rectangular-shaped. Figure 5 shows the inner body covered with a laminate disposed over the outer surface of the plastic inner body, wherein the laminate has the appearance of steel. The anvil is lightweight and inexpensive because it is not made of solid steel. Rather, the anvil is composed of an anvil-shaped plastic inner body to which a laminate is applied to coat substantially all of the plastic inner body. The laminate has the appearance of steel. Thus, the final, coated anvil has the appearance of a traditional solid steel anvil, but is lighter, and less expensive to manufacture (see “Lightweight, Inexpensive Anvils for Use in Cartoons,” Road Runner, 1986, Nature, 123:392–426).

As explained in the analyses and opinions below, it is significant that Coyote 1988 Science specifically references Roadrunner 1986 Nature as the source of the concept of creating a lightweight, inexpensive anvil for use in cartoons having an anvil-shaped plastic inner body coated with a laminate that has the appearance of steel. Additionally, figures 4 and 5 show handles on opposite sides of the base of the anvil-shaped plastic inner body (figure 4) that are coated with the laminate (figure 5). Figure 4 indicates that the handles are made of the same plastic as the inner body of the anvil (i.e., figure 4 shows a plastic anvil-shaped inner body having handles on opposite sides of the base, wherein the handles are part of the plastic inner body). Figure 5 shows that the handles are covered with the laminate in the same manner as the entire plastic inner body, such that the entire anvil, including the side handles, has the appearance of being made of solid steel.

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906 Appendix A Sample Outline of Noninfringement and Invalidity Opinion Further, page 3, lines 23–36 of the paper state: The anvil is especially adapted for easy handling, such as throwing, strategically dropping, and bludgeoning, by having handles on opposite sides of the base. Prior to this paper which discloses placing handles on the base of an anvil, lightweight anvils for use in cartoons, such as that disclosed in Roadrunner 1986 Nature, lacked handles. Therefore, it was awkward and potentially dangerous to maneuver the anvils. This was especially the case in desert environments, where high temperatures make grasping an anvil without handles awkward and potentially dangerous. The anvil as disclosed in this paper, having handles on its base, overcomes the problems of anvils without handles for use in cartoons, such as Roadrunner 1986 Nature. The handles on the anvils in this paper allow, for example, cartoon characters to more easily maneuver the anvils so that they may more easily impale and bludgeon other cartoon characters. This includes doing so at high desert temperatures, because a cartoon character must only grasp the anvil of this paper by the handles to maneuver it, rather than trying to grasp the body of the anvils prior to this paper. Thus, the handles represent an improvement in lightweight anvils for use in cartoons, for example, by improving the use of such by characters in impaling and bludgeoning one another.

Etc. . . .

VIII. Level of one of Ordinary Skill in the Art, and Assistance Regarding the views and Understanding of Same at the Time of the Invention [In this section, one defines the objective person of ordinary skill in the relevant art at the time the claimed invention of the patent was made, which is presumed to be the patent’s priority filing date. Determination of the level of skill of one of ordinary skill in the art involves a fact-based inquiry that may be conducted by consulting individuals such as those at the company who work in the relevant art (and did so at the time of the invention claimed in the patent). Additionally, this section describes the background of the individual(s) relied upon in the opinion as representing the views and understandings of one of ordinary skill in the relevant art at the time of the invention. For example, this individual is relied on in claim construction for explaining how one of ordinary skill in the art would have understood the claim terms at the relevant date. If the individual is of a level of skill that is greater than the level of one of ordinary skill in the art, the opinion must explain how the individual is qualified to opine on the understanding of one of ordinary skill in the art. This may be done, for example, by explaining that while the individual was of a higher skill level than one of ordinary skill in the art at the relevant date, the individual is capable of opining on the views and understanding of one of ordinary skill in the art at that time because the individual routinely worked

Appendix A Sample Outline of Noninfringement and Invalidity Opinion with or supervised individuals who were of ordinary skill in the art at the relevant date. Also, a person who is above the level of ordinary skill in the art at the time of the opinion may be capable of opining on the views and understanding of one of ordinary skill in the art at the date of the invention, because at that time the individual was one of ordinary skill in the art. Additionally, to opine as to one of skill in the art, it can be helpful to engage an individual who is not associated with the company procuring the opinion and who does not stand to benefit in any manner from the outcome of any issues related to the opinion. Further, it is important to state in this section of the opinion any relationship (or lack thereof) between the individual relied upon for expressing the views and understanding of one of ordinary skill in the art and the company procuring the opinion. Again, it is important to note the appropriate date on which one is determining the ordinary level of skill in the art. This is the date when the invention of the patent was made, which is presumed to be the priority filing date of the patent.] For example . . . We have consulted with Mr. Warn Earl Brothers of Monument Valley Anvil Works as to the understanding of one of ordinary skill in the art related to the ’919 patent on the date on which the invention of the ’919 patent was made, which is presumed to be the priority filing date the ’919 patent, November 11, 1992. Mr. Brothers is currently Director of Anvil Aeronautics Research at Monument Valley Anvil Works. Mr. Brothers received a B.S. degree in Anvil Sciences from C. Toon Industrial University in 1988, and has worked in the anvil industry since that time. In November 1992, Mr. Brothers was an Anvil Technician II at Monument Valley Anvil Works. Mr. Brothers joined Monument Valley Anvil Works upon graduation from college in 1988 and has been with the company since that time. We understand from Mr. Brothers that the person of ordinary skill in the art related to the claims of the ’919 patent in November 1992 was a person working full time in anvil research, having a B.S. degree in Anvil Sciences or its equivalent, with from three to five years of full-time experience in anvil research. We understand that Mr. Brothers is qualified to opine as to the understanding of one of ordinary skill in the art relating to the claims of the ’919 patent in November 1992 because Mr. Brothers was one of ordinary skill in the relevant art at that time, having received his B.S. in Anvil Sciences in 1988, and, in November 1992, working full time in anvil research, and having four years of fulltime experience in anvil research. It is our understanding that Monument Valley Anvil Works has no relationship with Acme, and that Mr. Brothers has no relationship with Acme other than consulting with the attorneys who prepared this opinion and receiving a consulting fee for services related to this opinion. We understand

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Appendix A Sample Outline of Noninfringement and Invalidity Opinion from Mr. Brothers that he has no interest, financial or otherwise, in Acme, Open Road Anvils, Inc., or in the outcome of any of the issues addressed herein. Etc. . . .

IX. Invalidity and Noninfringement Analysis A. Claim Construction [In this section, the claims are construed. This section should follow the claim construction law described in Chapter 2, including properly applying the appropriate evidence and other requirements for competent claim construction. This also includes describing all evidence used to determine a claim term’s construction. Where evidence from the patent’s prosecution history is especially illuminating, one should consider attaching copies of the relevant portions of the prosecution history as an appendix to the opinion. This is also where one would discuss and address any specific claim construction issues of relevance to the particular claims (e.g., issues specific to means-plusfunction claims or product-by-process claims).] For example . . . an anvil-shaped plastic inner body, having an upper elongated portion having two opposing ends, wherein one end is horn-shaped and the other end is rectangularshaped

For purposes of this analysis and opinion, it is our opinion that a reasonable court should construe the claim term “an anvil-shaped plastic inner body, having an upper elongated portion having two opposing ends, wherein one end is horn-shaped and the other end is rectangular-shaped” to mean an anvil-shaped inner body having an upper elongated portion having two opposing ends, wherein one end is horn-shaped and the opposite end is rectangular-shaped, and excluding anvils having an upper elongated portion having identical ends. First, we understand from Mr. Brothers that this is the meaning the claim terms would have had to one of ordinary skill in the relevant art at the time of the invention of the ’919 patent, November 1992. Further, this meaning is consistent with the drawing and description of anvils in the ’919 patent. For example, figure 1 of the ’919 patent, which is described in column 12, lines 50–62 of the ’919 patent, shows a plastic anvil-shaped inner body having an upper elongated portion (labeled 4 in figure 1) and having two opposing ends. The ends of the upper elongated portion have different shapes. One end of the upper elongated portion (the

Appendix A Sample Outline of Noninfringement and Invalidity Opinion left side end as shown in figure 1 and labeled 6) is horn-shaped. The other end (the right side end as shown in figure 1 and labeled 8) has a rectangularshaped end. This is described in the specification of the ’919 patent as follows (in column 12, lines 2–62): FIG. 1 shows the anvil (2) of the instant invention. Upper elongated portion (4) of the anvil (2) has two opposing ends (6 and 8) that each have different shapes. One end, labeled 6 in FIG. 1, is horn-shaped, such that the end of the upper section tapers to a pointed ending (9). The other end, labeled 8 in FIG. 1, has a rectangularshaped ending, such that the end has the shape of the end of a rectangle, i.e., as shown in FIG. 1, it has two right angles and a flat, straight end that is at 90 degrees relative to the axis of the upper elongated portion (4). It is necessary to the instant invention that the upper elongated portion (4) have dissimilar opposing ends (6 and 8) in order for the anvil of the instant invention to serve its function in cartoons, which is to provide an upper end having both a pointed ending and a rectangularshaped ending such that a cartoon character can simultaneously impale one cartoon character with the pointed end and bludgeon another character with the rectangular-shaped end, as shown in FIG. 2. Moreover, the addition of handles to the base of the anvil (3) as shown in FIG. 3, which shows the anvil (2) having base (3) with handles (10) on opposing sides of the base (3), aids in the use of the anvil in cartoons, i.e, impaling and bludgeoning other cartoon characters. This is because the handles on the anvil make it easier to maneuver the anvil by cartoon characters for its use in cartoons, as shown in FIG. 4. FIG. 4 shows a cartoon character using the inventive anvil, having opposing handles (10) on the base (3) of the anvil (2), wherein the cartoon character is grasping the anvil by the handles for improved maneuverability of the anvil (for example, in simultaneously impaling one cartoon character and bludgeoning another). This use of the handles is especially preferred when the anvil is used in high desert temperatures where the surface of the anvil can get very hot. Maneuvering the anvil without handles in these conditions can be dangerous, awkward, and inefficient for its purpose because a character must try to grasp the anvil by its surface, which can be very hot, which can lead to dropping the anvil or missing the intended target and potentially impaling or bludgeoning an innocent bystander, such as a cartoon illustrator. The addition of the handles makes maneuvering the anvil much easier, more efficient, and more precise. This is even more so in high desert temperatures because a character may maneuver the anvil merely by grasping the handles rather than the surface area of the anvil, thereby decreasing the amount of hot surface area a character must touch on the anvil in order to impale and bludgeon.

No language or drawings anywhere in the ’919 patent or its prosecution history indicate that the claims are broader than the disclosure in the patent. Still further, the patent expressly teaches it is necessary that the upper elongated portion of the anvil must have dissimilar opposing ends (6 and 8) in order for the anvil of the instant invention to serve its function in cartoons. For example, the patent states: “It is necessary to the instant invention that the upper elongated portion (4) have dissimilar opposing ends (6 and 8) in order for the anvil of the instant invention to serve its function in cartoons. . . an upper end having both a pointed ending and a rectangular-shaped ending such that a cartoon character can simultaneously impale one cartoon character

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Appendix A Sample Outline of Noninfringement and Invalidity Opinion with the pointed end and bludgeon another character with the rectangular shaped end, as shown in FIG. 2.” (column 12, lines 10–15, emphasis added). Additionally, during prosecution of the application that issued as the ’919 patent, this claim limitation originally read: “an anvil-shaped plastic inner body, having an upper portion having two opposing ends.” In an Office Action dated November 11, 1996 (p. 4), the Examiner rejected the claims as anticipated by Never-Caught 1972 PNAS, which discloses light weight laminated anvils having plastic cores having identical opposing ends on upper elongated portions. Specifically, Never-Caught 1972 PNAS discloses two different anvils, each having an upper elongated portion made of light weight plastic covered by laminate having identical opposing ends. One anvil has identical ends on the upper elongated portion that are horn-shaped. The other anvil has identical ends on the upper elongated portion that are rectangular-shaped. To overcome the rejection, the applicants added the language “wherein one end is horn-shaped and the other end is rectangular-shaped” so that the first limitation of claim 1 read as it now does: “an anvil-shaped plastic inner body, having an upper elongated portion having two opposing ends, wherein one end is horn-shaped and the other end is rectangular-shaped” (see Response to Office Action dated March 11, 1997, p. 2). Further, the applicants expressly represented to the Examiner that the upper elongated portion of the claimed anvil had to have dissimilar ends, with one end being horn-shaped and the opposite end being rectangular-shaped. (Amendment and Response Dated March 11, 1997, p. 4, emphasis in original). The claimed (as currently amended) invention does not have identical opposing ends on the upper elongated portion like the cited art (Never-Caught 1972 PNAS). It must have dissimilar ends, specifically wherein one end is horn-shaped and the opposite end is rectangular-shaped. The claimed dissimilar ends, wherein one end must be horn-shaped and the other end must be rectangular-shaped, are necessarily required, as explained in the specification and shown in FIG. 2, so that a single anvil can be used to simultaneously impale a character with the pointed end and bludgeon another character with the rectangular-shaped end. Therefore, unlike the two anvils disclosed in Never-Caught 1972 PNAS, the amended claims do not cover anvils having upper elongated plastic portions having identical ends, including those of Never-Caught 1972 PNAS wherein in one anvil both ends of the upper elongated portion are rectangular and in the other anvil both ends of the upper elongated portion are horn-shaped.

Therefore, in light of the above evidence, including the plain meaning of the terms to one of ordinary skill in the relevant are at the time of the invention, the clear disclosure in the specification, and the amendment and clear assertions to the U.S. Patent Office in the prosecution history, it is our opinion that a reasonable court should hold that the claim term “an anvilshaped plastic inner body, having an upper elongated portion having two opposing ends, wherein one end is horn-shaped and the other end is rectangular-shaped” means an anvil-shaped inner body having an upper

Appendix A Sample Outline of Noninfringement and Invalidity Opinion elongated portion having two opposing ends, wherein one end is horn-shaped and the other end is rectangular-shaped, and excludes anvils having an upper elongated portion having identical opposing ends, such as two horn-shaped ends. Etc. . . .

B. Invalidity [In this section invalidity is addressed. As discussed in Chapters 6–9, invalidity must be shown on a claim-by-claim and limitation-by-limitation basis. Invalidity should be shown by comparing the objectively construed claims with the teaching from the prior art (for art-based invalidity) or with the specification (for specification-based invalidity). Claim charts are especially recommended for prior art-based invalidity because they provide a clear means by which to compare directly a claim’s limitations with the corresponding elements in a prior art reference, ensuring that this is done as legally required on a claim-by-claim and limitation-by-limitation basis.] For example . . . As discussed and shown below, it is our opinion that a reasonable court should hold that claims 1–4, and 7–15 of the ’919 patent are invalid for being anticipated under 35 U.S.C. § 102(b) by Roadrunner 1986 Nature. It is also our opinion that a reasonable court should hold that claims 5 and 6 are invalid for being obvious under 35 U.S.C. § 103(a) from a combination of Roadrunner 1986 Nature and Coyote 1988 Science.

1. Claims 1–4 and 7–15 Are Anticipated Under Section 102(b) by Roadrunner 1986 Nature As discussed in Section VII above, Roadrunner 1986 Nature (Appendix B) is prior art to the ’919 Patent under Section 102(b) as a printed publication available more than one year before the earliest possible priority date of the ’919 patent. Anticipation under Section 102(b) requires that a single prior art reference disclose every claim limitation. As shown in the claim charts below, Roadrunner 1986 Nature clearly discloses every limitation of claims 1–4, and 7–15 of the ’919 patent. Hence, it is our opinion that a reasonable court should hold that these claims are invalid for being anticipated.

a) Claim 1 As shown in the table below, claim 1 is anticipated by Roadrunner 1986 Nature because the reference discloses every limitation of claim 1.

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Appendix A Sample Outline of Noninfringement and Invalidity Opinion As shown in the table above, every limitation of claim 1 is disclosed in Roadrunner 1986 Nature. Therefore, it is our opinion that a reasonable court of law should hold that claim 1 of the ’919 patent is invalid for being anticipated by Roadrunner 1986 Nature. Etc. . . . For example . . .

Construction of Claim 1 and Anticipation by Roadrunner 1986 Nature Claim 1

Claim Construction (if different from the literal words)

See Title, Abstract, and entire paper.

An anvil for cartoon use, comprising (a) an anvilshaped plastic inner body, having an upper elongated portion having two opposing ends, wherein one end is horn-shaped and the other end is rectangularshaped;

(b) a laminate disposed substantially over the outer surface of said anvilshaped plastic inner body, wherein said laminate has the appearance of steel.

Anticipation by Roadrunner 1986 Nature

an anvil-shaped inner body, having an upper elongated portion having two opposing ends, wherein one end is horn-shaped and the other end is rectangular-shaped, and excludes anvils having an upper section having identical ends.

Figure 3a shows an anvil-shaped inner body made of plastic, having an upper elongated portion having two opposing ends, wherein one end is horn-shaped and the other end is rectangular-shaped. Further, page 4, lines 10–20 explain that figure 3a shows an anvil-shaped, plastic inner body, having an upper elongated portion having two opposing ends, wherein one end is horn-shaped and the other end is rectangularshaped. Figure 3b shows an anvil-shaped inner body made of plastic, having an upper elongated portion having two opposing ends, wherein one end is horn-shaped and the other end is rectangularshaped, covered with a laminate disposed over the outer surface of the anvil-shaped plastic inner body, wherein the laminate has the appearance of steel.

Appendix A Sample Outline of Noninfringement and Invalidity Opinion Further, page 4, lines 20–42 explain that figure 3b shows an anvil-shaped inner body made of plastic, having an upper elongated portion having two opposing ends, wherein one end is hornshaped and the other end is rectangular-shaped, covered with a laminate disposed over the outer surface of the anvil-shaped plastic inner body, wherein the laminate has the appearance of steel. Further, page 4, lines 32–33, state: “To save money, the inner body of the anvil is shaped like the final version, but is made of plastic. A laminate is then applied over the inner body to give the anvil the appearance of being made of solid steel.”

2. Claim 5 Is Obvious Under Section 103(a) For the reasons discussed below, it is our opinion that a reasonable court should hold that claim 5 of the ’919 Patent is invalid because its subject matter would have been obvious to one of ordinary skill in the relevant art the time of the invention of the ’919 patent from a combination of Roadrunner 1986 Nature and Coyote 1988 Science. Claim 5 of the ’919 patent is as follows: The anvil of claim 1, wherein the anvil further has handles on opposite sides of its base, said handles being made of a plastic inner body and overlaid by a laminate wherein the laminate has the appearance of steel.

It is our opinion that a reasonable court should hold that claim 5 of the ’919 patent is obvious under Section 103(a) from a combination of Roadrunner 1986 Nature and Coyote 1988 Science. Claim 5 depends directly from claim 1 and adds the subject matter quoted above and shown in the table below. The table below indicates that a combination of Roadrunner 1986 Nature and Coyote 1988 Science discloses every limitation of claim 5. As discussed below, it is our opinion that a reasonable court should hold that claim 5 is invalid for being obvious from a combination of Roadrunner 1986 Nature and Coyote 1988 Science because such a combination would have been obvious to one of ordinary skill in the relevant art at the time the invention of the ’919 patent was made.

913

Combination of Roadrunner Nature and Coyote 1988 Science Claim 1


An anvil for cartoon use, comprising (a) an anvil-shaped plastic inner body, having an upper elongated portion having two opposing ends, wherein one end is horn-shaped and the other end is rectangularshaped;

(b) a laminate disposed substantially over the outer surface of said anvil-shaped plastic inner body, wherein said laminate has the appearance of steel;

an anvil-shaped inner body, having an upper elongated portion having two opposing ends, wherein one end is horn-shaped and the other end is rectangular-shaped, and excludes anvils having an upper section having identical ends.

Roadrunner 1986 Nature

Coyote 1988 Science



Figure 3a shows an anvil-shaped inner body made of plastic, having an upper elongated portion having two opposing ends, wherein one end is horn-shaped and the other end is rectangular-shaped.

Figure 4 shows an anvil-shaped inner body made of plastic, having an upper elongated portion having two opposing, identical ends. Further, page 2, lines 15–35 explain that figure 4 shows an anvil-shaped, plastic inner body, having an upper elongated portion having two opposing, identical ends.

Further, page 4, lines 10–20 explain that figure 3a shows an anvil-shaped, plastic inner body, having an upper elongated portion having two opposing ends, wherein one end is horn-shaped and the other end is rectangular-shaped. Figure 3b shows an anvil-shaped inner body made of plastic, having an upper elongated portion having two opposing ends, wherein one end is horn-shaped and the other end is rectangular-shaped, covered with a laminate disposed over the outer surface of the anvil-shaped plastic inner body, wherein the laminate has the appearance of solid steel.

Figure 5 shows an anvil-shaped inner body made of plastic, having an upper elongated portion having two opposing ends, covered with a laminate disposed substantially over the outer surface of the anvil-shaped plastic inner body, wherein the laminate has the appearance of solid steel. Further, page 3, lines 5–22 explain that figure 5 shows an anvil-shaped inner body made of plastic, having an upper elongated portion having two opposing, identical ends, covered with a laminate disposed over the outer surface of the anvil-shaped plastic inner body, wherein the laminate has the appearance of solid steel.

Further, page 4, lines 20–42 explain that figure 3b shows an anvil-shaped inner body made of plastic, having an upper elongated portion having two opposing ends, wherein one end is horn-shaped and the other end is rectangular-shaped, covered with a laminate disposed over the outer surface of the anvil-shaped plastic inner body, wherein the laminate has the appearance of solid steel.

915

Further, on page 4, lines 32–33, the reference states: “To save money, the inner body of the anvil is shaped like the final version, but is made of plastic. A laminate is then applied over the inner body to give the anvil the appearance of being made of steel.” wherein the anvil further has handles on opposite sides of its base, said handles being made of a plastic inner body and overlaid by a laminate wherein the laminate has the appearance of steel.

Further, on page 3, lines 5–22, the reference states: “Figure 4 shows an anvil-shaped inner body made of plastic, having an upper portion having two opposing ends, wherein each end is rectangular-shaped. Figure 5 shows the inner body covered with a laminate disposed over the outer surface of the plastic inner body, wherein the laminate has the appearance of steel. The anvil is lightweight and inexpensive because it is not made of solid steel. Rather, the anvil is composed of an anvil-shaped plastic inner body to which a laminate is applied to coat substantially all of the plastic inner body. The laminate has the appearance of steel. Thus, the final, coated anvil has the appearance of a traditional solid steel anvil, but is lighter, and less expensive to manufacture (see “Lightweight, Inexpensive Anvils for Use in Cartoons,” Road Runner, 1986, Nature, 123:392–426).”

Figure 4 shows handles on opposite sides of the base of the anvil-shaped inner body made of plastic, having an upper elongated portion having two opposing, identical ends. Figure 4 shows that the handles are made of the same plastic as the inner body of the anvil (i.e., figure 4 shows a plastic anvil-shaped inner body having an upper elongated portion having two opposing ends, and a base portion having handles on opposite sides of the base, wherein the handles are part of the plastic inner body). Figure 5 shows that the handles on the base of the anvil-shaped inner body are covered with laminate in the same manner as the entire plastic inner body is coated with laminate, such that when the plastic inner body is covered with the laminate, that the entire anvil, including the side handles, is covered with the laminate and has the appearance of being made of steel.



Roadrunner 1986 Nature

Coyote 1988 Science

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Page 3, lines 23–36 state, “[t]he anvil is especially adapted for easy handling, such as throwing, strategically dropping, and bludgeoning, by having handles on opposite sides of the base. Prior to this paper which discloses placing handles on the base of an anvil, lightweight anvils for use in cartoons, such as that disclosed in Roadrunner 1986 Nature, lacked handles. Therefore, it was awkward and potentially dangerous to maneuver the anvils. This was especially the case in desert environments, where high temperatures make grasping an anvil without handles awkward and potentially dangerous. The anvil as disclosed in this paper, having handles on its base, overcomes the problems of anvils without handles for use in cartoons, such as Roadrunner 1986 Nature. The handles on the anvils in this paper allow, for example, cartoon characters to more easily maneuver the anvils so that they may, for example, more easily impale and bludgeon other cartoon characters. This includes doing so at high desert temperatures, because a cartoon character must only grasp the anvil of this paper by the handles to maneuver it, rather than trying to grasp the body of the anvils prior to this paper. Thus, the handles represent an improvement in lightweight anvils for use in cartoons, for example, by improving the use of such by characters in impaling and bludgeoning one another.”

The above table shows that every limitation of claim 5, which depends directly from claim 1, is disclosed in a combination of Roadrunner 1986 Nature and Coyote 1988 Science. Neither reference alone anticipates claim 5, as neither reference alone discloses every limitation of claim 5. The deficiencies are: (a) Roadrunner 1986 Nature does not disclose the handles on the base of the anvil as claimed in claim 5; and (b) Coyote 1988 Science does not disclose an anvil having an upper elongated portion having two opposing ends, wherein one end is horn-shaped and the other end is rectangular-shaped. Coyote 1988 Science discloses an anvil having an upper elongated portion having two opposing ends. However, both ends of the upper elongated portion of the anvil disclosed in Coyote 1988 Science are identical rectangular-shaped ends. It is our opinion that the combination of Roadrunner 1986 Nature and Coyote 1988 Science to obtain the subject matter of claim 5 would have been obvious to one of ordinary skill in the art at the time of the invention of the ’919 patent. Section V discusses the law of obviousness. A claimed invention is obvious, and therefore, invalid under Section 103(a) where one of ordinary skill in the art would have found the combination to be obvious at the time of the invention of the patent. Factors to be considered include whether the art is analogous, whether the combination achieves a predictable result or an unexpected result such as unexpected success, and whether there is an express teaching, suggestion, or motivation in the references to combine the references. Here, it is our opinion that a reasonable court should hold that the references are analogous, as both are in exactly the same art: lightweight anvils for use in cartoons. Further, it is our opinion that one of ordinary skill in the art would have found it obvious to combine the references because, for example, Coyote 1988 Science specifically references the Roadrunner 1986 Nature paper, and, in fact, expressly teaches that it is an improvement of the anvil of the Roadrunner 1986 Nature paper. Specifically, as shown in the claim chart above, Coyote 1988 Science expressly teaches that adding handles to the lightweight anvil of Roadrunner 1986 Nature (which lacks only handles in order to correspond to every limitation of claim 5) was an improvement, especially in the maneuverability of the anvils, especially in high desert temperatures. Specifically, page 3, lines 23–36 on the state of Coyote 1988 Science state: “The anvil is especially adapted for easy handling, such as throwing, strategically dropping, and bludgeoning, by having handles on opposite sides of the base. Prior to this paper which discloses placing handles on the base of an anvil, lightweight anvils for use in cartoons, such as that disclosed in Roadrunner 1986 Nature, lacked handles. Therefore, it was awkward and potentially dangerous to maneuver the anvils. This was especially the case in desert environments, where high temperatures make grasping an anvil without handles awkward and potentially dangerous. The anvil as disclosed in this paper, having handles on its base,

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Appendix A Sample Outline of Noninfringement and Invalidity Opinion overcomes the problems of anvils without handles for use in cartoons, such as Roadrunner 1986 Nature. The handles on the anvils in this paper allow, for example, cartoon characters to more easily maneuver the anvils so that they may more easily impale and bludgeon other cartoon characters. This includes doing so at high desert temperatures, because a cartoon character must only grasp the anvil of this paper by the handles to maneuver it, rather than trying to grasp the body of the anvils prior to this paper. Thus, the handles represent an improvement in lightweight anvils for use in cartoons, for example by improving the use of such by characters in impaling and bludgeoning one another.”

As shown in Section IX[A], the function of the handles as taught in Coyote 1988 Science is the same as the function of the handles as taught in the ’919 patent. For example, column 12, lines 50–62 of the ’919 patent describe the function of the handles on the anvil (as described in Roadrunner 1986 Nature) as: Moreover, the addition of handles to the base of the anvil (3) as shown in FIG. 3, which shows the anvil (2) having base (3) with handles (10) on opposing sides of the base (3), aids in the use of the anvil in cartoons, i.e, impaling and bludgeoning other cartoon characters. This is because the handles on the anvil make it easier to maneuver the anvil by cartoon characters for its use in cartoons, as shown in FIG. 4. FIG. 4 shows a cartoon character using the inventive anvil having opposing handles (10) on the base (3) of the anvil (2), wherein the cartoon character is grasping the anvil by the handles for improved maneuverability of the anvil, for example, in simultaneously impaling one cartoon character and bludgeoning another. This use of the handles is especially preferred when the anvil is used in high desert temperatures where the surface of the anvil can get very hot. Maneuvering the anvil without handles in these conditions can be dangerous, awkward, and inefficient for its purpose because a character must try to grasp the anvil by its surface, which can be very hot and can lead to dropping the anvil or missing the intended target and potentially impaling or bludgeoning an innocent bystander, such as a cartoon illustrator. The addition of the handles makes maneuvering the anvil much easier, more efficient, and more precise. This is even more so in high desert temperatures, because a character may maneuver the anvil merely by grasping the handles rather than the surface area of the anvil, thereby decreasing the amount of hot surface area a character must touch on the anvil in order to impale and bludgeon.

We understand from Mr. Brothers that making the combination of the references would have been obvious to one of ordinary skill in the art at the filing date of the application for the ‘919 patent because the Coyote 1988 Science reference teaches adding handles to the anvil of Roadrunner 1986 Nature as an improvement, and accordingly it expressly teaches an anvil having the same structure and function as that of the anvil of claim 5 of the ‘919 patent. Therefore, it is our opinion that a reasonable court should hold that claim 5 is obviousness based on an express teaching in the art to modify the anvil of Roadrunner 1986 Nature by adding the handles of Coyote 1988 Science to achieve exactly the subject matter of claim 5, including its functional properties. Thus, the subject matter of claim 5 is expressly taught in the art and

Appendix A Sample Outline of Noninfringement and Invalidity Opinion we are not aware of any factors against obviousness, such as unexpected properties. As discussed in Section V, while the U.S. Supreme Court held in KSR that courts may not require an express teaching, suggestion, or motivation be found in prior art references in order to combine them for obviousness, when there is an express teaching, suggestion, or motivation in the references to make a combination, this supports obviousness. This is especially the case when the results of the suggested or taught combination are what one of ordinary skill in the art would have expected from the combination. As can be seen from the evidence above, this is exactly the situation with the combination of Roadrunner 1986 Nature and Coyote 1988 Science. Coyote 1988 Science expressly teaches one of ordinary skill in the art to combine the teaching of Roadrunner 1986 Nature (an anvil for use in cartoons having every limitation of claim 5 except handles on its base) with the express teaching of Coyote 1988 Science to add handles to the base of the anvil of Roadrunner 1986 Nature to achieve the subject matter of claim 5. Under KSR, an invention is obvious where there is a teaching to combine prior art references to achieve the claimed subject matter and the result of the combination is what would have been predicted from the prior art. In this case, the result, as expressly taught in the prior art is an improved lightweight anvil for use in cartoons where an anvil as disclosed in Roadrunner 1986 Nature is given handles to improve its maneuverability, including improved maneuverability in impaling and bludgeoning cartoon characters, including at high desert temperatures. As discussed above, this is exactly the same structure and function that the ’919 patent describes for claim 5: the anvil of claim 1 having handles for an improved lightweight anvil for use in cartoons. This claimed subject matter is virtually exactly what is taught by Coyote 1988 Science, where it is taught that the anvil of Roadrunner 1986 Nature is given handles to improve its maneuverability in cartoons, including improved maneuverability in impaling and bludgeoning cartoon characters, including at high desert temperatures. Therefore, it is our opinion that a reasonable court should hold that claim 5 of the ’919 patent is invalid for being obvious over a combination of Roadrunner 1986 Nature and Coyote 1988 Science because there is an express teaching to combine the references, and the expected properties of subject matter made by combining the references as taught are the properties of the subject matter of claim 5. As is also discussed in Section V, obviousness may be overcome if evidence of nonobviousness is sufficiently strong. Evidence of nonobviousness includes commercial success, licensing, and copying by others of the claimed invention. We are unaware of any such evidence, although we cannot state with certainty that none exists. However, it would appear unlikely that the ’919 patentees would have evidence such as commercial success or licensing of the claimed invention as we understand that the ’919 patentees do not sell and have never sold the claimed invention, and have not licensed the ’919 patent to others. Further still (as discussed in Section V), even where there is

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Appendix A Sample Outline of Noninfringement and Invalidity Opinion evidence of nonobviousness, a court may still find an invention obvious if the obviousness position is sufficiently strong. Therefore, given the circumstances known to us as of the date of this opinion and discussed herein, as of the date of this document, it is our opinion that a reasonable court should hold that claim 5 of the ’919 patent is invalid under 35 U.S.C. § 103(a) for being obvious over a combination of Roadrunner 1986 Nature and Coyote 1988 Science. Etc. . . .

C. Noninfringement [This section addresses noninfringement. As discussed in Chapters 3 and 4, claims must first be evaluated for literal infringement. If there is no literal infringement, then they must be evaluated for infringement under the doctrine of equivalents. Noninfringement should be examined by comparing the objectively construed claims with the potentially infringing product or process. Unlike invalidity determinations, in which each claim must be individually addressed regardless of the fate of the other claims, in an infringement analysis if a claim from which other claims depend (such as an independent claim) is found to not be infringed, the dependent claims from the noninfringed claim cannot be infringed by law. Therefore, if one determines that a patent’s independent claims are not literally infringed or infringed under the doctrine of equivalents, there is no need to review the dependent claims in order to conclude that none of the patent’s claims are infringed by the same technology.] For example . . . For the reasons discussed below, it is our opinion that a reasonable court should hold that no claims of the ’919 patent would be infringed by the Anvil Technology as described herein. We determine that a reasonable court should hold that neither of the ’919 patent’s independent claims, claims 1 and 10, are infringed by the Anvil Technology. Therefore, we only evaluate infringement of independent claims 1 and 10. As discussed in Section V, if an independent claim is not infringed, the claims from which it depends cannot be infringed by the same subject matter.

1. No Literal Infringement For the reasons discussed below, it is our opinion that a reasonable court should hold that independent claim 1 of the ’919 patent would not be literally infringed by the Anvil Technology as described herein.

Appendix A Sample Outline of Noninfringement and Invalidity Opinion Claim 1 of the ’919 patent reads as follows: 1. An anvil for cartoon use, comprising: (a) an anvil-shaped plastic inner body, having an upper elongated portion having two opposing ends, wherein one end is horn-shaped and the other end is rectangular-shaped; and (b) a laminate disposed substantially over the outer surface of said anvilshaped plastic inner body, wherein said laminate has the appearance of steel.

It is our opinion that a reasonable court should hold that claim 1 of the ’919 patent would not be literally infringed by the Anvil Technology as discussed herein because the Anvil Technology fails to at least meet the limitation of claim 1 that the upper elongated portion of the anvil have opposing ends that are not identical, but where one end is horn-shaped and the other end is rectangular-shaped. As described in Section VI, the anvil of the Anvil Technology has an upper, elongated portion having two opposing ends, wherein both ends are of identical shape. Specifically, both ends of the upper, elongated portion are horn-shaped. As construed in Section IX[A] above, it is our opinion that a reasonable court should hold that the limitation of claim 1 of an anvil “having an upper elongated portion having two opposing ends, wherein one end is horn-shaped and the other end is rectangular-shaped” means an anvil having an upper elongated portion having two opposing ends, wherein one end is horn-shaped and the other end is rectangular-shaped, and specifically excludes an anvil with an upper elongated portion having two opposing ends that are identical. It is, therefore, our opinion that a reasonable court should hold that the Anvil Technology would not literally infringe claim 1 of the ’919 patent because the claim literally requires an anvil having an “upper elongated portion having two opposing ends, wherein one end is horn-shaped and the other end is rectangular-shaped,” and as discussed above for claim construction (Section IX[A]) during prosecution of the application that issued as the ’919 patent, the patentees: (a) amended the claims to remove subject matter that would literally have covered anvils having an upper elongated portion having opposing ends that are identical, including two horn-shaped ends, like the Anvil Technology; and (b) expressly represented to the U.S. Patent Office that their claimed invention does not cover an anvil having an upper elongated portion having two opposing, identical ends, including two ends that are horn-shaped. As discussed in Section V above, when a patent application expressly represents to the U.S. Patent Office what its claimed invention is not, subject matter falling within the disclaimed subject matter cannot literally infringe. Etc. . . .

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Appendix A Sample Outline of Noninfringement and Invalidity Opinion For example . . .

2. No Infringement Under the Doctrine of Equivalents For the reasons discussed below, it is our opinion that a reasonable court should hold that claim 1 of the ’919 patent is not infringed under the doctrine of equivalents by the Anvil Technology as described herein. Claim 1 is shown and discussed above under literal infringement (and construed in detail in Section IX[A]). The claim requires an upper elongated portion having non-identical opposing ends with one end being horn-shaped and the other end being rectangular-shaped. Additionally, as discussed above for literal infringement (and as discussed in detail in Section IV), the anvil of the Anvil Technology has an upper elongated portion having two opposing ends, wherein both ends are of identical shape. Specifically, both ends of the upper elongated portion of the Anvil Technology are horn-shaped. As discussed above, during prosecution of the application that issued as the ’919 patent, the limitation of claim 1 of an anvil having an upper elongated portion having two opposing ends, “wherein one end is horn-shaped and the other end is rectangular-shaped,” was added during prosecution in order to overcome a prior art rejection (Never-Caught 1972 PNAS) that disclosed two different anvils having upper elongated portions having two opposing, identical ends. One anvil has two horn-shaped ends and the other anvil has two rectangular-shaped ends. (see Office Action dated November 11, 1996, p. 4). To overcome the rejection, the applicants added the language “wherein one end is horn-shaped and the other end is rectangular-shaped” so that the first limitation of claim 1 read as it now does: “an anvil-shaped plastic inner body, having an upper elongated portion having two opposing ends, wherein one end is horn-shaped and the other end is rectangular-shaped” (see Response to Office Action dated March 11, 1997, p. 2). Further, the applicants expressly represented to the Examiner that the upper elongated portion of the claimed anvil had to have dissimilar ends, with one end being horn-shaped and the opposite end being rectangular-shaped. (Amendment and Response Dated March 11, 1997, p. 4, emphasis in original): The claimed (as currently amended) invention does not have identical opposing ends on the upper elongated portion like the cited art (Never-Caught 1972 PNAS). It must have dissimilar ends, specifically wherein one end is horn-shaped and the opposite end is rectangular-shaped. The claimed dissimilar ends, wherein one end must be horn-shaped and the other end must be rectangular-shaped, are necessarily required, as explained in the specification and shown in FIG. 2, so that a single anvil can be used to simultaneously impale a character with the pointed end and bludgeon another character with the rectangular shaped end. Therefore, unlike the two anvils disclosed in Never-Caught 1972 PNAS, the amended claims do not cover anvils having upper elongated portions having identical ends, including those of Never-Caught 1972 PNAS wherein in one anvil

Appendix A Sample Outline of Noninfringement and Invalidity Opinion both ends of the upper elongated portion are rectangular and in the other anvil both ends of the upper elongated portion are horn-shaped.

As discussed in Section V, narrowing amendments to overcome prior art rejections create a presumption that the surrendered subject matter cannot be captured under the doctrine of equivalents. Amendment-based estoppel may be rebutted upon a showing that: (a) the alleged equivalent was unforeseeable at the time of the narrowing amendment; (b) the rationale underlying the amendment bore no more than a tangential relationship to the accused equivalent; or (c) there was “some other reason” the patentee could not reasonably have been expected to describe the alleged equivalent. It is our opinion that a reasonable court should hold that these rebuttals to the above-described amendment-based estoppel to claim 1 of the ’919 patent should not apply. First, the potential equivalent was clearly foreseeable at the time of the amendment because it was disclosed in the prior art that caused the narrowing amendment (Never-Caught 1972 PNAS). Second, the basis for the amendment was to overcome the rejection based on the prior art disclosing the accused equivalent. Thus, the rationale for the narrowing amendment was directly related to the accused equivalent. Lastly, there is not “some other reason” why the patentee could not reasonably have been expected to describe the alleged equivalent because, again, the alleged equivalent (an anvil having an upper elongated portion having two opposing ends wherein both ends are horn-shaped) was described in the prior art that the applicants expressly amended the claims to not cover. Thus, it is our opinion that a reasonable court should hold that due to unrebuttable amendment-based estoppel, the ’919 patentees cannot assert that the Anvil Technology as described herein infringes claim 1 under the doctrine of equivalents. Moreover, in addition to amendment-based estoppel discussed above, Section V discusses argument-based estoppel. Under this form of estoppel, a patentee cannot claim subject matter under the doctrine of equivalents that it represented to the Patent Office was not within the scope of its claimed invention. As discussed above for claim construction (Section IX[A]), the patentees clearly represented to the U.S. Patent Office that anvils having an upper portion with identical ends (including having identical horn-shaped ends as in the Anvil Technology) were not within the scope of the claimed invention. Therefore, it is our opinion that a reasonable court should hold that the Anvil Technology would not infringe claim 1 under the doctrine of equivalents because the patentees clearly represented to the U.S. Patent Office that their invention does not include anvils like the Anvil Technology. Thus, for the reasons discussed above, it is our opinion that a reasonable court should hold that the Anvil Technology as described herein would not

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Appendix A Sample Outline of Noninfringement and Invalidity Opinion infringe claim 1 of the ’919 patent under the doctrine of equivalents because, and separately: (a) under amendment-based estoppel, the patentees surrendered the subject matter of the Anvil Technology during prosecution and cannot rebut the presumption of surrender; and (b) under argument-based estoppel, the patentees clearly represented to the Patent Office that claim 1 of the ’919 patent does not cover the Anvil Technology. Etc. . . .

X. CONCLUSIONS Based on the above analysis, it is our opinion that a reasonable court of competent jurisdiction should hold that no valid claims of the ’919 patent would be infringed by making, using, selling or offering to sell in the United States, or importing into the United States, the Anvil Technology, as described herein. The opinions and statements expressed herein are for the sole benefit of and may be relied upon by Acme. The opinions and statements set forth herein are not to be relied upon by another person or entity for any purpose. Very truly yours,

_____________________________ Date

Law & Firm, L.L.P.

APPENDIX

B Sample Outline of Noninfringement Opinion

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Confidential, Attorney-Client Privileged, and Attorney Work Product1

NONINFRINGEMENT OPINION RENDERED FOR ACME WIDGETS, INC. REGARDING ANVIL TECHNOLOGY AND U.S. PATENT 9,191,191 AUGUST 14, 2012 Law & Firm, L.L.P. 122 Main Street, Suite 7200 Big City, Small State 81818 (123) 555-5555

This is a confidential document of Acme Widgets, Inc. (“Acme”) and has been prepared by Acme’s attorneys. The document contains and is essentially based on confidential communications between Acme and its attorneys. The document also contains the mental impressions, conclusions, and legal theories of Acme’s attorneys. Only Acme and its authorized personnel and attorneys are entitled to have possession of this document. Its contents are privileged and should neither be transmitted to nor shared with any third party.

LAW & FIRM, L.L.P. 1. The header of every page of an opinion should clearly state “Confidential, AttorneyClient Privileged, and Work Product” (this is omitted from this Appendix solely for purposes of increasing the clarity of this illustration—this language should always be on every page of an actual opinion).

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Appendix B Sample Outline of Noninfringement Opinion I. Privileged Status of this Opinion

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VI. The Anvil Technology

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VII. Level of One of Ordinary Skill in the Art, and Assistance Regarding the Views and Understanding of Same at the Time of the Invention

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VIII. Noninfringement Analysis

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B. Noninfringement

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1. No Literal Infringement

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2. No Infringement Under the Doctrine of Equivalents

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IX. Conclusions APPENDIX A U.S. Patent No. 9,191,919

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Appendix B Sample Outline of Noninfringement Opinion

I. Privileged Status of this Opinion This document contains attorney-client privileged and work product information. Acme Widgets, Inc. (“Acme”) may find itself in litigation with another entity who may try to discover documents such as this opinion. In order to preserve the privileged and nondiscoverable status of this and all of our opinions, we advise Acme to maintain the confidentiality of this opinion and to limit its distribution to those persons who participate substantially in decisions regarding action to be taken based on our legal advice. The information contained herein is not intended for use by any person or entity other than Acme.

II. Nature of Commission We have been commissioned by Acme to analyze and opine as to whether a reasonable court of competent jurisdiction in the United States should hold that the Anvil Technology, as defined herein, would infringe any claim of U.S. Patent 9,191,919 (“the ’919 patent”) (Appendix A). This opinion is limited to an analysis of the claims of U.S. Patent No. 9,191,919 for the Anvil Technology as expressly defined herein. This analysis and the opinions expressed herein are based on United States federal patent law as set forth primarily in 35 U.S.C. §§ 1—307 and court opinions as specified below interpreting same. A summary of the relevant law is given herein in Section V. In the initial analysis of U.S. patents, we rely primarily on the literal claim language. If there is no literal infringement, then there is an analysis under the doctrine of equivalents. This analysis and the opinions herein are expressly limited as follows: (i)

(ii)

The noninfringement analysis and opinion is strictly limited to our understanding of the Anvil Technology as expressly defined herein, as of the date hereof and not as of any other date. Unless specifically directed by Acme and accepted by us in the future, we will not undertake supplementing of the analyses and the opinions expressed herein, even if facts and circumstances come to our attention that could affect such analyses and opinions; All opinions expressed herein are based on U.S. Patent No. 9,191,919, and not on any other patents, including any patents issuing from applications related to the ’919 patent. Unless specifically directed by Acme and accepted by us in the future, we will not undertake supplementing of this investigation and the opinions expressed herein, even if additional patents should come

Appendix B Sample Outline of Noninfringement Opinion to our attention, including patents issuing from applications related to the ’919 patent; (iii) All opinions expressed herein are based solely on U.S. federal patent law as of the date hereof, and not as of any other date. Unless specifically directed by Acme and accepted by us in the future, we will not undertake supplementing of the analyses and the opinions expressed herein, even if changes in the law occur that could affect such analyses and opinions; (iv) We make no analyses or opinions under any laws other than the U.S. federal law discussed herein, and we make no analyses or opinions of any non-U.S. patent rights, including any non-U.S. patents or patent applications related to the ’919 patent. Any analyses and opinions based on non-U.S. law or non-U.S. patent rights should be obtained by Acme from competent legal counsel duly registered in the relevant countries; (v) In the interest of conciseness, not all positions of noninfringement are necessarily set forth herein. For example, we may discuss only certain positions of noninfringement herein. However, this does not necessarily mean that we do not have other positions that are equally as strong. Therefore, this analysis and opinion should not be construed in any manner as a limitation on nondiscussed noninfringement issues; (vi) This document, including its analyses and opinions, was prepared with the understanding that neither this document, nor anything in, or part of, this document, including but not limited to its analyses and opinions, will be submitted to the U.S. Securities and Exchange Commission (“SEC”), or used in, or in association with, any submissions, reports, disclosures, and the like, in any manner associated with SEC laws or regulations. Moreover, we do not represent Acme before the SEC, nor do we represent or advise Acme in connection with any SEC-related matters. Therefore, neither this opinion nor any of its contents, including but not limited to its analyses and opinions, have been prepared in the representation of Acme in any SEC-related matters; and (vii) Nothing herein shall be construed to cause us to be considered “experts” within the meaning of Section 11 of the Securities Act of 1933, as amended. In rendering these opinions, we have analyzed the issue of infringement of the claims of the ’919 patent. Realistically, there is no way that we can provide an absolute statement as to how a court will construe the claims of a patent, or how a fact finder (which could be a judge or a jury) may determine whether a product or method infringes one or more claims of a patent. This uncertainty is

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930 Appendix B Sample Outline of Noninfringement Opinion due to many factors, including: (a) the composition and biases of the juries of laypeople; (b) the nature of the evidence that is considered by the fact finder; (c) the credibility of witnesses, both fact and expert, whose testimony may be considered by the fact finder; and (d) the constantly changing and evolving nature of U.S. law. These and other factors inherent in U.S. law, including the jury system, may result in an outcome that is different from our conclusions. Our opinions are based upon how a court or finder of fact should decide the issues presented, based on the facts described herein and the law discussed herein as of the date of this opinion.

III. Summary of the Opinion It is our opinion that a reasonable court of competent jurisdiction should hold that no claims of the ’919 patent would be infringed by making, using, selling or offering to sell in the United States, or importing into the United States, the Anvil Technology, as described herein. More specifically, it is our opinion that a reasonable court should hold that none of claims 1–15 of the ’919 patent would be infringed literally or under the doctrine of equivalents by making, using, selling or offering to sell in the United States, or importing into the United States, the Anvil Technology, as described herein.

IV. U.S. Patent No. 9,191,919 U.S. Patent No. 9,191,919 was issued to Coyote on August 14, 2002, and according to U.S. Patent Office records is assigned to Open Road Anvils, Inc. The priority date of the ’919 patent is November 11, 1992, the filing date of the U.S. patent application from which the ’919 patent issued. No priority applications are claimed for the ’919 patent. The ’919 patent discusses and claims lightweight of anvils for use in the cartoon industry. The ’919 patent has 15 claims, including two independent claims, claims 1 and 10. Certain individual claims of the ’919 patent are discussed in detail below. A representative claim, claim 1, is as follows: 1. An anvil for cartoon use, comprising: (a) an anvil-shaped plastic inner body, having an upper elongated portion having two opposing ends, wherein one end is horn-shaped and the other end is rectangular-shaped; and

Appendix B Sample Outline of Noninfringement Opinion (b) a laminate disposed substantially over the outer surface of said anvil-shaped plastic inner body, wherein said laminate has the appearance of steel.

V. Applicable Legal Principles [In this section, one explains the relevant law of patent infringement. For noninfringement analyses and opinions, one must include a discussion of the law of claim construction (see Chapter 2). This should include a general discussion of the law, and a discussion of the law of any specific claim construction issues applicable to the analyses and opinions. This would include, if applicable, a discussion of the law of claim construction for means-plus-function claims, product-by-process claims, or claims having unusual transition phrases such as consisting essentially of (see Chapter 2). For noninfringement, one should include a discussion of the general process of determining infringement by comparing the objectively construed claims with the potentially infringing product or process (see Chapters 2–5), the general law of literal infringement (see Chapter 3), the general law of infringement under the doctrine of equivalents, including a discussion of limitations on the doctrine, such as prosecution history estoppel (see Chapter 4), and the burden of proof (see Chapters 2–5). One should also include a discussion of the law of any specific infringement issues applicable to the analyses and opinions, for example and if applicable: infringement of means-plus-function claims, infringement of product-by-process claims, or indirect infringement (see Chapters 2–5).]

VI. The Anvil Technology [For infringement evaluations and opinions, the potentially infringing subject matter (often, a client’s proposed commercial subject matter) should be described in thorough and precise detail. This is a critically important aspect of a noninfringement opinion. Because determining infringement (or lack thereof) is highly fact-dependent, all critical aspects of a potentially infringing technology must be described accurately and in detail in the opinion. Further, this description of the technology should be verified with the client for accuracy and completeness if opining on noninfringement of a client’s technology. This importance of this section of a noninfringement opinion cannot be overstated. For example, if the opinion is to be used to avoid a finding of willful infringement, the technology described and analyzed in the opinion

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932 Appendix B Sample Outline of Noninfringement Opinion must match the commercial technology on which the client may be sued for patent infringement. If the technology in the noninfringement opinion does not match the commercial technology of an infringement suit, an accused infringer may not be able to rely on the opinion to avoid a finding of willful infringement. For these reasons, this section should repeat the disclaimer that the opinion is strictly limited to an evaluation and opinion of noninfringement of the technology exactly as defined herein. If printed materials (e.g., brochures of the commercial technology) accurately describe the technology, one may include copies of such material as an appendix to the opinion.] For example . . . This opinion is strictly limited to the express definition of the Anvil Technology below. This opinion does not apply to any subject matter that differs from the Anvil Technology as defined below. For purposes of this opinion, the Anvil Technology is an anvil that is made of a plastic inner portion covered by a laminate having the appearance of steel. Further, the anvil has an upper elongated portion having two opposing ends, wherein both ends are of identical shape. Specifically, both ends of the upper elongated portion are horn-shaped. Etc. . . .

VII. Level of One of Ordinary Skill in the Art, and Assistance Regarding the Views and Understanding of Same at the Time of the Invention [In this section, one defines the objective person of ordinary skill in the relevant art at the time the claimed invention of the patent was made, which is presumed to be the patent’s priority filing date. Determining the level of skill of one of ordinary skill in the art is a fact-based inquiry that may be made by consulting individuals such as those at the company who work in the relevant art and did so at the time of the invention claimed in the patent. Additionally, this section describes the background of the individual (or individuals) relied upon in the opinion as representing the views and understandings of one of ordinary skill in the relevant art at the time of the invention. For example, this individual is relied on in claim construction for explaining how one of ordinary skill in the art would have understood the claim terms at the relevant date. If the individual is of a level of skill that is greater than the level of one of ordinary skill in the art, the opinion must explain how the individual is qualified to opine on the understanding of one of

Appendix B Sample Outline of Noninfringement Opinion ordinary skill in the art. This may be done, for example, by explaining that while the individual was of a higher skill level than one of ordinary skill in the art at the relevant date, the individual is capable of opining on the views and understanding of one of ordinary skill in the art at that time because the individual routinely worked with or supervised individuals who were of ordinary skill in the art at the relevant date. Also, a person who is of above the level of ordinary skill in the art at the time of the opinion may be capable of opining on the views and understanding of one of ordinary skill in the art at the date of the invention, because at that time the individual was one of ordinary skill in the art. Additionally, it can be helpful to engage an individual who is not associated with the company procuring the opinion and who does not stand to benefit in any manner from the outcome of any issues related to the opinion to opine as to one of skill in the art. Further, it is important to state in this section of the opinion any relationship (or lack thereof) between the individual relied upon for expressing the views and understanding of one of ordinary skill in the art and the company procuring the opinion. Again, it is important to note the appropriate date on which one is determining the ordinary level of skill in the art. This is the date when the invention of the patent was made, which is presumed to be the priority filing date of the patent.] For example . . . We have consulted with Mr. Warn Earl Brothers of Monument Valley Anvil Works as to the understanding of one of ordinary skill in the art related to the ’919 patent on the date on which the invention of the ’919 patent was made, which is presumed to be the priority filing date of the ’919 patent, November 11, 1992. Mr. Brothers is currently Director of Anvil Aeronautics Research at Monument Valley Anvil Works. Mr. Brothers received a B.S. degree in Anvil Sciences from C. Toon Industrial University in 1988 and has worked in the anvil industry since that time. In November 1992, Mr. Brothers was an Anvil Technician II at Monument Valley Anvil Works. Mr. Brothers joined Monument Valley Anvil Works upon graduation from college in 1988, and has been with the company since that time. We understand from Mr. Brothers that the person of ordinary skill in the art related to the claims of the ’919 patent in November 1992 was a person working full time in anvil research, having a B.S. degree in Anvil Sciences or its equivalent, with from three to five years of full-time experience in anvil research. We understand that Mr. Brothers is qualified to opine as to the understanding of one of ordinary skill in the art relating to the claims of the ’919 patent in November 1992 because Mr. Brothers was one of ordinary skill in the relevant art at that time, having received his B.S. in Anvil Sciences in 1988, and, in November 1992, working full time in anvil research, and having four years of fulltime experience in anvil research.

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Appendix B Sample Outline of Noninfringement Opinion It is our understanding that Monument Valley Anvil Works has no relationship with Acme, and that Mr. Brothers has no relationship with Acme other than consulting with the attorneys who prepared this opinion and receiving a consulting fee for services related to this opinion. We understand from Mr. Brothers that he has no interest, financial or otherwise, in Acme, Open Road Anvils, Inc., or in the outcome of any of the issues addressed herein. Etc. . . .

VIII. Noninfringement Analysis A. Claim Construction [In this section, the claims are construed. This section should follow the claim construction law described in Chapter 2, including properly applying the appropriate evidence, and other requirements for competent claim construction. This includes describing all evidence used to determine a claim term’s construction. Where evidence from the patent’s prosecution history is especially illuminating, one should consider attaching copies of the relevant portions of the prosecution history as an appendix to the opinion. This is also where one would discuss and address any specific claim construction issues of relevance to the particular claims, for example, issues specific to meansplus-function claims or product-by-process claims.] For example . . . an anvil-shaped plastic inner body, having an upper elongated portion having two opposing ends, wherein one end is horn-shaped and the other end is rectangular-shaped For purposes of this analysis and opinion, it is our opinion that a reasonable court should construe the claim term “an anvil-shaped plastic inner body, having an upper elongated portion having two opposing ends, wherein one end is horn-shaped and the other end is rectangular-shaped” to mean an anvil-shaped inner body having an upper elongated portion having two opposing ends, wherein one end is horn-shaped and the opposite end is rectangular-shaped, and excluding anvils having an upper elongated portion having identical ends. First, we understand from Mr. Brothers that this is the meaning that the claim terms would have had to one of ordinary skill in the relevant art at the time of the invention of the ’919 patent, November 1992.

Appendix B Sample Outline of Noninfringement Opinion Further, this meaning is consistent with the drawing and description of anvils in the ’919 patent. For example, figure 1 of the ’919 patent, which is described in column 12, lines 50–62 of the ’919 patent, shows a plastic anvil-shaped inner body having an upper elongated portion (labeled 4 in figure 1) and having two opposing ends. The ends of the upper elongated portion have different shapes. One end of the upper elongated portion (the left side end as shown in figure 1 and labeled 6) is horn-shaped. The other end (the right side end as shown in figure 1 and labeled 8) has a rectangularshaped end. This is described in the specification of the ’919 patent as follows (in column 12, lines 2–22): FIG. 1 shows the anvil (2) of the instant invention. Upper elongated portion (4) of the anvil (2) has two opposing ends (6 and 8), that each have different shapes. One end, labeled 6 in FIG. 1, is horn-shaped, such that the end of the upper section tapers to a pointed ending (9). The other end, labeled 8 in FIG. 1, has a rectangular-shaped ending, such that the end has the shape of the end of a rectangle, i.e., as shown in FIG. 1, it has two right angles and a flat, straight end that is at 90 degrees relative to the axis of the upper elongated portion (4). It is necessary to the instant invention that the upper elongated portion (4) have dissimilar opposing ends (6 and 8) in order for the anvil of the instant invention to serve its function in cartoons, which is to provide an upper end having both a pointed ending and a rectangular-shaped ending such that a cartoon character can simultaneously impale one cartoon character with the pointed end and bludgeon another character with the rectangular shaped end, as shown in FIG. 2. No language or drawings anywhere in the ’919 patent or its prosecution history indicate that the claims are broader than the disclosure in the patent. Still further, the patent expressly teaches it is necessary that the upper elongated portion of the anvil have dissimilar opposing ends (6 and 8) in order for the anvil of the instant invention to serve its function in cartoons. For example, the patent states: “It is necessary to the instant invention that the upper elongated portion (4) have dissimilar opposing ends (6 and 8) in order for the anvil of the instant invention to serve its function in cartoons . . . an upper end having both a pointed ending and a rectangular-shaped ending such that a cartoon character can simultaneously impale one cartoon character with the pointed end and bludgeon another character with the rectangular shaped end, as shown in FIG. 2.” (column 12, line. 10–15, emphasis added). Additionally, during prosecution of the application that issued as the ’919 patent, this claim limitation originally read: “an anvil-shaped plastic inner body, having an upper portion having two opposing ends.”

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Appendix B Sample Outline of Noninfringement Opinion In an Office Action dated November 11, 1996 (p. 4), the Examiner rejected the claims as anticipated by Never-Caught 1972 PNAS, which discloses light weight laminated anvils having plastic cores having identical opposing ends on upper elongated portions. Specifically, Never-Caught 1972 PNAS discloses two different anvils, each having an upper elongated portion made of light weight plastic covered by laminate having identical opposing ends. One anvil has identical ends on the upper elongated portion that are horn-shaped. The other anvil has identical ends on the upper elongated portion that are rectangular-shaped. To overcome the rejection, the applicants added the language “wherein one end is horn-shaped and the other end is rectangular-shaped,” so that the first limitation of claim 1 read as it now does: “an anvil-shaped plastic inner body, having an upper elongated portion having two opposing ends, wherein one end is horn-shaped and the other end is rectangular-shaped” (see Response to Office Action dated March 11, 1997, pg. 2). Further, the applicants expressly represented to the Examiner that the upper elongated portion of the claimed anvil had to have dissimilar ends, with one end being horn-shaped and the opposite end being rectangular-shaped. (Amendment and Response Dated March 11, 1997, p. 4, emphasis in original). The claimed (as currently amended) invention does not have identical opposing ends on the upper elongated portion like the cited art (NeverCaught 1972 PNAS). It must have dissimilar ends, specifically wherein one end is horn-shaped and the opposite end is rectangular-shaped. The claimed dissimilar ends, wherein one end must be horn-shaped and the other end must be rectangular-shaped, are necessarily required, as explained in the specification and shown in FIG. 2, so that a single anvil can be used to simultaneously impale a character with the pointed end and bludgeon another character with the rectangular shaped end. Therefore, unlike the two anvils disclosed in Never-Caught 1972 PNAS, the amended claims do not cover anvils having plastic upper elongated portions having identical ends, including those of NeverCaught 1972 PNAS wherein in one anvil both ends of the upper elongated portion are rectangular and in the other anvil both ends of the upper elongated portion are horn-shaped. Therefore, in light of the above evidence, including the plain meaning of the terms to one of ordinary skill in the relevant art at the time of the invention, the clear disclosure in the specification, and the amendment and clear assertions to the U.S. Patent Office in the prosecution history, it is our opinion that a reasonable court should hold that the claim term “an anvil-shaped plastic inner body, having an upper elongated portion having two opposing ends, wherein one end is horn-shaped and the other end is rectangularshaped” means an anvil-shaped inner body having an upper elongated portion having two opposing ends, wherein one end is horn-shaped and the other end

Appendix B Sample Outline of Noninfringement Opinion is rectangular-shaped, and excludes anvils having an upper elongated portion having identical opposing ends, such as two horn-shaped ends. Etc. . . .

B. Noninfringement [This section addresses noninfringement. As discussed in Chapters 3 and 4, claims must first be evaluated for literal infringement. If there is no literal infringement, then they must be evaluated for infringement under the doctrine of equivalents. Noninfringement should be examined by comparing the objectively construed claims with the potentially infringing product or process. Unlike invalidity determinations, in which each claim must be individually addressed regardless of the fate of the other claims, in an infringement analysis if a claim from which other claims depend (such as an independent claim) is found to not be infringed, the dependent claims from the noninfringed claim cannot be infringed by law. Therefore, if one determines that a patent’s independent claims are not literally infringed or infringed under the doctrine of equivalents, there is no need to review the dependent claims in order to conclude that none of the patent’s claims are infringed by the same technology.] For example . . . For the reasons discussed below, it is our opinion that a reasonable court should hold that no claims of the ’919 patent would be infringed by the Anvil Technology as described herein. As discussed below, we determine that a reasonable court should hold that neither of the ’919 patent’s independent claims, claims 1 and 10, are infringed by the Anvil Technology. Therefore, we only evaluate infringement of independent claims 1 and 10. As discussed in Section V, if an independent claim is not infringed, the claims from which it depends cannot be infringed by the same subject matter.

1. No Literal Infringement For the reasons discussed below, it is our opinion that a reasonable court should hold that independent claim 1 of the ’919 patent would not be literally infringed by the Anvil Technology as described herein. Claim 1 of the ’919 patent reads as follows: 1. An anvil for cartoon use, comprising: (a) an anvil-shaped plastic inner body, having an upper elongated portion having two opposing ends, wherein one end is horn-shaped and the other end is rectangular-shaped; and

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938 Appendix B Sample Outline of Noninfringement Opinion (b) a laminate disposed substantially over the outer surface of said anvil-shaped plastic inner body, wherein said laminate has the appearance of steel. It is our opinion that a reasonable court should hold that claim 1 of the ’919 patent would not be literally infringed by the Anvil Technology as discussed herein because the Anvil Technology fails to at least meet the limitation of claim 1 that the upper elongated portion of the anvil have opposing ends that are not identical, but where one end is horn-shaped and the other end is rectangular-shaped. As described in Section VI, the anvil of the Anvil Technology has an upper, elongated portion having two opposing ends, wherein both ends are of identical shape. Specifically, both ends of the upper, elongated portion are horn-shaped. As construed in Section IX[A] above, it is our opinion that a reasonable court should hold that the limitation of claim 1 of an anvil “having an upper elongated portion having two opposing ends, wherein one end is horn-shaped and the other end is rectangular-shaped” means an anvil having an upper elongated portion having two opposing ends, wherein one end is horn-shaped and the other end is rectangular-shaped, and specifically excludes an anvil an upper elongated portion having two opposing ends that are identical. It is, therefore, our opinion that a reasonable court should hold that the Anvil Technology would not literally infringe claim 1 of the ’919 patent because the claim literally requires an anvil having an “upper elongated portion having two opposing ends, wherein one end is horn-shaped and the other end is rectangular-shaped,” and as discussed above for claim construction (Section IX[A]) during prosecution of the application that issued as the ’919 patent, the patentees: (a) amended the claims to remove subject matter that would literally have covered anvils having an upper elongated portion having opposing ends that are identical, including two horn-shaped ends, like the Anvil Technology; and (b) expressly represented to the U.S. Patent Office that their claimed invention does not cover an anvil having an upper elongated portion having two opposing, identical ends, including two ends that are horn-shaped. As discussed in Section V above, when a patent application expressly represents to the U.S. Patent Office what its claimed invention is not, subject matter falling within the disclaimed subject matter cannot literally infringe. Etc. . . . For example . . .

2. No Infringement Under the Doctrine of Equivalents For the reasons discussed below, it is our opinion that a reasonable court should hold that claim 1 of the ’919 patent is not infringed under the doctrine of equivalents by the Anvil Technology as described herein.

Appendix B Sample Outline of Noninfringement Opinion Claim 1 is shown and discussed above under literal infringement (and construed in detail in Section VIII[A]). The claim requires an upper elongated portion having non-identical opposing ends with one end being horn-shaped and the other end being rectangular-shaped. Additionally, as discussed above for literal infringement (and as discussed in detail in Section IV), the anvil of the Anvil Technology has an upper elongated portion having two opposing ends, wherein both ends are of identical shape. Specifically, both ends of the upper elongated portion of the Anvil Technology are horn-shaped. As discussed above, during prosecution of the application that issued as the ’919 patent, the limitation of claim 1 of an anvil having an upper elongated portion having two opposing ends, “wherein one end is horn-shaped and the other end is rectangular-shaped,” was added during prosecution, in order to overcome a prior art rejection (Never-Caught 1972 PNAS) that disclosed two different anvils having upper elongated portions having two opposing, identical ends. One anvil has two horn-shaped ends and the other anvil has two rectangular-shaped ends. (see Office Action dated November 11, 1996, p. 4). To overcome the rejection, the applicants added the language “wherein one end is horn-shaped and the other end is rectangular-shaped,” so that the first limitation of claim 1 read as it now does: “an anvil-shaped plastic inner body, having an upper elongated portion having two opposing ends, wherein one end is horn-shaped and the other end is rectangular-shaped” (see Response to Office Action Dated March 11, 1997, p. 2). Further, the applicants expressly represented to the Examiner that the upper elongated portion of the claimed anvil had to have dissimilar ends, with one end being horn-shaped and the opposite end being rectangular-shaped. (Amendment and Response Dated March 11, 1997, p. 4, emphasis in original): The claimed (as currently amended) invention does not have identical opposing ends on the upper elongated portion like the cited art (NeverCaught 1972 PNAS). It must have dissimilar ends, specifically wherein one end is horn-shaped and the opposite end is rectangular-shaped. The claimed dissimilar ends, wherein one end must be horn-shaped and the other end must be rectangular-shaped, are necessarily required, as explained in the specification and shown in FIG. 2, so that a single anvil can be used to simultaneously impale a character with the pointed end and bludgeon another character with the rectangular-shaped end. Therefore, unlike the two anvils disclosed in Never-Caught 1972 PNAS, the amended claims do not cover anvils having upper elongated portions having identical ends, including those of Never-Caught 1972 PNAS wherein in one anvil both ends of the upper elongated portion are rectangular and in the other anvil both ends of the upper elongated portion are horn-shaped. As discussed in Section V, narrowing amendments to overcome prior art rejections create a presumption that the surrendered subject matter cannot be

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Appendix B Sample Outline of Noninfringement Opinion captured under the doctrine of equivalents. Amendment-based estoppel may be rebutted upon a showing that: (a) the alleged equivalent was unforeseeable at the time of the narrowing amendment; (b) the rationale underlying the amendment bore no more than a tangential relationship to the accused equivalent; or (c) there was “some other reason” the patentee could not reasonably have been expected to describe the alleged equivalent. It is our opinion that a reasonable court should hold that these rebuttals to the above-described amendment-based estoppel to claim 1 of the ’919 patent should not apply. First, the potential equivalent was clearly foreseeable at the time of the amendment because it was disclosed in the prior art that caused the narrowing amendment (Never-Caught 1972 PNAS). Second, the basis for the amendment was to overcome the rejection based on the prior art disclosing the accused equivalent. Thus, the rationale for the narrowing amendment was directly related to the accused equivalent. Lastly, there is not “some other reason” why the patentee could not reasonably have been expected to describe the alleged equivalent because, again, the alleged equivalent (an anvil having an upper elongated portion having two opposing ends wherein both ends are horn-shaped) was described in the prior art that the applicants expressly amended the claims to not cover. Thus, it is our opinion that a reasonable court should hold that due to unrebuttable amendment-based estoppel, the ’919 patentees cannot assert that the Anvil Technology as described herein infringes claim 1 under the doctrine of equivalents. Moreover, in addition to amendment-based estoppel discussed above, Section V discusses argument-based estoppel. Under such, a patentee cannot claim subject matter under the doctrine of equivalents that it represented to the Patent Office was not within the scope of its claimed invention. As discussed above for claim construction (Section VIII[A]), the patentees clearly represented to the U.S. Patent Office that anvils having an upper portion having identical ends, including having identical horn-shaped ends as in the Anvil Technology, were not within the scope of the claimed invention. Therefore, it is our opinion that a reasonable court should hold that the Anvil Technology would not infringe claim 1 under the doctrine of equivalents because the patentees clearly represented to the U.S. Patent Office that their invention does not include anvils like the Anvil Technology. Thus, for the reasons discussed above, it is our opinion that a reasonable court should hold that the Anvil Technology as described herein would not infringe claim 1 of the ’919 patent under the doctrine of equivalents because, and separately: (a) under amendment-based estoppel, the patentees surrendered the subject matter of the Anvil Technology during prosecution, and cannot rebut the presumption of surrender; and (b) under argument-based estoppel, the patentees clearly represented to the Patent Office that claim 1 of the ’919 patent does not cover the Anvil Technology. Etc. . . .

Appendix B Sample Outline of Noninfringement Opinion

IX. Conclusions Based on the above analysis, it is our opinion that a reasonable court of competent jurisdiction should hold that no claims of the ’919 patent would be infringed, literally or under the doctrine of equivalents, by making, using, selling or offering to sell in the United States, or importing into the United States, the Anvil Technology, as described herein. The opinions and statements expressed herein are for the sole benefit of and may be relied upon by Acme. The opinions and statements set forth herein are not to be relied upon by another person or entity for any purpose. Very truly yours,

_____________________________ Date

Law & Firm, L.L.P.

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APPENDIX

C Sample Outline of Invalidity Opinion

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Confidential, Attorney-Client Privileged, and Attorney Work Product1

INVALIDITY OPINION RENDERED FOR ACME WIDGETS, INC. REGARDING U.S. PATENT 9,191,191 AUGUST 14, 2012 Law & Firm, L.L.P. 122 Main Street, Suite 7200 Big City, Small State 81818 (123) 555–5555

This is a confidential document of Acme Widgets, Inc. (“Acme”) and has been prepared by Acme’s attorneys. The document contains and is essentially based on confidential communications between Acme and its attorneys. The document also contains the mental impressions, conclusions, and legal theories of Acme’s attorneys. Only Acme and its authorized personnel and attorneys are entitled to have possession of this document. Its contents are privileged and should neither be transmitted to nor shared with any third party.

LAW & FIRM, L.L.P.

1. The header of every page of an opinion should clearly state “Confidential, AttorneyClient Privileged, and Work Product” (this is omitted from this Appendix solely for purposes of increasing the clarity of this illustration—this language should always be on every page of an actual opinion).

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Appendix C Sample Outline of Invalidity Opinion I. Privileged Status of this Opinion

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VI. The Prior Art

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A. Roadrunner 1986 Nature

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B. Coyote 1988 Science

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VII. Level of One of Ordinary Skill in the Art, and Assistance Regarding the Views and Understanding of Same at the Time of the Invention VIII. Invalidity Analysis

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B. Invalidity

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1. Claims 1–4 and 7–15 Are Anticipated Under Section 102(b) by Roadrunner 1986 Nature a) Claim 1 2. Claim 5 Is Obvious Under Section 103(a) IX. Conclusions APPENDIX A U.S. Patent No. 9,191,919 APPENDIX B Roadrunner 1986 Nature APPENDIX C Coyote 1988 Science

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Appendix C Sample Outline of Invalidity Opinion

I. Privileged Status of this Opinion This document contains attorney-client privileged and work product information. Acme Widgets, Inc. (“Acme”) may find itself in litigation with another entity, and the other entity may try to discover documents such as this opinion. In order to preserve the privileged and non-discoverable status of this and all of our opinions, we advise Acme to maintain the confidentiality of this opinion and to limit its distribution to those persons who participate substantially in decisions regarding action to be taken based on our legal advice. The information contained herein is not intended for use by any person or entity other than Acme.

II. Nature of Commission We have been commissioned by Acme to analyze and opine as to whether a reasonable court of competent jurisdiction in the United States should hold that any claims of United States Patent 9,191,919 (“the ’919 patent”) (Appendix A) are invalid. This opinion is limited to an analysis of the claims of U.S. Patent No. 9,191,919. This analysis and the opinions expressed herein are based on U.S. federal patent law as set forth primarily in 35 U.S.C. §§ 1—307 and court opinions as specified below interpreting same. A summary of the relevant law is given herein in Section V. This analysis and the opinions herein are expressly limited as follows: (i)

All opinions expressed herein are based on U.S. Patent No. 9,191,919, and not on any other patents, including any patents issuing from applications related to the ’919 patent. Unless specifically directed by Acme and accepted by us in the future, we will not undertake supplementing of this investigation and the opinions expressed herein, even if additional patents should come to our attention, including patents issuing from applications related to the ’919 patent; (ii) All opinions expressed herein are based solely on U.S. federal patent law as of the date hereof, and not as of any other date. Unless specifically directed by Acme and accepted by us in the future, we will not undertake supplementing of the analyses and the opinions expressed herein, even if changes in the law occur that could affect such analyses and opinions; (iii) We make no analyses or opinions under any laws other than the U.S. federal law discussed herein, and we make no analyses or

Appendix C Sample Outline of Invalidity Opinion opinions of any non-U.S. patent rights, including any non-U.S. patents or patent applications related to the ’919 patent. Any analyses and opinions based on non-U.S. law or non-U.S. patent rights should be obtained by Acme from competent legal counsel duly registered in the relevant countries; (iv) In the interest of conciseness, not all positions of invalidity are necessarily set forth herein. For example, we may discuss only certain positions of invalidity herein. However, this does not necessarily mean that we do not have other positions that are equally as strong. Therefore, this analysis and opinion should not be construed in any manner as a limitation on non-discussed invalidity issues; (v) Due to inherent uncertainties in prior art searching, we can never assert with certainty that we have located all prior art that may be relevant to the ’919 patent; (vi) This document, including its analyses and opinions, was prepared with the understanding that neither this document, nor anything in, or part of, this document, including but not limited to its analyses and opinions, will be submitted to the U.S. Securities and Exchange Commission (“SEC”), or used in, or in association with, any submissions, reports, disclosures, and the like, in any manner associated with SEC laws or regulations. Moreover, we do not represent Acme before the SEC, nor do we represent or advise Acme in connection with any SEC-related matters. Therefore, neither this opinion nor any of its contents, including but not limited to its analyses and opinions, have been prepared in the representation of Acme in any SEC-related matters; and (vii) Nothing herein shall be construed to cause us to be considered “experts” within the meaning of Section 11 of the Securities Act of 1933, as amended. In rendering these opinions, we have analyzed the issue of validity of the claims of the ’919 patent. Realistically, there is no way that we can provide an absolute statement as to how a court will construe the claims of a patent, how a court will decide legal issues related to claim validity, or how a fact finder (which could be a judge or a jury) may determine factual issues related to claim validity. This uncertainty is due to many factors, including: (a) the composition and biases of the juries of laypeople; (b) the nature of the evidence that is considered by the fact finder; (c) the credibility of witnesses, both fact and expert, whose testimony may be considered by the fact finder; and (d) the constantly changing and evolving nature of U.S. law. These and other factors inherent in U.S. law, including the jury system, may result in an outcome that is different from our conclusions. Our opinions are based upon

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Appendix C Sample Outline of Invalidity Opinion how a court or finder of fact should decide the issues presented, based on the facts described herein and the law discussed herein as of the date of this opinion. Further, certain issues, including unenforceability and other potential defenses to an infringement allegation, were not considered or relied upon in rendering this opinion because certain facts concerning these issues are not available to us at this time.

III. Summary of the Opinion It is our opinion that a reasonable court of competent jurisdiction should hold that all claims of the ’919 patent are invalid. More specifically, it is our opinion that a reasonable court should hold that claims 1–4 and 7–15 are invalid for being anticipated under 35 U.S.C. § 102(b), and that claims 5 and 6 are invalid for being obvious under 35 U.S.C. § 103(a).

IV. U.S. Patent No. 9,191,919 U.S. Patent No. 9,191,919, was issued to Coyote on August 14, 2002, and, according to U.S. Patent Office records, is assigned to Open Road Anvils, Inc. The priority date of the ’919 patent is November 11, 1992, the filing date of the U.S. patent application from which the ’919 patent issued. No priority applications are claimed for the ’919 patent. The ’919 patent discusses and claims lightweight of anvils for use in the cartoon industry. The ’919 patent has 15 claims, including two independent claims, claims 1 and 10. Certain individual claims of the ’919 patent are discussed in detail below. A representative claim, claim 1, is as follows: 1. An anvil for cartoon use, comprising: (a) an anvil-shaped plastic inner body, having an upper elongated portion having two opposing ends, wherein one end is horn-shaped and the other end is rectangular-shaped; and

Appendix C Sample Outline of Invalidity Opinion (b) a laminate disposed substantially over the outer surface of said anvil-shaped plastic inner body, wherein said laminate has the appearance of steel.

V. Applicable Legal Principles [In this section, one explains the relevant law of patent validity. For invalidity analyses and opinions, one must include a discussion of the law of claim construction (see Chapter 2). This should include a general discussion of the law, and a discussion of the law of any specific claim construction issues applicable to the analyses and opinions. This would include, for example and if applicable, a discussion of the law of claim construction for means-plusfunction claims, product-by-process claims, or claims having unusual transition phrases such as “consisting essentially of” (see Chapter 2). For invalidity, one should include a discussion of the general process of determining validity of a patent’s claims by comparing the objectively construed claims with the prior art, for art-based invalidity such as anticipation and obviousness (see Chapters 6–8); or the objectively construed claims with the specification, for specification-based invalidity such as enablement and written description (see Chapter 9). This should also include a discussion of the general law of anticipation (see Chapters 6 and 7); the general law of obviousness, including a discussion of the general process for determining obviousness, including the Graham factors, the KSR Supreme Court case, and evidence of nonobviousness including secondary considerations (see Chapter 8); and the general law of enablement and written description (see Chapter 9). One should also include a discussion of the presumption of validity of the claims of issued U.S. patents and the burden of proof for invalidity (see Chapters 6–9). Finally, one should include a discussion of the law of any specific invalidity issues applicable to the analyses and opinions, for example and if applicable, enablement of anticipatory references (see Chapters 6 and 7), inherent anticipation (see Chapters 6 and 7), and best mode (see Chapter 9).]

VI. The Prior Art [For invalidity evaluations and opinions, the prior art is described in detail in this section. It is important that the description of the prior art include all aspects on which the opinion relies. This section should also qualify the prior

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Appendix C Sample Outline of Invalidity Opinion art under Section 102. For example, if the prior art is a printed publication under 35 U.S.C. § 102(b), one must show that the printed publication was publicly available more than one year before the effective priority date of the patent being evaluated (see Chapter 6). If the date of the reference is not clearly apparent from the face of the reference, this section should describe how the date was determined and verified. Any supporting information (such as a declaration by a librarian as to the date the reference was publicly available) should accompany the opinion as an appendix. One should also report the effective priority date of the patent being analyzed for invalidity. If it is necessary to prove a priority date that is later than the earliest claimed date of the patent (e.g., if the patent has a priority claim to earlier application to which it is related as a continuation-in-part, and the opinion concludes that the patent is not entitled to the priority date of the earlier application), this analysis should be described in this section. It is also important to note in this section whether the prior art reference was considered by the U.S. Patent Office during the prosecution history of the patent. As discussed in Chapter 6, if a reference was considered by the Patent Examiner during the prosecution history of the patent being analyzed, the burden of proof remains on the party asserting invalidity to do so by clear and convincing evidence. However, the Federal Circuit has held that the burden of proving invalidity “becomes particularly heavy”2 when a reference was considered by the Patent Examiner in the prosecution of a patent’s application in the U.S. Patent Office. If the prior art is printed material, copies should be accompany the opinion as an appendix.] For example . . .

A. Roadrunner 1986 Nature The article “Lightweight, Inexpensive Anvils for Use in Cartoons,” Road Runner, 1986, Nature, 123:392–426 (“Roadrunner 1986 Nature”) was published August 14, 1986. The priority date of the ’919 patent is November 11, 1992, the filing date of the U.S. patent application that issued as the ’919 patent. No priority applications were claimed for the ’919 patent. Therefore, Roadrunner 1986 Nature is prior art to the ’919 patent under Section 102(b) as a printed publication available more than one year before the priority date of the ’919 patent. As discussed in Section V above, prior art under Section 102(b) is available both for purposes of proving anticipation of claimed subject matter under Section 102(b) as well as for proving

2. Impax Labs., Inc. v. Aventis Pharms. Inc., 545 F.3d 1312, 1314 (Fed. Cir. 2008).

Appendix C Sample Outline of Invalidity Opinion obviousness under Section 103(a). A copy of Roadrunner 1986 Nature is attached as Appendix B. The Roadrunner 1986 Nature reference was not considered during prosecution of the application that issued as the ’919 patent, and is not listed on the face of the patent. Roadrunner 1986 Nature discloses a lightweight, inexpensive anvil for use in cartoons. The anvil is lightweight and inexpensive due to the use of an anvil-shaped inner core made of plastic that is overlaid by a laminate that has the appearance of steel. Specifically, figure 3a shows an anvil-shaped inner body made of plastic, having an upper elongated portion having two opposing ends, wherein one end is horn-shaped and the other end is rectangular-shaped. Further, page 4, lines 10–20 explain that figure 3a shows an anvil-shaped plastic inner body having an upper elongated portion having two opposing ends, wherein one end is horn-shaped and the other end is rectangular-shaped. Figure 3b shows the above described an anvil-shaped plastic inner body covered with a laminate disposed over the outer surface of the anvil-shaped inner body, wherein the laminate has the appearance of steel. Further, page 4, lines 20–42 explain that figure 3b shows an anvil-shaped inner body made of plastic, having an upper elongated portion having two opposing ends, wherein one end is horn-shaped and the other end is rectangular-shaped, covered with a laminate, wherein the final coated anvil has the appearance of being made of solid steel. Additionally, on page 4, lines 32–33, the reference states, “To save money, and to make the anvil lighter in weight, the inner body of the anvil is shaped like the final version, but is made of plastic. A lightweight laminate having the appearance of steel is then applied over the inner body. This produces an anvil having the appearance of being made of solid steel.”

B. Coyote 1988 Science The article “Lightweight, Inexpensive Anvil With Handles for Use in Cartoons,” Coyote, 1986, Science 345:1107–1140 (“Coyote 1988 Science”) was published in September 1986. The priority date of the ’919 patent is November 11, 1992, the filing date of the U.S. patent application that issued as the ’919 patent. No priority applications were claimed for the ’919 patent. Therefore, Coyote 1988 Science is prior art to the ’919 patent under Section 102(b) as a printed publication available more than one year before the priority date of the ’919 patent. As discussed in Section V above, prior art under Section 102(b) is available both for purposes of proving anticipation of claimed subject matter under Section 102(b) as well as for proving obviousness under Section 103(a). A copy of Coyote 1988 Science is attached as Appendix C.

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Appendix C Sample Outline of Invalidity Opinion The Coyote 1988 Science reference was not considered during prosecution of the application that issued as the ’919 patent, and it is not listed on the face of the patent. Coyote 1988 Science discloses a lightweight, inexpensive anvil for use in cartoons, wherein the anvil has handles on opposite sides of its base for easy handling. The anvil is lightweight and inexpensive due to the use of an anvil-shaped inner core made of plastic that is overlaid by a laminate that has the appearance of steel. The anvil is especially adapted for easy handling, such as throwing, strategically dropping, and bludgeoning, by having handles on opposite sides of the base. More specifically, figure 4 shows an anvil-shaped inner body made of plastic, having an upper elongated portion having two opposing identical ends, wherein both ends are identically rectangle-shaped. Further, page 2, lines 15–35 explain that figure 4 shows an anvil-shaped, plastic inner body, having an upper portion having two ends, wherein both ends are identically rectangular-shaped. As discussed below, the figure also shows that the base of the anvil-shaped plastic inner body has handles on opposite sides of the base. Figure 5 shows the above-described anvil-shaped inner body made of plastic, covered with a laminate disposed over the outer surface of the inner body. The laminate has the appearance of solid steel. Therefore, the coated anvil shown in figure 5 has the appearance of a solid steel anvil. As discussed below, figures 4 and 5 also show that the base of the anvil-shaped inner body has handles on opposite sides of the base that are made of the plastic of the inner body, and coated with the laminate. Further, page 3, lines 5–22 explain the lightweight and less expensive aspects of the anvil: Figure 4 shows an anvil-shaped inner body made of plastic, having an upper portion having two opposing ends, wherein each end is rectangular-shaped. Figure 5 shows the inner body covered with a laminate disposed over the outer surface of the plastic inner body, wherein the laminate has the appearance of steel. The anvil is lightweight and inexpensive because it is not made of solid steel. Rather, the anvil is composed of an anvil-shaped plastic inner body to which a laminate is applied to coat substantially all of the plastic inner body. The laminate has the appearance of steel. Thus, the final coated anvil has the appearance of a traditional solid steel anvil, but is lighter, and less expensive to manufacture (see “Lightweight, Inexpensive Anvils for Use in Cartoons,” Road Runner, 1986, Nature, 123:392–426). As explained in the analyses and opinions below, it is significant that Coyote 1988 Science specifically references Roadrunner 1986 Nature as the source of the concept of creating a lightweight, inexpensive anvil for use in cartoons which has an anvil-shaped plastic inner body coated with a laminate that has the appearance of steel.

Appendix C Sample Outline of Invalidity Opinion Additionally, figures 4 and 5 show handles on opposite sides of the base of the anvil-shaped plastic inner body (figure 4) that are coated with the laminate (figure 5). Figure 4 shows that the handles are made of the same plastic as the inner body of the anvil (i.e., figure 4 shows a plastic anvil-shaped inner body having handles on opposite sides of the base, wherein the handles are part of the plastic inner body). Figure 5 shows that the handles are covered with the laminate in the same manner as the entire plastic inner body such that the entire anvil (including the side handles) has the appearance of being made of solid steel. Further, page 3, lines 23–36 of the paper state: The anvil is especially adapted for easy handling, such as throwing, strategically dropping, and bludgeoning, by having handles on opposite sides of the base. Prior to this paper which discloses placing handles on the base of an anvil, lightweight anvils for use in cartoons, such as that disclosed in Roadrunner 1986 Nature, lacked handles. Therefore, it was awkward and potentially dangerous to maneuver the anvils. This was especially the case in desert environments, where high temperatures make grasping an anvil without handles awkward and potentially dangerous. The anvil as disclosed in this paper, having handles on its base, overcomes the problems of anvils without handles for use in cartoons, such as Roadrunner 1986 Nature. The handles on the anvils in this paper allow, for example, cartoon characters to more easily maneuver the anvils so that they may more easily impale and bludgeon other cartoon characters. This includes doing so at high desert temperatures, because a cartoon character need only grasp the anvil of this paper by the handles to maneuver it, rather than trying to grasp the body of the anvils prior to this paper. Thus, the handles represent an improvement in lightweight anvils for use in cartoons, for example by improving the use of such by characters in impaling and bludgeoning one another. Etc. . . .

VII. Level of One of Ordinary Skill in the Art, and Assistance Regarding the Views and Understanding of Same at the Time of the Invention [In this section, one defines the objective person of ordinary skill in the relevant art at the time the claimed invention of the patent was made, which is presumed to be the patent’s priority filing date. Determining the level of skill of one of ordinary skill in the art is a fact-based inquiry that may be made by

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954 Appendix C Sample Outline of Invalidity Opinion consulting individuals such as those at the company who work in the relevant art and did so at the time of the invention claimed in the patent. Additionally, this section describes the background of the individual (or individuals) relied upon in the opinion as representing the views and understandings of one of ordinary skill in the relevant art at the time of the invention. For example, this individual is relied on in claim construction for explaining how one of ordinary skill in the art would have understood the claim terms at the relevant date. If the individual is of a level of skill that is greater than the level of one of ordinary skill in the art, the opinion must explain how the individual is qualified to opine on the understanding of one of ordinary skill in the art. This may be done, for example, by explaining that while the individual was of a higher skill level than one of ordinary skill in the art, at that time the individual is capable of opining on the views and understanding of one of ordinary skill in the art at the relevant date, because the individual routinely worked with or supervised individuals who were of ordinary skill in the art at the relevant date. Also, a person who is of above the level of ordinary skill in the art at the time of the opinion may be capable of opining on the views and understanding of one of ordinary skill in the art at the date of the invention because, at that time the individual was one of ordinary skill in the art. Additionally, it can be helpful to engage an individual who is not associated with the company procuring the opinion, and who does not stand to benefit in any manner from the outcome of any issues related to the opinion, to opine as to one of skill in the art. Further, it is important to state in this section of the opinion any relationship (or lack thereof) between the individual relied upon for expressing the views and understanding of one of ordinary skill in the art and the company procuring the opinion. Again, it is important to note the appropriate date on which one is determining the ordinary level of skill in the art. This is the date when the invention of the patent was made, which is presumed to be the priority filing date of the patent.] For example . . . We have consulted with Mr. Warn Earl Brothers of Monument Valley Anvil Works as to the understanding of one of ordinary skill in the art related to the ’919 patent on the date on which the invention of the ’919 patent was made, which is presumed to be the priority filing date the ’919 patent, November 11, 1992. Mr. Brothers is currently Director of Anvil Aeronautics Research at Monument Valley Anvil Works. Mr. Brothers received a B.S. degree in Anvil Sciences from C. Toon Industrial University in 1988, and has worked in the anvil industry since that time. In November 1992, Mr. Brothers was an Anvil Technician II at Monument Valley Anvil Works. Mr. Brothers joined Monument Valley Anvil Works upon graduation from college in 1988 and has been with the company since that time.

Appendix C Sample Outline of Invalidity Opinion We understand from Mr. Brothers that the person of ordinary skill in the art related to the claims of the ’919 patent in November 1992 was a person working fulltime in anvil research, having a B.S. degree in Anvil Sciences or its equivalent, with from three to five years of full-time experience in anvil research. We understand that Mr. Brothers is qualified to opine as to the understanding of one of ordinary skill in the art relating to the claims of the ’919 patent in November 1992, because Mr. Brothers was one of ordinary skill in the relevant art at that time, having received his B.S. in Anvil Sciences in 1988, and, in November 1992, working full time in anvil research, and having four years of fulltime experience in anvil research. It is our understanding that Monument Valley Anvil Works has no relationship with Acme, and that Mr. Brothers has no relationship with Acme other than consulting with the attorneys who prepared this opinion and receiving a consulting fee for services related to this opinion. We understand from Mr. Brothers that he has no interest, financial or otherwise, in Acme, Open Road Anvils, Inc., or in the outcome of any of the issues addressed herein. Etc. . . .

VIII. Invalidity Analysis A. Claim Construction [In this section, the claims are construed. This section should follow the claim construction law described in Chapter 2, including properly applying the appropriate evidence and other requirements for competent claim construction. This includes describing all evidence used to determine a claim term’s construction. Where evidence from the patent’s prosecution history is especially illuminating, one should consider attaching copies of the relevant portions of the prosecution history as an appendix to the opinion. This is also where one would discuss and address any specific claim construction issues of relevance to the particular claims, such as issues specific to means-plus-function claims or product-by-process claims.] For example . . . an anvil-shaped plastic inner body, having an upper elongated portion having two opposing ends, wherein one end is horn-shaped and the other end is rectangular-shaped For purposes of this analysis and opinion, it is our opinion that a reasonable court should construe the claim term “an anvil-shaped plastic inner body, having an upper elongated portion having two opposing ends, wherein one

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Appendix C Sample Outline of Invalidity Opinion end is horn-shaped and the other end is rectangular-shaped” to mean an anvil-shaped inner body having an upper elongated portion having two opposing ends, wherein one end is horn-shaped and the opposite end is rectangular-shaped. First, we understand from Mr. Brothers that this is the meaning that the claim terms would have had to one of ordinary skill in the relevant art at the time of the invention of the ’919 patent, November 1992. Further, this meaning is consistent with the drawing and description of anvils in the ’919 patent. For example, figure 1 of the ’919 patent, which is described in column 12, lines 50–62 of the ’919 patent, shows a plastic anvil-shaped inner body having an upper elongated portion (labeled 4 in figure 1) and having two opposing ends. The ends of the upper elongated portion have different shapes. One end of the upper elongated portion (the left side end as shown in figure 1 and labeled 6) is horn-shaped. The other end (the right side end as shown in figure 1 and labeled 8) has a rectangularshaped end. This is described in the specification of the ’919 patent as follows (in column 12, lines 2–62): FIG. 1 shows the anvil (2) of the instant invention. Upper elongated portion (4) of the anvil (2) has two opposing ends (6 and 8), that each have different shapes. One end, labeled 6 in FIG. 1, is horn-shaped, such that the end of the upper section tapers to a pointed ending (9). The other end, labeled 8 in FIG. 1, has a rectangular-shaped ending, such that the end has the shape of the end of a rectangle, i.e., as shown in FIG. 1, it has two right angles and a flat, straight end that is at 90 degrees relative to the axis of the upper elongated portion (4). It is necessary to the instant invention that the upper elongated portion (4) have dissimilar opposing ends (6 and 8) in order for the anvil of the instant invention to serve its function in cartoons, which is to provide an upper end having both a pointed ending and a rectangular-shaped ending such that a cartoon character can simultaneously impale one cartoon character with the pointed end and bludgeon another character with the rectangularshaped end, as shown in FIG. 2. Moreover, the addition of handles to the base of the anvil (3) as shown in FIG. 3, which shows the anvil (2) having base (3) with handles (10) on opposing sides of the base (3), aids in the use of the anvil in cartoons, i.e, impaling and bludgeoning other cartoon characters. This is because the handles on the anvil make it easier to maneuver the anvil by cartoon characters for its use in cartoons, as shown in FIG. 4. FIG. 4 shows a cartoon character using the inventive anvil, having opposing handles (10) on the base (3) of the anvil (2), wherein the cartoon character is grasping the anvil by the handles for improved maneuverability of the anvil, for example, in simultaneously impaling

Appendix C Sample Outline of Invalidity Opinion one cartoon character and bludgeoning another. This use of the handles is especially preferred when the anvil is used in high desert temperatures where the surface of the anvil can get very hot. Maneuvering the anvil without handles in these conditions can be dangerous, awkward, and inefficient for its purpose because a character must try to grasp the anvil by its surface, which can be very hot and can lead to dropping the anvil or missing the intended target and potentially impaling or bludgeoning an innocent bystander, such as a cartoon illustrator. The addition of the handles makes maneuvering the anvil much easier, more efficient, and more precise. This is even more so in high desert temperatures, because a character may maneuver the anvil merely by grasping the handles, rather than the surface area of the anvil, thereby decreasing the amount of hot surface area a character must touch on the anvil in order to impale and bludgeon. No language or drawings anywhere in the ’919 patent or its prosecution history indicate that the claims are broader than the disclosure in the patent. Still further, the patent expressly teaches it is necessary that the upper elongated portion of the anvil must have dissimilar opposing ends (6 and 8) in order for the anvil of the instant invention to serve its function in cartoons. For example, the patent states: “It is necessary to the instant invention that the upper elongated portion (4) have dissimilar opposing ends (6 and 8) in order for the anvil of the instant invention to serve its function in cartoons . . . an upper end having both a pointed ending and a rectangular-shaped ending such that a cartoon character can simultaneously impale one cartoon character with the pointed end and bludgeon another character with the rectangular shaped end, as shown in FIG. 2.” (column 12, lines 10–15). Additionally, during prosecution of the application that issued as the ’919 patent, this claim limitation originally read: “an anvil-shaped plastic inner body, having an upper portion having two opposing ends.” In an Office Action dated November 11, 1996 (p. 4), the Examiner rejected the claims as anticipated by Never-Caught 1972 PNAS, which discloses light weight laminated anvils having plastic cores having identical opposing ends on upper elongated portions. Specifically, Never-Caught 1972 PNAS discloses two different anvils, each having an upper elongated portion made of light weight plastic covered by laminate having identical opposing ends. One anvil has identical ends on the upper elongated portion that are horn-shaped. The other anvil has identical ends on the upper elongated portion that are rectangular-shaped. To overcome the rejection, the applicants added the language “wherein one end is horn-shaped and the other end is rectangular-shaped,” so that the first limitation of claim 1 read as it now does: “an anvil-shaped plastic inner body, having an upper elongated portion having two opposing ends, wherein

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Appendix C Sample Outline of Invalidity Opinion one end is horn-shaped and the other end is rectangular-shaped” (see Response to Office Action dated March 11, 1997, p. 2). Further, the applicants expressly represented to the Examiner that the upper elongated portion of the claimed anvil had to have dissimilar ends, with one end being horn-shaped and the opposite end being rectangular-shaped. (Amendment and Response Dated March 11, 1997, p. 4, emphasis in original). The claimed (as currently amended) invention does not have identical opposing ends on the upper elongated portion like the cited art (Never-Caught 1972 PNAS). It must have dissimilar ends, specifically wherein one end is horn-shaped and the opposite end is rectangularshaped. The claimed dissimilar ends, wherein one end must be hornshaped and the other end must be rectangular-shaped, are necessarily required, as explained in the specification and shown in FIG. 2, so that a single anvil can be used to simultaneously impale a character with the pointed end and bludgeon another character with the rectangular shaped end. Therefore, unlike the two anvils disclosed in Never-Caught 1972 PNAS, the amended claims do not cover anvils having upper elongated plastic portions having identical ends, including those of Never-Caught 1972 PNAS wherein in one anvil both ends of the upper elongated portion are rectangular and in the other anvil both ends of the upper elongated portion are horn-shaped. Therefore, in light of the above evidence, including the plain meaning of the terms to one of ordinary skill in the relevant are at the time of the invention, the clear disclosure in the specification, and the amendment and clear assertions to the U.S. Patent Office in the prosecution history, it is our opinion that a reasonable court should hold that the claim term “an anvilshaped plastic inner body, having an upper elongated portion having two opposing ends, wherein one end is horn-shaped and the other end is rectangular-shaped” means an anvil-shaped inner body having an upper elongated portion having two opposing ends, wherein one end is horn-shaped and the other end is rectangular-shaped. Etc. . . .

B. Invalidity [This section discusses invalidity. As discussed in Chapters 6–9, invalidity must be shown on a claim-by-claim and limitation-by-limitation basis. Invalidity should be shown by comparing the objectively construed claims with the teaching from the prior art (for art-based invalidity), or with the specification

Appendix C Sample Outline of Invalidity Opinion (for specification-based invalidity). Claim charts are especially recommended for prior art-based invalidity because they provide a clear means by which to compare directly a claim’s limitations with the corresponding elements in a prior art reference, ensuring that this is done as legally required on a claim-byclaim and limitation-by-limitation basis.] For example . . . As discussed and shown below, it is our opinion that a reasonable court should hold that claims 1–4, and 7–15 of the ’919 patent are invalid for being anticipated under 35 U.S.C. § 102(b) by Roadrunner 1986 Nature. It is also our opinion that a reasonable court should hold that claims 5 and 6 are invalid for being obvious under 35 U.S.C. § 103(a) from a combination of Roadrunner 1986 Nature and Coyote 1988 Science.

1. Claims 1–4 and 7–15 Are Anticipated Under Section 102(b) by Roadrunner 1986 Nature As discussed in Section VII above, Roadrunner 1986 Nature (Appendix B) is prior art to the ’919 Patent under Section 102(b) as a printed publication available more than one year before the earliest possible priority date of the ’919 patent. Anticipation under Section 102(b) requires that a single prior art reference disclose every claim limitation. As shown in the claim charts below, Roadrunner 1986 Nature clearly discloses every limitation of claims 1–4, and 7–15 of the ’919 patent. Hence, it is our opinion that a reasonable court should hold that these claims are invalid for being anticipated.

a) Claim 1 As shown in the chart below, claim 1 is anticipated by Roadrunner 1986 Nature because the reference discloses every limitation of claim 1.

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Construction of Claim 1 and Anticipation by Roadrunner 1986 Nature Claim 1


Anticipation by Roadrunner 1986 Nature

An anvil for cartoon use, comprising


(a) an anvil-shaped plastic inner body, having an upper elongated portion having two opposing ends, wherein one end is horn-shaped and the other end is rectangularshaped;


(b) a laminate disposed substantially over the outer surface of said anvil-shaped plastic inner body, wherein said laminate has the appearance of steel.

Figure 3b shows an anvil-shaped inner body made of plastic, having an upper elongated portion having two opposing ends, wherein one end is horn-shaped and the other end is rectangular-shaped, covered with a laminate disposed over the outer surface of the anvilshaped plastic inner body, wherein the laminate has the appearance of steel.

Further, page 4, lines 10–20 explain that figure 3a shows an anvil-shaped, plastic inner body, having an upper elongated portion having two opposing ends, wherein one end is hornshaped and the other end is rectangular-shaped.

Further, page 4, lines 20–42 explain that figure 3b shows an anvil-shaped inner body made of plastic, having an upper elongated portion having two opposing ends, wherein one end is horn-shaped and the other end is rectangularshaped, covered with a laminate disposed over the outer surface of the anvil-shaped plastic inner body, wherein the laminate has the appearance of steel. Further, page 4, lines 32–33, state: “To save money, the inner body of the anvil is shaped like the final version, but is made of plastic. A laminate is then applied over the inner body to give the anvil the appearance of being made of solid steel.”

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Appendix C Sample Outline of Invalidity Opinion As shown in the table above, every limitation of claim 1 is disclosed Roadrunner 1986 Nature. Therefore, it is our opinion that a reasonable court of law should hold that claim 1 of the ’919 patent is invalid for being anticipated by Roadrunner 1986 Nature. Etc. . . . For example . . .

2. Claim 5 Is Obvious Under Section 103(a) For the reasons discussed below, it is our opinion that a reasonable court should hold that claim 5 of the ’919 Patent is invalid because its subject matter would have been obvious to one of ordinary skill in the relevant art the time of the invention of the ’919 patent from a combination of Roadrunner 1986 Nature and Coyote 1988 Science. Claim 5 of the ’919 patent is as follows: The anvil of claim 1, wherein the anvil further has handles on opposite sides of its base, said handles being made of a plastic inner body and overlaid by a laminate wherein the laminate has the appearance of steel. It is our opinion that a reasonable court should hold that claim 5 of the ’919 patent is obvious under Section 103(a) from a combination of Roadrunner 1986 Nature and Coyote 1988 Science. Claim 5 depends directly from claim 1 and adds the subject matter quoted above and shown in the table below. The table below shows that a combination of Roadrunner 1986 Nature and Coyote 1988 Science discloses every limitation of claim 5. As discussed below, it is our opinion that a reasonable court should hold that claim 5 is invalid for being obvious from a combination of Roadrunner 1986 Nature and Coyote 1988 Science because such a combination would have been obvious to one of ordinary skill in the relevant art at the time the invention of the ’919 patent was made.

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962

An anvil for cartoon use, comprising (a) an anvil-shaped plastic inner body, having an upper elongated portion having two opposing ends, wherein one end is horn-shaped and the other end is rectangular-shaped;

(b) a laminate disposed substantially over the outer surface of said anvil-shaped plastic inner body, wherein said laminate has the appearance of steel;

Claim Roadrunner 1986 Nature Construction (if different from the literal words)

Coyote 1988 Science




Figure 4 shows an anvil-shaped inner body made of plastic, having an upper elongated portion having two opposing, identical ends.

Further, page 4, lines 10–20 explain that figure 3a shows an anvil-shaped, plastic inner body, having an upper elongated portion having two opposing ends, wherein one end is horn-shaped and the other end is rectangular-shaped. Figure 3b shows an anvil-shaped inner body made of plastic, having an upper elongated portion having two opposing ends, wherein one end is horn-shaped and the other end is rectangular-shaped, covered with a laminate disposed over the outer surface of the anvil-shaped plastic inner body, wherein the laminate has the appearance of solid steel.

Further, page 2, lines 15–35 explain that figure 4 shows an anvilshaped, plastic inner body, having an upper elongated portion having two opposing, identical ends.

Figure 5 shows an anvil-shaped inner body made of plastic, having an upper elongated portion having two opposing ends, covered with a laminate disposed substantially over the outer surface of the anvilshaped plastic inner body, wherein the laminate has the appearance of solid steel. Further, page 3, lines 5–22 explain that figure 5 shows an anvil-shaped inner body made of plastic, having an upper elongated portion having two opposing, identical ends, covered with a laminate disposed over the outer surface of the anvil-shaped plastic inner body, wherein the laminate has the appearance of solid steel.

Further, page 4, lines 20–42 explain that figure 3b shows an anvil-shaped inner body made of plastic, having an upper elongated portion having two opposing ends, wherein one end is horn-shaped and the other end is rectangular-shaped, covered with a laminate disposed over the outer surface of the anvil-shaped plastic inner body, wherein the laminate has the appearance of solid steel.

963

Further, on page 3, lines 5–22, the reference states: “Figure 4 shows an anvil-shaped inner body made of plastic, having an upper portion having two opposing ends, wherein each end is rectangular-shaped. Figure 5 shows the inner body covered with a laminate disposed over the outer surface of the plastic inner body, wherein the laminate has the appearance of steel. The anvil is lightweight and inexpensive because it is not made of solid steel. Rather, the anvil is composed of an anvil-shaped plastic inner body to which a laminate is applied to coat substantially all of the plastic inner body. The laminate has the appearance of steel. Thus, the final, coated anvil has the appearance of Further, on page 4, lines 32–33, the reference a traditional solid steel anvil, but is lighter, and less expensive to states: “To save money, the inner body of the manufacture (see “Lightweight, Inexpensive Anvils for Use in anvil is shaped like the final version, but is Cartoons,” Road Runner, 1986, Nature, 123:392–426).” made of plastic. A laminate is then applied over the inner body to give the anvil the appearance of being made of steel.” wherein the anvil further has handles on opposite sides of its base, said handles being made of a plastic inner body and overlaid by a laminate wherein the laminate has the appearance of steel.

Figure 4 shows handles on opposite sides of the base of the anvilshaped inner body made of plastic, having an upper elongated portion having two opposing, identical ends. figure 4 shows that the handles are made of the same plastic as the inner body of the anvil (i.e., figure 4 shows a plastic anvil-shaped inner body having an upper elongated portion having two opposing ends, and a base portion having handles on opposite sides of the base, wherein the handles are part of the plastic inner body).

Figure 5 shows that the handles on the base of the anvil-shaped inner body are covered with laminate in the same manner as the entire plastic inner body is coated with laminate, such that when the plastic inner body is covered with the laminate, that the entire anvil, including the side handles, is covered with the laminate and has the appearance of being made of steel.

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Page 3, lines 23–36 state, “[t]he anvil is especially adapted for easy handling, such as throwing, strategically dropping, and bludgeoning, by having handles on opposite sides of the base. Prior to this paper which discloses placing handles on the base of an anvil, lightweight anvils for use in cartoons, such as that disclosed in Roadrunner 1986 Nature, lacked handles. Therefore, it was awkward and potentially dangerous to maneuver the anvils. This was especially the case in desert environments, where high temperatures make grasping an anvil without handles awkward and potentially dangerous. The anvil as disclosed in this paper, having handles on its base, overcomes the problems of anvils without handles for use in cartoons, such as Roadrunner 1986 Nature. The handles on the anvils in this paper allow, for example, cartoon characters to more easily maneuver the anvils so that they may, for example, more easily impale and bludgeon other cartoon characters. This includes doing so at high desert temperatures, because a cartoon character must only grasp the anvil of this paper by the handles to maneuver it, rather than trying to grasp the body of the anvils prior to this paper. Thus, the handles represent an improvement in lightweight anvils for use in cartoons, for example, by improving the use of such by characters in impaling and bludgeoning one another.”

Appendix C Sample Outline of Invalidity Opinion The above table shows that every limitation of claim 5, which depends directly from claim 1, is disclosed in a combination of Roadrunner 1986 Nature and Coyote 1988 Science. Neither reference alone anticipates claim 5, as neither reference alone discloses every limitation of claim 5. The deficiencies are: (a) Roadrunner 1986 Nature does not disclose the handles on the base of the anvil as claimed in claim 5; and (b) Coyote 1988 Science does not disclose an anvil having an upper elongated portion having two opposing ends, wherein one end is horn-shaped and the other end is rectangularshaped. Coyote 1988 Science discloses an anvil having an upper elongated portion having two opposing ends. However, both ends of the upper elongated portion of the anvil disclosed in Coyote 1988 Science are identical rectangular-shaped ends. It is our opinion that the combination of Roadrunner 1986 Nature and Coyote 1988 Science to obtain the subject matter of claim 5 would have been obvious to one of ordinary skill in the art at the time of the invention of the ’919 patent. Section V discusses the law of obviousness. A claimed invention is obvious, and therefore, invalid, under Section 103(a) where one of ordinary skill in the art would have found the combination to be obvious at the time of the invention of the patent. Factors to be considered include whether the art is analogous; whether the combination achieves a predictable result or an unexpected result such as unexpected success; and whether there is an express teaching, suggestion, or motivation in the references to combine the references. Here, it is our opinion that a reasonable court should hold that the references are analogous, as both are in exactly the same art: lightweight anvils for use in cartoons. Further, it is our opinion that one of ordinary skill in the art would have found it obvious to combine the references because, for example, Coyote 1988 Science specifically references the Roadrunner 1986 Nature paper, and, in fact, expressly teaches that it is an improvement of the anvil of the Roadrunner 1986 Nature paper. Specifically, as shown in the claim chart above, Coyote 1988 Science expressly teaches that adding handles to the lightweight anvil of Roadrunner 1986 Nature, which lacks only handles in order to correspond to every limitation of claim 5, was an improvement, especially in the maneuverability of the anvils and especially in high desert temperatures. Specifically, page 3, lines 23–36 on the state of Coyote 1988 Science state The anvil is especially adapted for easy handling, such as throwing, strategically dropping, and bludgeoning, by having handles on opposite sides of the base. Prior to this paper which discloses placing handles on the base of an anvil, lightweight anvils for use in cartoons, such as that disclosed in Roadrunner 1986 Nature, lacked handles. Therefore, it was awkward and potentially dangerous to maneuver the anvils. This was especially the case in desert environments, where high temperatures

965

966 Appendix C Sample Outline of Invalidity Opinion make grasping an anvil without handles awkward and potentially dangerous. The anvil as disclosed in this paper, having handles on its base, overcomes the problems of anvils without handles for use in cartoons, such as Roadrunner 1986 Nature. The handles on the anvils in this paper allow, for example, cartoon characters to more easily maneuver the anvils so that they may, for example, more easily impale and bludgeon other cartoon characters. This includes doing so at high desert temperatures, because a cartoon character must only grasp the anvil of this paper by the handles to maneuver it, rather than trying to grasp the body of the anvils prior to this paper. Thus, the handles represent an improvement in lightweight anvils for use in cartoons, for example, by improving the use of such by characters in impaling and bludgeoning one another. As shown in Section VIII[A], the function of the handles as taught in Coyote 1988 Science is the same as the function of the handles as taught in the ’919 patent. For example, column 12, lines 50–62 of the ’919 patent describe the function of the handles on the anvil (as described in Roadrunner 1986 Nature) as: Moreover, the addition of handles to the base of the anvil (3) as shown in FIG. 3, which shows the anvil (2) having base (3) with handles (10) on opposing sides of the base (3), aids in the use of the anvil in cartoons, i.e, impaling and bludgeoning other cartoon characters. This is because the handles on the anvil make it easier to maneuver the anvil by cartoon characters for its use in cartoons, as shown in FIG. 4. FIG. 4 shows a cartoon character using the inventive anvil, having opposing handles (10) on the base (3) of the anvil (2), wherein the cartoon character is grasping the anvil by the handles for improved maneuverability of the anvil, for example, in simultaneously impaling one cartoon character and bludgeoning another. This use of the handles is especially preferred when the anvil is used in high desert temperatures where the surface of the anvil can get very hot. Maneuvering the anvil without handles in these conditions can be dangerous, awkward, and inefficient for its purpose because a character must try to grasp the anvil by its surface, which can be very hot and can lead to dropping the anvil or missing the intended target and potentially impaling or bludgeoning an innocent bystander, such as a cartoon illustrator. The addition of the handles makes maneuvering the anvil much easier, more efficient, and more precise. This is even more so in high desert temperatures, because a character may maneuver the anvil merely by grasping the handles rather than the surface area of the anvil, thereby decreasing the amount of hot surface area a character must touch on the anvil in order to impale and bludgeon.

Appendix C Sample Outline of Invalidity Opinion We understand from Mr. Brothers that making the combination of the references would have been obvious to one of ordinary skill in the art at the filing date of the application for the ‘919 patent because the Coyote 1988 Science reference teaches adding handles to the anvil of Roadrunner 1986 Nature as an improvement, and accordingly it expressly teaches an anvil having the same structure and function as that of the anvil of claim 5 of the ‘919 patent. Therefore, it is our opinion that a reasonable court should hold that claim 5 is obviousness based on an express teaching in the art to modify the anvil of Roadrunner 1986 Nature by adding the handles of Coyote 1988 Science to achieve exactly the subject matter of claim 5, including its functional properties. Thus, the subject matter of claim 5 is expressly taught in the art and we are not aware of any factors against obviousness, such as unexpected properties. As discussed in Section V, while the U.S. Supreme Court held in KSR that courts may not require an express teaching, suggestion, or motivation be found in prior art references in order to combine them for obviousness, when there is an express teaching, suggestion, or motivation in the references to make a combination, this supports obviousness. This is especially the case when the results of the suggested or taught combination are what one of ordinary skill in the art would have expected from the combination. As can be seen from the evidence above, this is exactly the situation with the combination of Roadrunner 1986 Nature and Coyote 1988 Science. Coyote 1988 Science expressly teaches one of ordinary skill in the art to combine the teaching of Roadrunner 1986 Nature, an anvil for use in cartoons having every limitation of claim 5 except handles on its base, with the express teaching of Coyote 1988 Science to add handles to the base of the anvil of Roadrunner 1986 Nature to achieve the subject matter of claim 5. Under KSR, as discussed in Section V, an invention is obvious where there is a teaching to combine prior art references to achieve the claimed subject matter and the result of the combination is what would have been predicted from the prior art. In this case, the result, as expressly taught in the prior art is an improved lightweight anvil for use in cartoons in which an anvil as disclosed in Roadrunner 1986 Nature is given handles to improve its maneuverability in cartoons, including improved maneuverability in impaling and bludgeoning cartoon characters, including at high desert temperatures. As discussed above, this is exactly the same structure and function that the ’919 patent describes for claim 5: the anvil of claim 1 having handles for an improved lightweight anvil for use in cartoons. This claimed subject matter is virtually exactly what is taught by Coyote 1988 Science, in which it is taught that the anvil of Roadrunner 1986 Nature is given handles to improve its maneuverability in cartoons, including improved maneuverability in impaling and bludgeoning cartoon characters, including at high desert temperatures.

967

968

Appendix C Sample Outline of Invalidity Opinion Therefore, it is our opinion that a reasonable court should hold that claim 5 of the ’919 patent is invalid for being obvious over a combination of Roadrunner 1986 Nature and Coyote 1988 Science because there is an express teaching to combine the references, and the expected properties of subject matter made by combining the references as taught are the properties of the subject matter of claim 5. As is also discussed in Section V, obviousness may be overcome if evidence of nonobviousness is sufficiently strong to overcome the obviousness position. Evidence of nonobviousness includes, for example, commercial success, licensing, and copying by others of the claimed invention. We are unaware of any such evidence, although we cannot state with certainty that none exists. However, it would appear unlikely that the ’919 patentees would have evidence such as commercial success or licensing of the claimed invention, as we understand that the ’919 patentees do not sell, and have never sold, the claimed invention, and have not licensed the ’919 patent to others. Further still, as discussed in Section V, even where there is evidence of nonobviousness, a court may still find an invention obvious if the obviousness position is sufficiently strong. Therefore, given the circumstances known to us as of the date of this opinion and discussed herein, as of the date of this document, it is our opinion that a reasonable court should hold that claim 5 of the ’919 patent is invalid under 35 U.S.C. § 103(a) for being obvious over a combination of Roadrunner 1986 Nature and Coyote 1988 Science. Etc. . . .

IX. Conclusions Based on the above analysis, it is our opinion that a reasonable court of competent jurisdiction should hold that all claims of the ’919 patent are invalid. The opinions and statements expressed herein are for the sole benefit of and may be relied upon by Acme. The opinions and statements set forth herein are not to be relied upon by another person or entity for any purpose. Very truly yours,

_____________________________ Date

Law & Firm, L.L.P.

Case, Statute, and Rule Index

A A. Stucki Co. v. Worthington Industries, Inc., 849 F.2d 593 (Fed. Cir. 1988) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5: I[B][2] Abbott Labs. v. Andrx Pharms., Inc., 473 F.3d 1196 (Fed. Cir. 2007) . . . . . . . . . 4: II[A] Abbott Labs. v. Baxter Pharm. Prods., 334 F.3d 1274 (Fed. Cir. 2003) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2: V[I][3][a] Abbott Labs. v. Dey, L.P., 287 F.3d 1097 (Fed. Cir. 2002). . . . . . . . . . . . . . . . . . . 23: I[C] Abbott Labs. v. Sandoz, Inc., 566 F.3d 1282 (Fed. Cir. 2009) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2: V[G][2], 2: V[G][2][b], 2: V[G][2][c], 2: V[G][2][d], 3: V[B][2], 3: V[B][2][b], 3: V[B][2][c], 3: V[B][2][d], 4: III[F][1], 4: III[F][2], 4: III[F][2][b], 4: III[F][2][c], 4: III[F][2][d], 6: VII[B][2], 8: X[B][2], 14: IV, 20: IV Abbott Labs. v. Sandoz, Inc., 566 F.3d 1282 (Fed. Cir. 2009) (Lourie, dissenting) . . . . . . . . . . . . . . . . . . . . . . . 2: V[G], 2: V[G][1], 2: V[G][2][d], 3: V[B][1], 3: V[B][2][d], 4: III[F][1], 4: III[F][2][d], 6: VII[B][2], 8: X[B][1] Abbott Labs. v. Sandoz, Inc., 566 F.3d 1282 (Fed. Cir. 2009) (Newman, dissenting) . . . . . . . . . . . . . . 2: V[G], 2: V[G][2][d], 3: V[B], 3: V[B][1], 3: V[B][2][d], 4: III[F][1], 4: III[F][2][d], 6: VII[B][2], 8: X[B][1], 8: X[B][2] Abbott Labs. v. Sandoz, 544 F.3d 1341 (Fed. Cir. 2008) . . . . . . . . .14: IV[A], 20: IV[A] Abbott Labs. v. Young, 920 F.2d 984 (D.C. Cir. 1990) . . . . . . . . . .14: III[A], 20: III[A] Abboud v. Ground Round, Inc. (In re Ground Round, Inc.), 335 B.R. 253 (B.A.P. 1st Cir. 2005) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22: V AbTox, Inc. v. Exitron Corp., 122 F.3d 1019 (Fed. Cir. 1997) . . . . . . . . . . . . 5: III[B][1] ACCO Brands, Inc. v. ABA Locks Mfr. Co., 501 F.3d 1307 (Fed. Cir. 2007) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5: I[B][1], 5: I[B][3], 13: VI[A] ACS Hosp. Sys., Inc. v. Montefiore Hosp., 732 F.2d 1572 (Fed. Cir. 1984) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3: IV[A][1] Adams v. United States, 383 U.S. 39 (1966) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8: VI[D] Adenta GmbH v. OrthoArm, Inc., 501 F.3d 1364 (Fed. Cir. 2007) . . . . . . . . . . . . 19: VI Advanced Cardiovascular Sys. v. Medtronic, Inc., 265 F.3d 1294 (Fed. Cir. 2001) . . . . . . . . . . . . . . . . . . . . . 11: III[A][2], 12: III[B], 18: II[B], 23: I[C] Advanced Display Sys., Inc. v. Kent State Univ., 212 F.3d 1272 (Fed. Cir. 2000) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6: VI[B]

969

970 Case, Statute, and Rule Index Aerocon Eng’g, Inc. v. Silicon Valley Bank (In re World Aux. Power Co.), 303 F.3d 1120 (9th Cir. Cal. 2002) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22: VI Agawam Woolen v. Jordan, 74 U.S. (7 Wall.) 583, 19 L. Ed. 177 (1868) . . . . . . . . 7: VI Ajinomoto Co. v. Archer-Daniels-Midland Co., 228 F.3d 1338 (Fed. Cir. 2000) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9: II[C], 9: II[D] Akron Polymer Container Corp. v. Exxel Container, 148 F.3d 1380 (Fed. Cir. 1998) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10: II[E] AK Steel Corp. v. Sollac, 344 F.3d 1234 (Fed. Cir. 2003) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2: V[I][2], 3: IV[C][2], 9: II[A], 9: II[D], 9: II[G], 9: II[H] Alco Standard Corp. v. Tennessee Valley Authority, 808 F.2d 1490 (Fed. Cir. 1986) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8: VIII[C][3] Allen Archery, Inc. v. Browning Mfg. Co., 819 F.2d 1087 (Fed. Cir. 1987) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15: II, 21: I, 21: III Allendale Mut. Ins. v. Bull Data Sys., 152 F.R.D. 132 (N.D. Ill. 1993) . . . . . . 24: VI[E] Allen Eng’g Corp. v. Bartell Indus., 299 F.3d 1336 (Fed. Cir. 2002) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3: III[A], 3: III[B], 3: IV[B][1], 11: III[B][2], 11: III[B][4], 12: IV[B], 12: IV[D], 18: III[C], 18: III[D] Allen v. Brady Co., 508 F.2d 64 (7th Cir. 1974) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7: IV Alloc, Inc, v. ITC, 342 F.3d 1361 (Fed. Cir. 2003) . . . . . . . . . . . . . . . . . . . . . . . . . 23: I[C] AllVoice Computing PLC v. Nuance Communs., Inc., 504 F.3d 1236 (Fed. Cir. 2007) . . . . . . . . . . . . . . . . . . . 9: IV[A], 9: IV[B], 9: V[F][1] Al-Site Corp. v. VSI Int’l, Inc., 174 F.3d 1308 (Fed. Cir. 1999). . . . . . . 2: V[F][2][b][1], 3: V[A][2][b], 4: III[E][3][a], 4: III[E][3][b] Altoona Publix Theatres, Inc. v. American Tri-Ergon Corp., 294 U.S. 477 (1935) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21: III Am. Standard, Inc. v. Pfizer, Inc., 828 F.2d 734 (Fed. Cir. 1987) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .24: II[A], 24: IV[B] Amazon. com, Inc. v. Barnesandnoble.com, Inc., 239 F.3d 1343 (Fed. Cir. 2001) . . . . . . . . . . . . . 14: IV, 14: IV[A], 20: IV, 20: IV[A] American Safety Table Co. v. Schreiber, 415 F.2d 373 (2d Cir. 1969) . . . . . . . . 13: II[B] Amgen, Inc. v. Chugai Pharm. Co., 927 F.2d 1200 (Fed. Cir. 1991) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9: II[B], 9: II[F], 9: IV[A] Amgen Inc. v. Hoechst Marion Roussel, 314 F.3d 1313 (Fed. Cir. 2003) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6: V[C], 6: V[D], 8: V[C] Amhil Enters. Ltd. v. Wawa, Inc., 81 F.3d 1554 (Fed. Cir. 1996) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3: IV[B][1] Amstar Corp. v. Envirotech Corp., 730 F.2d 1476 (Fed. Cir. 1984) . . . . . .4: II[A], 4: III Andrx Pharmaceuticals, Inc. v. Biovail Corp., 276 F.3d 1368 (Fed. Cir. 2002) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14: III[C] Angeles Real Estate Co. v. Kerxton (In re Construction General Inc.), 737 F.2d 416 (4th Cir. 1984) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22: VI Antonious v. Spalding & Evenflo Cos., 275 F.3d 1066 (Fed. Cir. 2002) . . . . . . . . . . . . . . . . . . . . . . . . 14: II[A], 14: II[B], 20: II[A], 20: II[B] Apex Inc. v. Raritan Computer, Inc., 325 F.3d 1364 (Fed. Cir. 2003) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2: V[F][1]

Case, Statute, and Rule Index 971 Apotex, Inc. v. Thompson, 347 F.3d 1335 (Fed. Cir. 2003) . . . . . . . . . . . . . . . .14: III[A], 14: III[B], 14: III[C], 20: III[A], 20: III[C] Applegate v. Scherer, 332 F.2d 571 (CCPA 1964) . . . . . . . . . . . . . . . . . . . . . . . . . . . 7: VI Applied Med. Res. Corp. v. U.S. Surgical Corp., 435 F.3d 1356 (Fed. Cir. 2006) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23: II Applied Med. Res. Corp. v. U.S. Surgical Corp., 448 F.3d 1324 (Fed. Cir. 2006) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9: V[F][1] AquaTex Indus., Inc. v. Techniche Solutions, 419 F.3d 1374 (Fed. Cir. 2005) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2: IV[C][3][b] Arcade, Inc. v. Minnesota Mining & Mfg. Co., 1993 U.S. App. LEXIS 14976 (Fed. Cir. 1993) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21: II[A] Aristocrat Techs. Austl. Pty Ltd. v. Int’l Game Tech., 521 F.3d 1328 (Fed. Cir. 2008) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9: V[F], 9: V[F][2] Arizona v. Maricopa County Med. Soc., 457 U.S. 332, 73 L. Ed. 2d 48, 102 S. Ct. 2466 (1982) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10: IV[E] Aro Mfg. Co. v. Convertible Top Replacement Co., 365 U.S. 336, 5 L. Ed. 2d 592, 84 S. Ct. 599 (1960) . . . . . . . . . . . . . . . . . . . . . . . 5: I[C][1] Aro Mfg. Co. v. Convertible Top Replacement Co., 377 U.S. 476, 12 L. Ed. 2d 457, 84 S. Ct. 1526 (1964) . . . . . . . . .5: I[C][2], 13: II[A] Astra Aktiebolag v. Andrx Pharms., Inc. (In re Omeprazole Patent Litig.), 483 F.3d 1364 (Fed. Cir. 2007) . . . . . . . . . . . . . . . . . . . . 4: III[B], 6: I, 6: II, 6: VI[A], 7: I, 11: III[C][3] Astrazeneca AB v. Mutual Pharm. Co., Inc., 384 F.3d 1333 (Fed. Cir. 2004) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2: IV[C][3][a] Athletic Alternatives, Inc. v. Prince Mfg., Inc., 73 F.3d 1573 (Fed. Cir. 1996) . . . . . . . . . . . . . . . . . . . . . . . . . . .2: IV[C][2][b][3], 4: III[B], 9: V[A] Atlantic Thermoplastics v. Faytex Corp., 970 F.2d 834 (Fed. Cir. 1992) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2: V[G][2][a], 3: V[B][2][a], 3: V[B][2][c], 4: III[F][2][a], 4: III[F][2][c] Atlantic Thermoplastics v. Faytex Corp., 970 F.2d 834 (Fed. Cir. 1992) (Newman, dissenting) . . . . . . . . . . . . . . . . . . . . . . . . . . 3: V[B][2][a] Augustine Med., Inc. v. Gaymar Indus, Inc., 181 F.3d 1291 (Fed. Cir. 1999) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6: III, 23: I[C] Auto. Techs. Int’l, Inc. v. BMW of N. Am., Inc., 501 F.3d 1274 (Fed. Cir. 2007) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9: II[A], 9: II[E], 9: II[F] Autogiro Co. of Am. v. United States, 384 F.2d 391 (Ct. Cl. 1967) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2: IV[C][3][a], 4: I[A][1]

B B. Braun Med., Inc. v. Abbott Labs., 124 F.3d 1419 (Fed. Cir. 1997) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10: IV[A], 10: IV[F], 11: III[D], 11: V[A][2], 19: II[D], 19: IV[B], 22: IV[D] Bai v. L & L Wings, Inc., 160 F.3d 1350 (Fed. Cir. 1998) . . . . . . . . . 3: IV[B][2], 4: I[D] Ball Corp. v. United States, 729 F.2d 1429 (Fed. Cir. 1984) . . . . . . . . . . . . . . . . . . . 21: II Bank Brussels Lambert v. Credit Lyonnais, 160 F.R.D. 437 (S.D.N.Y. 1995) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24: VI[E] Bard. Inc. v. M3 Sys., Inc., 157 F.3d 1340 (Fed. Cir. 1998) . . . . . . . . . . . . . . . . . 9: I, 10: I

972

Case, Statute, and Rule Index Basic Inc. v. Levinson, 485 U.S. 224 (1988) . . . . . . . . . . . . . . . . . . . . . . . . . . . 16: II[A][2] Bausch & Lomb, Inc. v. Barnes-Hind/ Hydrocurve, Inc., 796 F.2d 443 (Fed. Cir. 1986) . . . . . . . . . . . . . . . . . . . . . . . . . . . .14: IV[A], 20: IV[A] Baxter Healthcare Corp. v. Spectramed, Inc., 49 F.3d 1575 (Fed. Cir. 1995) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3: III[A], 3: IV[B][1], 3: V[C] Baxter Intern., Inc. v. COBE Labs., Inc., 88 F.3d 1054 (Fed. Cir. 1996) . . . . . . 7: III[A] Bayer AG & Bayer Corp. v. Schein Pharms., Inc., 301 F.3d 1306 (Fed. Cir. 2002) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7: V, 9: IV[A], 9: IV[C], 9: IV[E] Bayer AG v. Elan Pharm. Research Corp., 212 F.3d 1241 (Fed. Cir. 2000) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14: IV[A], 20: IV[A] Bayer AG v. Housey Pharms., Inc., 340 F.3d 1367 (Fed. Cir. 2003). . . . . . . . . .5: I[E][2] Bayer AG v. Schein Pharms., Inc., 301 F.3d 1306 (Fed. Cir. 2002) . . . . . . . . . . 9: IV[A] BBA Nonwovens Simpsonville, Inc. v. Superior Nonwovens, L.L.C., 303 F.3d 1332 (Fed. Cir. 2002) . . . . . . . . . . . . . . . . . . . . . . . . . . . 2: V[F][2][a] Beall v. Ormsby, 154 F.2d 663 (CCPA 1946) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7: VI Beckman Instruments, Inc., v. LKB Produkter AB, 892 F.2d 1547 (Fed. Cir. 1989) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14: II[C], 20: II[C] Becton Dickinson & Co. v. C.R. Bard, Inc., 922 F.2d 792 (Fed. Cir. 1990) . . . . .3: IV, 3: IV[A], 3: IV[B], 3: IV[D], 11: III[B][3], 12: IV[C], 18: III[B] Beech Aircraft Corp. v. Edo Corp., 990 F.2d 1237 (Fed. Cir. 1993) . . . . . . . . . . . . . . . . . . 17: VII[A], 18: VI[A], 19: II[A][1], 22: III[A] Bell Atl. Network Servs., Inc. v. Covad Commc’ns Group, Inc., 262 F.3d 1258 (Fed. Cir. 2001) . . . . . . . . . . . . . . . . . . . 4: II[A], 2: IV[C][3][a], 4: III Benitec Austl., Ltd. v. Nucleonics, Inc., 495 F.3d 1340 (Fed. Cir. 2007) . . . . . . . . 19: VI Beverly Hills Fan Co. v. Royal Sovereign Corp., 21 F.3d 1558 (Fed. Cir. 1994) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5: I[B][2] B.F. Goodrich Co. v. Aircraft Braking Sys. Corp., 72 F.3d 1577 (Fed. Cir. 1996) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8: II[C] Bilski v. Doll, 129 S. Ct. 2735 (2009) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17: VI[E] Biomedino, LLC v. Waters Techs. Corp., 490 F.3d 946 (Fed. Cir. 2007) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9: V[F], 9: V[G] Biotec Biologische Naturverpackungen GmbH & Co. KG v. Biocorp, Inc., 249 F.3d 1341 (Fed. Cir. 2001) . . . . . . . . . . . . . . . . . . . . . . 21: IV BMC Resources, Inc. v. Paymentech, L.P., 498 F.3d 1373 (Fed. Cir. 2007) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5: II, 5: II[A], 5: II[B], 5: II[C] Bonito Boats, Inc. v. Thunder Craft Boats, Inc., 489 U.S. 141, 103 L. Ed. 2d 118, 109 S. Ct. 971 (1989) . . . . . . . . . . . . . . . . . . . . . . 2: V[G], 3: V[B], 4: I[A][1], 4: III[F], 6: VII[B][1], 8: X[B][1] Bonneville Power Admin. v. Mirant Corp. (In re Mirant Corp.), 440 F.3d 238 (5th Cir. 2006) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22: V[A][2][e] Bott v. Four Star Corp., 807 F.2d 1567 (Fed. Cir. 1986) . . . . . . . . 16: III[A][6], 23: I[I] Bott v. Four Star Corp., 229 USPQ 241 (E.D. Mich. 1985) . . . . . . . . . . . . . . . . . 13: II[B] Brady Constr. Innovations, Inc. v. Perfect Wall, Inc., 290 Fed. Appx. 358 (Fed. Cir. 2008) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21: II[A] Bristol-Myers Squibb Co. v. Ben Venue Labs., 246 F.3d 1368 (Fed. Cir. 2001) . . . . . . . . . . . . . . . . . . . . . . . . . . 6: I, 6: V[B], 6: VI[A], 6: VI[D], 7: I Bristol-Myers Squibb Co. v. Rhone-Poulenc Rorer, Inc., 326 F.3d 1226 (Fed. Cir. 2003) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10: II[C]

Case, Statute, and Rule Index 973 Britesmile, Inc. v. Discus Dental, Inc., 2004 U.S. Dist. LEXIS 20023 (N.D. Cal. 2004) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19: VII[E], 24: VI[E] Broadcom Corp. v. Qualcomm, Inc., 543 F.3d 683 (Fed. Cir. 2008) . . . . . . . . . . . . . . . . . . . 5: I[B][3], 5: I[B][5], 5: I[B][6], 13: I, 13: VI Broad v. Rockwell International Corp., 642 F.2d 929 (5th Cir. 1981) (en banc) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16: II[A][2] Brooks Furniture Mfg. v. Dutailier Int’l, Inc., 393 F.3d 1378 (Fed. Cir. 2005) . . . . . . . . . . . . . . . . . . . . . . . .14: II[C], 14: II[D], 20: II[C], 20: II[D] Brooktree Corp. v. Advanced Micro Devices, Inc., 977 F.2d 1555 (Fed. Cir. 1993) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9: II[G] Brown & Williamson Tobacco Corp. v. Philip Morris Inc., 229 F.3d 1120 (Fed. Cir. 2000) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8: II[C], 8: VIII[A] Bruckelmyer v. Ground Heaters, Inc., 445 F.3d 1374 (Fed. Cir. 2006) . . . . . . . . . . 6: IV Brulotte v. Thys Co., 379 U.S. 29, 13 L. Ed. 2d 99, 85 S. Ct. 176 (1964) . . . . . 10: IV[C] Bruning v. Hirose, 161 F.3d 681 (Fed. Cir. 1998) . . . . . . . . . . . . . . . . . . .15: II, 15: II[A], 15: III, 15: III[A], 21: I, 21: I[A], 21: II Budde v. Harley-Davidson, Inc., 250 F.3d 1369 (Fed. Cir. 2001) . . . . . . . . . . . . . 9: V[B] Builders Concrete, Inc. v. Bremerton Concrete Prods. Co., 757 F.2d 255 (Fed. Cir. 1985) . . . . . . . . . . . . . . . . . . . . . . . . . . . 3: III[A], 3: IV[B][1] Burr v. Duryee, 68 U.S. (1 Wall.) 531, 17 L. Ed. 650 (1863) . . . . . . . . . . . . . . . . 9: VI[A]

C C. P. Mktg. Group, Inc. v. BG Star Prods., 129 S. Ct. 1577 (2009) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22: V[A][2] Callicrate v. Wadsworth Mfg., 427 F.3d 1361 (Fed. Cir. 2005) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2: IV[C][2], 2: IV[C][2][b][2], 2: V[F][1], 2: V[F][2][b], 3: V[A][2][b] Cambridge Prods. Ltd. v. Penn Nutrients Inc., 962 F.2d 1048 (Fed. Cir. 1992) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14: II[C], 20: II[C] Canton Bio-Med., Inc. v. Integrated Liner Techs., Inc., 216 F.3d 1367 (Fed. Cir. 2000) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5: II[A] Capon v. Eshhar, 418 F.3d 1349 (Fed. Cir. 2005). . . . . . . . . . . . . . . . . . . . . . . . . 9: III[G] Cardiac Pacemakers, Inc. v. St. Jude Med., 296 F.3d 1106 (Fed. Cir. 2002) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2: V[F][2][a] Cardiac Pacemakers, Inc. v. St. Jude Med., Inc., 303 Fed. Appx. 884 (Fed. Cir. 2008) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5: I[D][2] Cargill, Inc. v. Canbra Foods, Ltd., 476 F.3d 1359 (Fed. Cir. 2007) . . . . . . . . . . . . . . . . . . . . . . . . . 7: II[A][1], 9: I, 10: I, 10: II, 10: II[B], 10: II[E], 23: I[M] Carnegie Mellon Univ. v. Hoffmann La Roche Inc., 541 F.3d 1115 (Fed. Cir. 2008) . . . . . . . . . . . . . . . . . . . . . .9: II, 9: III, 9: III[A], 9: III[B], 9: III[C], 9: III[H] Carroll Touch, Inc. v. Electro Mech. Sys, Inc., 15 F.3d 1573 (Fed. Cir. 1993) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4: I[C] Catalina Mktg. Int’l, Inc. v. Coolsavings.com, Inc., 289 F.3d 801 (Fed. Cir. 2002) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2: V[H][1], 4: II[B] CCS Fitness, Inc. v. Brunswick Corp., 288 F.3d 1359 (Fed. Cir. 2002) . . . . . . . . . . . . . . . . . . . . . . 2: IV[B][2][b], 2: IV[C][3][a], 2: V[F][1]

974

Case, Statute, and Rule Index Celeritas Techs. Inc. v. Rockwell Int’l Corp., 150 F.3d 1354 (Fed. Cir. 1998) . . . . . . . . . . . . . . . . . . . . . . . 6: I, 6: VI[D], 7: I, 14: IV[A], 20: IV[A] Central Soya Co. v. Geo. A. Hormel & Co., 723 F.2d 1573 (Fed. Cir. 1983) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .16: III[A][9], 23: I, 23: I[J], 23: II Chemcast Corp. v. Arco Indus. Corp., 913 F.2d 923 (Fed. Cir. 1990) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9: IV[A], 9: IV[B] Chimie v. PPG Indus., Inc., 402 F.3d 1371 (Fed. Cir. 2005) . . . . . . . . . . . . . . . . . . . . . . . . . 2: IV[C][2][b][3], 9: V[A], 9: V[E][1] Chiuminatta Concrete Concepts, Inc. v. Cardinal Indus. Inc., 145 F.3d 1303 (Fed. Cir. 1998) . . . . . . . . . . . . . . . . . . . . . . .2: V[F], 2: V[F][2][b][1], 3: V[A][1], 3: V[A][2][b], 4: III[E][2], 4: III[E][3][b], 6: VII[A][1], 6: VII[A][2][b], 8: X[A][1], 8: X[A][2][b] Christianson v. Colt Industries Operating Corp., 822 F.2d 1544 (Fed. Cir. 1987) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9: IV[B], 9: IV[D] Cias, Inc. v. Alliance Gaming Corp., 504 F.3d 1356 (Fed. Cir. 2007) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2: V[H], 2: V[I][1] Cinicola v. Scharffenberger, 248 F.3d 110 (3d Cir. 2001) . . . . . . . . . . . . . 22: V[A][2][e] City Bank & Trust Co. v. Otto Fabric, Inc., 83 B.R. 780 (D. Kan. 1988) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22: VI City of Elizabeth v. American Nicholson Pavement Co., 97 U.S. 126, 24 L. Ed. 1000 (1877) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7: II[B] City of Jamestown v. James Cable Partners, L.P. (In re James Cable Partners), 27 F.3d 534 (11th Cir. 1994) . . . . . . . . 22: V[A][2][e] Coastal States Gas Corp. v. Dep’t of Energy, 617 F.2d 854 (D.C. Cir. 1980) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24: III[A] Cochrane v. Deener, 94 U.S. 780, 24 L. Ed. 139, 1877 Dec. Comm’r Pat. 242 (1876) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9: VI[A], 17: VI[E] Cohesive Techs., Inc. v. Waters Corp., 543 F.3d 1351 (Fed. Cir. 2008) . . . . . . . . . . . . . . . 3: V[A], 4: III[B], 4: III[E][1], 6: VII[A], 8: X[A] Comark Communs., Inc. v. Harris Corp., 156 F.3d 1182 (Fed. Cir. 1998) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2: V[B], 2: V[E] Connell v. Sears, Roebuck & Co., 722 F.2d 1542 (Fed. Cir. 1983) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6: I, 6: VI[C], 7: I Conoco, Inc. v. Energy & Envtl. Int’l, L.C., 460 F.3d 1349 (Fed. Cir. 2006) . . . . . . . . . . . . . . . . . . . . . . . . . . . 2: V[I][3], 3: IV[C][3], 4: III[A][1] Constant v. Advanced Micro-Devices, Inc., 848 F.2d 1560 (Fed. Cir. 1988) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6: IV, 6: V[B], 6: V[D], 8: VI[E] Continental Can Co. v. Monsanto Co., 948 F.2d 1264 (Fed. Cir. 1991) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6: VI, 6: VI[A], 17: VI[B] Continental Copper & Steel Indus., Inc. v. New York Wire Co., 1976 U.S. Dist. LEXIS 11859 (M.D. Pa. 1976) . . . . . . . . . . . . . . . . . . . . . . . . . . . 7: IV Cont’l Plastic Containers v. Owens Brockway Plastic Prods., 141 F.3d 1073 (Fed. Cir. 1998) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7: II[B] Cook Biotech Inc. v. Acell, Inc., 460 F.3d 1365 (Fed. Cir. 2006) . . . . . . . . . 2: IV[C][2], 2: IV[C][2][b][2], 2: IV[C][3][a], 2: IV[C][3][b] Cooper Cameron Corp. v. Kvaerner Oilfield Prod., 291 F.3d 1317 (Fed. Cir. 2002) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4: II[A], 4: III, 9: III[H]

Case, Statute, and Rule Index 975 Cooper v. Goldfarb, 154 F.3d 1321 (Fed. Cir. 1998) . . . . . . . . . . . . . . . . . . . . . . 7: VII[B] Cordis Corp. v. Medtronic AVE, Inc., 339 F.3d 1352 (Fed. Cir. 2003) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4: III[A][2] Corning Inc. v. SRU Biosystems, LLC, 223 F.R.D. 189 (D. Del. 2004) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19: VII[E], 24: VI[E] Corning v. Burden, 56 U.S. (15 How.) 252, 14 L. Ed. 683 (1853). . . . . . . . . . . . 9: VI[A] Corona Cord Tire Co. v. Dovan Chemical Corp., 276 U.S. 358, 72 L. Ed. 610 (1927) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7: IV C.R. Bard, Inc. v. M3 Sys., 157 F.3d 1340 (Fed. Cir. 1998) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10: IV[A], 10: IV[B], 10: IV[F], 11: V[A][2], 19: II[D], 19: IV[B], 22: IV[D] Critikon, Inc. v. Becton Dickinson Vascular Access, Inc., 120 F.3d 1253 (Fed. Cir. 1997) . . . . . . . . . . . . . . . . 10: II[E], 10: II[G], 11: III[A][1], 12: III[A], 18: II, 18: II[A], 23: I[D], 23: I[J] Crucible, Inc. v. Stora Kopparbergs Bergslags AB, 701 F. Supp. 1157 (W.D. Pa. 1988) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13: II[B] Crystal Semiconductor Corp. v. Tritech Microelectronics Int’l, 246 F.3d 1336 (Fed. Cir. 2001) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2: V[I][1] Custom Accessories, Inc. v. Jeffrey-Allan Indus., Inc., 807 F.2d 955 (Fed. Cir. 1986) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8: VIII[B], 15: II, 21: I Cybor Corp. v. FAS Techs., Inc., 138 F.3d 1448 (Fed. Cir. 1998) (en banc) . . . . . . . . . . . . . . . . . 3: IV, 3: IV[A], 3: IV[A][1], 3: IV[B], 3: V[A][2][b], 4: III[E][3][b], 6: II, 11: III[B][3], 12: IV[C], 18: III[B], 20: IV[A]

D Daiichi Sankyo Co., Ltd. v. Apotex, Inc., 501 F.3d 1254 (Fed. Cir. 2007) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8: VII[A] Dana Corp. v. IPC Ltd. P’ship, 860 F.2d 415 (Fed. Cir. 1988) . . . . . . 9: IV[B], 9: IV[C] Datamize, LLC v. Plumtree Software, Inc., 417 F.3d 1342 (Fed. Cir. 2005) . . . . . . . . . . . . 9: V[A], 9: V[B], 9: V[C], 9: V[D], 9: V[G], 23: I[C] Datascope Corp. v. SMEC, Inc., 879 F.2d 820 (Fed. Cir. 1989) . . . . . . .23: I[C], 23: I[J] Davis v. Reddy, 620 F.2d 885 (CCPA 1980) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7: VI Dawn Equipment Co. v. Kentucky Farms Inc., 140 F.3d 1009 (Fed. Cir. 1998) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4: III[B] Dawson Chem. Co. v. Rohm & Haas Co., 448 U.S. 176, 65 L. Ed. 2d 696, 100 S. Ct. 2601 (1980) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10: IV[D] Dayco Prods. v. Total Containment, Inc., 329 F.3d 1358 (Fed. Cir. 2003) . . . . . . . . . . . . . . . . . . . . . . . . . . . 11: III[D], 12: VI, 12: VI[C], 18: V Daystar Textilfarben GmbH v. C.H. Patrick Co., 464 F.3d 1356 (Fed. Cir. 2006) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8: VI[C][2] Deepsouth Packing Co. v. Laitram Corp., 406 U.S. 518, 92 S. Ct. 1700, 32 L. Ed. 2d 273 (1972) . . . . . . . . . . . . . . . . . . . .5: I[D][1], 5: I[D][2] Deering Precision Instruments, L.L.C. v. Vector Distrib. Sys., 347 F.3d 1314 (Fed. Cir. 2003) . . . . . . . . . . . . . . . . . . . . . . . . .4: III[A][2], 9: V[E][1] DeGeorge v. Bernier, 768 F.2d 1318 (Fed. Cir. 1985). . . . . . . . . . . . . . 9: IV[B], 9: IV[C] DeGroff v. Roth, 412 F.2d 1401 (CCPA 1969) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7: VI Dennison Mfg. Co. v. Panduit Corp., 475 U.S. 809, 89 L. Ed. 2d 817, 106 S. Ct. 1578 (1986) . . . . . . . . . . . . . . . . . . . . . . . . . 8: VIII[C][3]

976

Case, Statute, and Rule Index Depuy Spine, Inc. v. Medtronic Sofamor Danek, Inc., 469 F.3d 1005 (Fed. Cir. 2006) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4: II[A] Diamond v. Diehr, 450 U.S. 175, 101 S. Ct. 1048, 67 L. Ed. 2d 155 (1981) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9: VI, 9: VI[A], 17: VI[E] Digeo, Inc. v. Audible, Inc., 505 F.3d 1362 (Fed. Cir. 2007) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14: II[A], 14: II[C], 20: II[C] Digital Control Inc. v. Charles Mach. Works, 437 F.3d 1309 (Fed. Cir. 2006) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10: II[C], 10: II[F] D.M.I., Inc. v. Deere & Co., 755 F.2d 1570 (Fed. Cir. 1985) . . . . . . . . . . . . . . . . . 2: V[E] Dow Chem. Co. v. American Cyanamid Co., 816 F.2d 617 (Fed. Cir. 1987) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8: VIII[C][4] Dowling v. United States, 473 U.S. 207, 105 S. Ct. 3127, 87 L. Ed. 2d 152 (1985) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13: II[A] DSU Med. Corp. v. JMS Co., 471 F.3d 1293 (Fed. Cir. 2006) . . . . . . . . . . . . . . . 5: I[B], 5: I[B][2], 5: I[B][3], 5: I[B][4], 13: VI[B] Dunlop Holdings Limited v. Ram Golf Corp., 524 F.2d 33 (7th Cir. 1975) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7: IV Duplan Corp. v. Deering Milliken, 397 F. Supp. 1146 (D.S.C. 1974). . . . . . . . 24: VI[E] Duplan Corp. v. Deering Milliken Research Corp., 487 F.2d 459 (4th Cir. 1973) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7: V Dynacore Holdings Corp. v. U.S. Philips Corp., 363 F.3d 1263 (Fed. Cir. 2004) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5: I[B][1], 5: I[C][1]

E Eagle Comtronics, Inc. v. Arrow Communication Labs., Inc., 305 F.3d 1303 (Fed. Cir. 2002) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4: III[A][2] Eaton Corp. v. Rockwell Int’l Corp., 323 F.3d 1332 (Fed. Cir. 2003) . . . . . . . . . . . . 7: VI Ecolochem, Inc. v. S. Cal. Edison Co., 227 F.3d 1361 (Fed. Cir. 2000) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6: VI[C], 8: VIII[A] Egbert v. Lippmann, 104 U.S. 333, 26 L. Ed. 755 (1881) . . . . . . . . . . . . . . . . . . . 7: III[A] E.I. du Pont de Nemours & Co. v. Phillips Petroleum Co., 849 F.2d 1430 (Fed. Cir. 1988) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2: V[B], 2: V[I] E.I. du Pont de Nemours & Co. v. Shell Oil Co., 498 A.2d 1108 (Del. 1985) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22: V[A][1] Eibel Process Co. v. Minn. & Ontario Paper Co., 261 U.S. 45, 67 L. Ed. 523, 43 S. Ct. 322, 1923 Dec. Comm’r Pat. 623 (1923) . . . . . . . . . 6: VI[A] Elan Pharm., Inc. v. Mayo Found. For Med. Educ. & Research, 346 F.3d 1051 (Fed. Cir. 2003) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6: V[D] Electro Med. Sys., S.A. v. Cooper Life Scis., Inc., 34 F.3d 1048 (Fed. Cir. 1994) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13: II[C] Elekta Instrument S.A. v. O.U.R. Scientific Int’l, Inc., 214 F.3d 1302 (Fed. Cir. 2000) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2: V[I] Eli Lilly & Co. v. Am. Cyanamid Co., 82 F.3d 1568 (Fed. Cir. 1996) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5: I[E][1], 5: I[E][3], 5: II[D] Eli Lilly & Co. v. Aradigm Corp., 376 F.3d 1352 (Fed. Cir. 2004) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7: VII[B], 18: VI[H], 19: V[C] Eli Lilly & Co. v. Barr Labs., Inc., 251 F.3d 955 (Fed. Cir. 2001) . . . . . . . . . . . . . . . . . . . 6: VI[A], 9: IV, 9: IV[A], 9: IV[B], 9: IV[D]

Case, Statute, and Rule Index 977 Eli Lilly & Co. v. Medtronic, Inc., 496 U.S. 661, 110 S. Ct. 2683, 110 L. Ed. 2d 605 (1990) . . . . . . . . . . . . . . . . . . . . . . . .5: III[A], 5: III[B][1] Elkay Mfg. Co. v. Ebco Mfg. Co., 192 F.3d 973 (Fed. Cir. 1999) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2: IV[C][4], 23: I[C] Elkins v. United States, 364 U.S. 206, 80 S. Ct. 1437, 4 L. Ed. 2d 1669 (1960) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24: IV[B] EMI Group N. Am., Inc. v. Cypress Semiconductor Corp., 268 F.3d 1342 (Fed. Cir. 2001) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6: VI[A] Encino Business Management v. Prize Frize, Inc., 150 B.R. 456 (B.A.P. 9th Cir. Cal. 1993). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .22: V[B][5] Enercon GMbH v. ITC, 151 F.3d 1376 (Fed. Cir. 1998) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2: V[D][2], 3: IV[A][1] Energizer Holdings, Inc. v. Int’l Trade Comm’n, 435 F.3d 1366 (Fed. Cir. 2006) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9: V[G] Engel Indus., Inc. v. Lockformer Co., 946 F.2d 1528 (Fed. Cir. 1991) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9: IV[B] Environmental Designs, Ltd. v. Union Oil Co., 713 F.2d 693 (Fed.Cir. 1983) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8: VII[A], 15: II, 21: I Enzo Biochem v. Gen-Probe Inc., 296 F.3d 1316 (Fed. Cir. 2002) . . . . . . . . . . . 9: III[G] Enzo Biochem, Inc. v. Gen-Probe Inc., 323 F.3d 956 (Fed. Cir. 2002) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9: III, 9: III[C] Eolas Techs., Inc. v. Microsoft Corp., 399 F.3d 1325 (Fed. Cir. 2005) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2: V[B], 5: I[D][2] EP Medsystems, Inc. v. Echocath, Inc., 30 F. Supp. 2d 726 (D.N.J. 1998) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .16: II[I] EP Medsystems, Inc. v. Echocath, Inc., 235 F.3d 865 (3d Cir. 2000) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .16: II[I] Ernst & Ernst v. Hochfelder, 425 U.S. 185 (1976) . . . . . . . . . . . . . . . . . . . . . 16: II[A][2] eSpeed, Inc. v. BrokerTec USA, L.L.C., 480 F.3d 1129 (Fed. Cir. 2007). . . . . . . 10: II[C] Ethicon v. U.S. Surgical Corp., 135 F.3d 1456 (Fed. Cir. 1998) . . . . . . . . . . . . . . . . . . . . .17: VII[A], 18: VI[B], 18: VI[C], 19: II[D] Ethicon, Inc. v. Quigg, 849 F.2d 1422 (Fed. Cir. 1988) . . . . . . . . . . . . . . . . . . 15: II, 21: I Everex Sys. v. Cadtrak Corp. (In re CFLC, Inc.), 89 F.3d 673 (9th Cir. 1996) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22: V[A][1], 22: V[A][2][b] EWP Corp. v. Reliance Universal Inc., 755 F.2d 898 (Fed. Cir. 1985) . . . . . . . 8: VIII[B] Exigent Tech., Inc. v. Atrana Solutions, Inc., 442 F.3d 1301 (Fed. Cir. 2006) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2: V[A], 4: I[B] Ex parte Davis, 80 U.S.P.Q. 448 (Pat. Off. Bd. App. 1948) . . . . . . . . . . . . . . . . 2: V[I][2] Exxon Research & Eng’g Co. v. United States, 265 F.3d 1371 (Fed. Cir. 2001) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9: V[B], 9: V[C], 9: V[D], 9: V[G] EZ Dock v. Schafer Sys., 276 F.3d 1347 (Fed. Cir. 2002) . . . . . . . . . . . . . . . . . . . . 7: II[B]

F Farmer v. Brennan, 511 U.S. 825, 114 S. Ct. 1970, 128 L. Ed. 2d 811 (1994) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13: IV Ferring B.V. v. Barr Labs., Inc., 437 F.3d 1181 (Fed. Cir. 2006) . . . .10: II[C], 10: II[E] Festo Corp. v. Shoketsu Kinzoku Kogyo Kabushiki Co., 234 F.3d 558 (Fed. Cir. 2000) (en banc) . . . . . . . . . . . . . . . . . . . 4: I[A][1], 4: III[A][1], 5: I, 21: IV

978 Case, Statute, and Rule Index Festo Corp. v. Shoketsu Kinzoku Kogyo Kabushiki Co., 344 F.3d 1359 (Fed. Cir. 2003) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4: I[D], 4: III[A][1], 4: III[C] Festo Corp. v. Shoketsu Kinzoku Kogyo Kabushiki Co., Ltd., 535 U.S. 722, 122 S. Ct. 1831, 152 L. Ed. 2d 944 (2002) . . . . . . . . . . . . . 3: III[B], 4: I, 4: I[A], 4: I[A][1], 4: III[A], 4: III[A][1], 9: II, 9: III[A], 11: III[B][2], 11: III[B][4], 12: IV[B], 12: IV[D], 18: III[C], 18: III[D] Fina Oil & Chem. Co. v. Ewen, 123 F.3d 1466 (Fed. Cir. 1997) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17: VII[A], 18: VI[B] Fina Tech. v. Ewen, 265 F.3d 1325 (Fed. Cir. 2001) . . . . . . . . . . . . . . . . . . . . . 11: IV[A] Finisar Corp. v. DirecTV Group, Inc., 523 F.3d 1323 (Fed. Cir. 2008) . . . . . . . . . . . . . . . . 6: III, 6: V, 6: V[A], 6: VI[B], 6: VI[C], 9: V[F], 9: V[G], 13: V, 13: VII[A], 17: VI[B], 23: I[L], 24: IV, 24: V Forest Labs., Inc. v. Abbott Labs., 339 F.3d 1324 (Fed. Cir. 2003) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14: II[C], 20: II[C] Forest Labs., Inc. v. Ivax Pharms., Inc., 501 F.3d 1263 (Fed. Cir. 2007) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6: V[A], 6: V[D] Fort James Corp. v. Solo Cup Co., 412 F.3d 1340 (Fed. Cir. 2005) . . . . . . . . . . . . . . . . . . . . . . . . .24: II[A], 24: III[A], 24: IV, 24: IV[B] Frank’s Casing Crew & Rental Tools, Inc. v. PMR Techs., Ltd., 292 F.3d 1363 (Fed. Cir. 2002) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9: V[E][3] Frank’s Casing Crew & Rental Tools, Inc. v. Weatherford Int’l, Inc., 389 F.3d 1370 (Fed. Cir. 2004) . . . . . . . . . . . . . . . . . . . 2: V[F][2][b][1], 3: IV[B][1], 3: V[A][1], 3: V[A][2][b] Free Motion Fitness, Inc. v. Cybex Int’l, 423 F.3d 1343 (Fed. Cir. 2005) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2: V[I][1], 3: IV[C][1] Fromberg, Inc. v. Thornhill, 315 F.2d 407 (5th Cir. 1963). . . . . . . . . . . . . . . . . 5: I[B][2] Fuji Photo Film Co., Ltd. v. Jazz Photo Corp., 394 F.3d 1368 (Fed. Cir. 2005) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5: I[B][6] Funk Bros. Seed Co. v. Kalo Inoculant Co., 333 U.S. 127, 68 S. Ct. 440, 92 L. Ed. 588 (1948) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9: VI, 17: VI[E]

G Gambro Lundia AB v. Baxter Healthcare Corp., 110 F.3d 1573 (Fed. Cir. 1997) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7: VI Ganino v. Citizens Utilities Co., 228 F.3d 154 (2d Cir. 2000) . . . . . . . . . . . . 16: II[A][2] Gaus v. Conair Corp., 363 F.3d 1284 (Fed. Cir. 2004). . . . . . . . . . . . . . . . . . . . . .4: III[B] Gearhart Indus. v. Smith Int’l, 741 F.2d 707 (5th Cir. 1984) . . . . . . . . . . . . . . . 16: II[F] Gemstar-TV Guide Int’l, Inc. v. ITC, 383 F.3d 1352 (Fed. Cir. 2004) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2: V[B], 11: IV[A], 18: VI[D] Gen. Elec. Co. v. Wabash Appliance Corp., 304 U.S. 364, 58 S. Ct. 899, 82 L. Ed. 1402 (1938) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9: V[A] Gen. Foods Corp. v. Studiengesellschaft Kohle mbH, 972 F.2d 1272 (Fed. Cir. 1992) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5: II[A] Gen. Talking Pictures Corp. v. W. Elec. Co., 305 U.S. 124, 83 L. Ed. 81, 59 S. Ct. 116 (1938) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10: IV[A] Genentech, Inc. v. Novo Nordisk A/S, 108 F.3d 1361 (Fed. Cir. 1997) . . . . . . . . 9: II[E] General Elec. Co. v. Nintendo Co., Ltd., 179 F.3d 1350 (Fed. Cir. 1999) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2: V[H][1]

Case, Statute, and Rule Index 979 General Electric Co. v. Sciaky Bros., 415 F.2d 1068 (6th Cir. 1969) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13: I, 13: III, 23: I Generation II Orthotics, Inc. v. Medical Tech., Inc., 263 F.3d 1356 (Fed. Cir. 2001) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2: V[I] GFI, Inc. v. Franklin Corp., 265 F.3d 1268 (Fed. Cir. 2001) . . . . . . . 10: II[C], 10: II[D] Gillette Co. v. Energizer Holdings, Inc., 405 F.3d 1367 (Fed. Cir. 2005) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2: V[I][1], 3: IV[C][1] Gilson v. Republic of Ireland, 787 F.2d 655 (D.C. Cir. 1986) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22: V[A][1] Giovan v. St. Thomas Diving Club, 1997 U.S. Dist. LEXIS 8816, 1997 WL 360867 (D.V.I. 1997). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24: VI[E] Glaxo Group Ltd. v. Apotex, Inc., 376 F.3d 1339 (Fed. Cir. 2004) . . . . . . . . . . 14: III[C] Golan v. Pingel Enter., Inc., 310 F.3d 1360 (Fed. Cir. 2002) . . . . . . . . . . . . . . . . 14: II[C] Goldenberg v. Cytogen, Inc., 373 F.3d 1158 (Fed. Cir. 2004) . . . . . . . . . . . . . . . . . . . . . 11: III[A][2], 12: III[B], 18: II[B], 23: I[C] Golden Blount, Inc. v. Robert H. Peterson Co., 438 F.3d 1354 (Fed. Cir. 2006) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5: I[B][6] Goldman v. Belden, 754 F.2d 1059 (2d Cir. 1985) . . . . . . . . . . . . . . . . . . . . . . . . .16: II[I] Gompper v. VISX, Inc., 298 F.3d 893 (9th Cir. 2002) . . . . . . . . . . . . . . . . . . . . . 16: II[B] Gottschalk v. Benson, 409 U.S. 63, 93 S. Ct. 253, 34 L. Ed. 2d 273 (1972) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9: VI, 9: VI[A], 17: VI[E] Gould, Inc. v. United States, 579 F.2d 571 (Ct. Cl. 1978) . . . . . . . . . . . . . . . . . . . 7: II[B] Gould v. Control Laser Corp., 705 F.2d 1340 (Fed. Cir. 1983) . . . . . . . . . . . . 15: II, 21: I Graco, Inc. v. Binks Mfg. Co., 60 F.3d 785 (Fed. Cir. 1995) . . . . . . . . . . . . . . . . . . . . . . . . . . . 13: V, 16: III[A][8], 23: I, 23: I[A], 23: I[I], 23: I[J], 23: I[L], 23: I[M] Graham v. John Deere Co. of Kan. City, 383 U.S. 1 (1966) . . . . . . . . . . . . . . . . . . . . . . . 2: IV[B][2][c], 2: IV[C][2][b][3], 8: I, 8: II[A], 8: II[C], 8: IV, 8: VIII, 8: VIII[C][1], 17: VI[C] Grain Processing Corp. v. Am. Maize-Prods. Co., 840 F.2d 902 (Fed. Cir. 1988) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7: II[B] Graver Tank & Mfg. Co., Inc. v. Linde Air Products Co., 339 U.S. 605 (1950) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4: I, 4: I[A], 4: I[A][1], 4: I[D], 4: II[B] Great Atlantic & Pacific Tea Co. v. Supermarket Equipment Corp., 340 U.S. 147, 71 S. Ct. 127, 95 L. Ed. 162 (1950) . . . . . . . . . . . . . . . . . . . . . . 8: VI[B] Great N. Corp. v. Henry Molded Prods., Inc., 94 F.3d 1569 (Fed. Cir. 1996) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9: IV[B] Greenberg v. Ethicon Endo-Surgery, Inc., 91 F.3d 1580 (Fed. Cir. 1996) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2: V[F][1] Griffel v. Murphy (In re Wegner), 839 F.2d 533 (9th Cir. 1988) . . . . . . . . . 22: V[A][1] Grossman v. Novell, Inc., 120 F.3d 1112 (10th Cir. 1997) . . . . . . . . . . . . . . . . . . .16: II[I] Group One, Ltd. v. Hallmark Cards, Inc., 254 F.3d 1041 (Fed. Cir. 2001) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7: II[A][1] GTE Directories Service, Corp. v. Pacific Bell Directory, 135 F.R.D. 187 (N.D. Cal. 1991) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19: VII[E], 24: VI[E] Guinn v. Kopf, 96 F.3d 1419 (Fed. Cir. 1996) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21: III

980

Case, Statute, and Rule Index

H Halliburton Energy Servs. v. M-I LLC, 514 F.3d 1244 (Fed. Cir. 2008) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9: V, 9: V[D], 9: V[G] Harden v. Raffensperger, Hughes & Co., Inc., 65 F.3d 1392 (7th Cir. 1995) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .16: II[I] Harris Corp. v. Ericsson Inc., 417 F.3d 1241 (Fed. Cir. 2005). . . . . . . . . . . . . . . . . . 23: II Harris v. Ivax Corp., 182 F.3d 799 (11th Cir. 1999) . . . . . . . . . . . . . . . . . . . . . . .16: II[I] Hazel-Atlas Glass Co. v. Hartford-Empire Co., 322 U.S. 238, 64 S. Ct. 997, 88 L. Ed. 1250 (1944) . . . . . . . . . . . . . . . . . . . . . 10: II[F] Hedgewick v. Akers, 497 F.2d 905 (CCPA 1974) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7: VI Helifix, Ltd. v. Blok-Lok, Ltd., 208 F.3d 1339 (Fed. Cir. 2000) . . . . . . . . .6: II, 17: VI[A] Herman & Maclean v. Huddleston, 459 U.S. 375 (1983) . . . . . . . . . . . . . . . 16: II[A][1] Hester Indus., Inc. v. Stein, Inc., 142 F.3d 1472 (Fed. Cir. 1998) . . . . . . 19: V[A], 21: II Hewlett-Packard Co. v. Bausch & Lomb, Inc., 882 F.2d 1556 (Fed. Cir. 1989) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21: II, 21: II[A] Hewlett-Packard Co. v. Bausch & Lomb, 909 F.2d 1464 (Fed. Cir. 1990) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5: I[C][2], 6: VIII[R] Hewlett-Packard Co. v. Bausch & Lomb, Inc., 115 F.R.D. 308 (N.D. Cal. 1987) . . . . . . . . . . . . . . . . . . 19: VII[D], 19: VII[E], 24: VI[D], 24: VI[E] H.H. Robertson Co. v. United Steel Deck, Inc., 820 F.2d 384 (Fed. Cir. 1987) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14: IV[A], 20: IV Hickman v. Taylor, 329 U.S. 495 (1947) . . . . . . . . . . . . . . . . 24: III, 24: IV[B], 24: V[B] Hitachi Global Storage Tech. Netherlands B.V. v. Read-Rite Corp. (In re Read-Rite Corp.), 2007 U.S. Dist. LEXIS 61363 (N.D. Cal. 2007) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .22: V[B][3] Hodosh v. Block Drug Co., 833 F.2d 1575 (Fed. Cir. 1987) . . . . . . . . . . . . . . . . 5: I[C][3] Hoffman-La Roche, Inc. v. Promega Corp., 323 F.3d 1354 (Fed. Cir. 2003) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10: II[C], 12: VI, 18: V Hoffmann-La Roche, Inc. v. Promega Corp., 323 F.3d 1354 (Fed. Cir. 2003) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12: VI, 12: VI[A], 18: V, 18: V[A] Hoffmann-La Roche Inc. v. Invamed Inc., 213 F.3d 1359 (Fed. Cir. 2000) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14: III[C] Hoganas AB v. Dresser Indus. Inc., 9 F.3d 948 (Fed. Cir. 1993). . . . . . . . . . . . . . 4: II[B] Holmgren v. State Farm Mut. Auto. Ins., 976 F.2d 573 (9th Cir. 1992) . . . . . . . . 24: III Honeywell Int’l, Inc. v. ITC, 341 F.3d 1332 (Fed. Cir. 2003) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9: V[A], 9: V[C], 9: V[G] Honeywell Int’l Inc. v. Universal Avionics Sys. Corp., 488 F.3d 982 (Fed. Cir. 2007) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10: II[A], 10: II[C] Hotchkiss v. Greenwood, 52 U.S. 248 (1851). . . . . . . . . . . . . . . . . . . . . . 8: II[A], 8: II[C] Hughes Aircraft Co. v. United States, 140 F.3d 1470 (Fed. Cir. 1998) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3: V[A][2][b], 4: III[E][3][b] Hunt v. Blackburn, 128 U.S. 464, 32 L. Ed. 488, 9 S. Ct. 125 (1888) . . . . . . . . . . . . 24: II Hybritech, Inc. v. Monoclonal Antibodies, Inc., 802 F.2d 1367 (Fed. Cir. 1986) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9: II[D]

I Impax Labs., Inc. v. Aventis Pharm. Inc., 468 F.3d 1366 (Fed. Cir. 2006) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6: V[D], 10: II[F]

Case, Statute, and Rule Index 981 Impax Labs., Inc. v. Aventis Pharms. Inc., 545 F.3d 1312 (Fed. Cir. 2008) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6: I, 6: V[A], 6: V[D], 6: VIII[Q], 7: I, 8: I, 9: I, 9: II[G], AppA: VII, AppC: VI IMS Tech., Inc. v. Haas Automation, Inc., 206 F.3d 1422 (Fed. Cir. 2000) . . . . . . . . . . . . . . . . . . . . . . . 2: V[F][2][b][1], 3: V[A][2][a], 3: V[B] Innova/Pure Water, Inc. v. Safari Water Filtration Sys., 381 F.3d 1111 (Fed. Cir. 2004) . . . . . . . . . . . . . . 2: IV[A], 2: IV[B][1], 2: IV[C][1], 2: IV[C][2][a], 2: IV[C][2][b][1], 2: IV[C][3][a], 2: IV[C][4], 11: III[A], 11: III[A][1], 12: III, 12: III[A], 17: III, 18: II, 18: II[A] In re Access Beyond Techs., Inc., 237 B.R. 32 (Bankr. D. Del. 1999) . . . . . . 22: V[A][1] In re Aerobox Composite Structures, 373 B.R. 135 (Bankr. D.N.M. 2007) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22: V[A][2][c] In re Alton, 76 F.3d 1168 (Fed. Cir. 1996) . . . . . . . . . . . . . .9: III[A], 9: III[B], 9: III[C] In re Am. Acad. of Sci. Tech Ctr., 367 F.3d 1359 (Fed. Cir. 2004) . . . . . . . . . . . . . . . . . . . . . . . . . . . .15: II, 15: II[A], 15: III, 15: III[A], 21: I, 21: I[A], 21: II, 21: II[A] In re Angstadt, 537 F.2d 498 (CCPA 1976) . . . . . . . . . . . . . . . . . . . . . . 9: II[F], 9: III[G] In re Arkley, 455 F.2d 586 (CCPA 1972) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6: VI[C] In re Bass, 474 F.2d 1276 (CCPA 1973) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8: V[A] In re Bass, 314 F.3d 575 (Fed. Cir. 2002). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15: II In re Bayer, 568 F.2d 1357 (C.C.P.A. 1978) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6: IV In re Baxter Travenol Labs., 952 F.2d 388 (Fed. Cir. 1991) . . . . . . . . . . . . 8: VIII[C][2] In re Bevill, 805 F.2d 120 (3d Cir. 1986) . . . . . . . . . . . . . . . . 19: VII[F][3], 24: VI[F][3] In re Bilski, 545 F.3d 943 (Fed. Cir. 2008) (en banc). . . . . . . .9: VI, 9: VI[A], 17: VI[E] In re Bond, 910 F.2d 831 (Fed. Cir. 1990). . . . . . . . . . . . . 6: VII[A][2][b], 6: VII[A][3], 8: X[A][2][b], 8: X[A][3], 15: II, 15: II[A], 15: III, 15: III[A], 21: I, 21: I[A], 21: II, 21: II[A] In re Brigance, 792 F.2d 1103 (Fed. Cir. 1986) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7: II[B] In re Catron, 158 B.R. 629 (E.D. Va. 1993) . . . . . . . . . . . . . . . . . . . . . . . . . 22: V[A][2][e] In re Caveney, 761 F.2d 671 (Fed. Cir. 1985) . . . . . . . . . . . . . . . . . . . . . . . . . . 15: II, 21: I In re Cendant Corp. Sec. Litig., 343 F.3d 658 (3d Cir. 2003) . . . . . . . . . . . . . . . . . 24: III In re Chi-Feng Huang, 23 B.R. 798 (B.A.P. 9th Cir. 1982) . . . . . . . . . . . . . . . . . . . . 22: V In re Chu, 66 F.3d 292 (Fed. Cir. 1995) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6: [III] In re Chupp, 816 F.2d 643 (Fed. Cir. 1987). . . . . . . . . . . . . . . . . . . . . . . . . . 8: VIII[C][2] In re Clark, 522 F.2d 623 (C.C.P.A. 1975) . . . . . . . . . . . . . . . . . . . . 10: II[H], 19: IV[A] In re Clay, 966 F.2d 656 (Fed. Cir. 1992) . . . . . . . . . . . . . . . . . . . . . 8: V[B], 8: VI[A][1] In re Clemens, 622 F.2d 1029 (CCPA 1980) . . . . . . . . . . . . . . . . . . . . . . . . .8: V[A], 8: IX In re Clement, 131 F.3d 1464 (Fed. Cir. 1997) . . . . . . . . . . . . . . .19: V[A], 21: II, 21: III In re Comiskey, 499 F.3d 1365 (Fed. Cir. 2007) . . . . . . . . . . . . . . . . . . . . 9: VI, 17: VI[E] In re Cortright, 165 F.3d 1353 (Fed. Cir. 1999) . . . . . . . . . . . . . . . . . . . . . . . . 15: II, 21: I In re Cronyn, 890 F.2d 1158 (Fed. Cir. 1989) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6: IV In re Cruciferous Sprout Litig., 301 F.3d 1343 (Fed. Cir. 2002) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2: V[H][1], 6: VI[A] In re Curtis, 354 F.3d 1347 (Fed. Cir. 2004) . . . . . . . . . . . . . . . . . . . . . . . . 9: II, 9: III[A] In re Deminski, 796 F.2d 436 (Fed. Cir. 1986) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8: V[B] In re Deuel, 51 F.3d 1552 (Fed. Cir. 1995) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8: VI[C][1] In re Di Leone, 436 F.2d 1404 (CCPA 1971) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9: III[A] In re Donald J. Trump Casino Sec. Litig., 7 F.3d 357 (3d Cir. 1993) . . . . . . . . . .16: II[I]

982 Case, Statute, and Rule Index In re Donaldson Co., 16 F.3d 1189 (Fed. Cir. 1994) . . . . . . . . . . 2: V[F][2], 3: V[A][2], 4: III[E][3][a], 6: V[B], 6: VII[A][2], 6: VII[A][2][b], 6: VII[A][3], 8: X[A][2], 8: X[A][2][a], 8: X[A][2][b], 8: X[A][3], 9: V[F], 9: V[F][2] In re Doyle, 293 F.3d 1355 (Fed. Cir. 2002) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21: II In re Doyle, 482 F.2d 1385 (CCPA 1973) . . . . . . . . . . . . . . . . . . . . . . . . . 21: II, 21: II[A] In re Driscoll, 562 F.2d 1245 (CCPA, 1977) . . . . . . . . . . . . . . . . . . . . . . . . . .2: V[I][3][a] In re EchoStar Commc’n Corp., 448 F.3d 1294 (Fed. Cir. 2006) . . . . . . . . . . . . . . . . . . . . . . . . . . . .24: III[A], 24: IV, 24: IV[A], 24: IV[B], 24: V[B], 24: V[C] In re Etter, 756 F.2d 852 (Fed. Cir. 1985) (en banc) . . . . . . . . . 15: II, 15: II[A], 15: III, 15: III[A], 15: IV[A], 21: I, 21: I[A], 21: II[A] In re Ferguson, 558 F.3d 1359 (Fed. Cir. 2009) . . . . . . . . . . . . . . . . . . . . . . . . . . 9: VI[A] In re Footstar, Inc., 323 B.R. 566 (Bankr. S.D.N.Y. 2005) . . . . . . . . . . . . . 22: V[A][2][c] In re Fout, 675 F.2d 297 (CCPA 1982) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8: VI[E] In re Gay, 309 F.2d 769 (CCPA 1962) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9: IV[C] In re Golden Books Family Entm’t, 269 B.R. 300 (Bankr. D. Del. 2001) . . . . . . . . . 22: V In re Gosteli, 872 F.2d 1008 (Fed. Cir. 1989) . . . . . . . . . . . .9: III[B], 9: III[C], 9: III[G] In re Gray, 53 F.2d 520 (CCPA 1931) . . . . . . . . . . . . . . . . . . . . . . 2: V[I][3], 3: IV[C][3] In re Grimme, 274 F.2d 949 (CCPA 1960) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9: III[G] In re Gurley, 27 F.3d 551 (Fed. Cir. 1994). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8: VI[D] In re Hall, 781 F.2d 897 (Fed. Cir. 1986). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6: IV In re Harnisch, 631 F.2d 716 (CCPA 1980) . . . . . . . . . . . . . . . . . . . . . . . . . .2: V[I][3][a] In re Hayes Microcomputer Prods., Inc. Patent Litig., 982 F.2d 1527 (Fed. Cir. 1992) . . . . . . . . . . . . . . . . . . . . . . . . . . .16: III[A][9], 23: I, 23: I[E], 23: I[J] In re Hiniker Co., 150 F.3d 1362 (Fed. Cir. 1998) . . . . . . . . . . . . . . . . . . . . . . 15: II, 21: I In re Huston, 308 F.3d 1267 (Fed. Cir. 2002) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9: III[D] In re Hyatt, 211 F.3d 1367 (Fed. Cir. 2000) . . . . . . . . . . . . . . . . . . . . . 15: II, 21: I, 21: II In re Icon Health & Fitness, Inc., 496 F.3d 1374 (Fed. Cir. 2007) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8: V[B], 8: VI[A][1], 8: VI[D] In re James Cable Partners, L. P., 27 F.3d 534 (11th Cir. 1994) . . . . . . . . . . 22: V[A][2] In re Janakirma-Rao, 317 F.2d 951 (CCPA 1963) . . . . . . . . . . . . . . . . . . . . . . . 2: V[I][2] In re Kahn, 441 F.3d 977 (Fed. Cir. 2006). . . . . . . . . . . . . . . . . . . . . . . . . 8: II[C], 8: VIII In re Kathawala, 9 F.3d 942 (Fed. Cir. 1993) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7: V In re Klopfenstein, 380 F.3d 1345 (Fed. Cir. 2004). . . . . . . . . . . . . . . . . . . . . . . . . . . 6: IV In re Kotzab, 217 F.3d 1365 (Fed. Cir. 2000) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8: II[C] In re Kratz, 592 F.2d 1169 (CCPA 1979) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6: VI[A] In re Martin Marietta Corp., 856 F.2d 619 (4th Cir. 1988) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24: III, 24: III[A], 24: V[B] In re Merck & Co., 800 F.2d 1091 (Fed. Cir. 1986) . . . . . . . . . . . . . . . . . . . . . 8: VI[C][2] In re Monks, 588 F.2d 308 (CCPA 1978) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7: V In re Neuhoff Farms, Inc., 258 B.R. 343 (Bankr. E.D.N.C. 2000) . . . . . . . 22: V[A][2][e] In re Nomiya, 509 F.2d 566 (CCPA 1975) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8: VI[E] In re Nuijten, 500 F.3d 1346 (Fed. Cir. 2007) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9: VI[A] In re O’Farrell, 853 F.2d 894 (Fed. Cir. 1988). . . . . . . . . . . . . . . . . . 8: II[C], 8: VI[C][2] In re Omeprazole Patent Litig., 483 F.3d 1364 (Fed. Cir. 2007) . . . . . . . . . 6: V, 6: V[A], 11: III[C][2], 11: III[C][3], 12: V[A], 18: IV[A], 18: IV[B]

Case, Statute, and Rule Index 983 In re Peregrine Entertainment, Ltd., 116 B.R. 194 (C.D. Cal. 1990) . . . . . . . . . . . 22: VI In re Pioneer Hi-Bred Int’l, Inc., 238 F.3d 1370 (Fed. Cir. 2001) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19: VII[B], 19: VII[C], 24: VI[B] In re Regents of the Univ of Cal., 101 F.3d 1386 (Fed. Cir. 1996) . . . . . . . . . . 24: VI[E] In re Ruschig, 379 F.2d 990 (C.C.P.A. 1967). . . . . . . . . . . . . . . . . . . . . . . . .9: II, 9: III[A] In re Seagate Tech, L.L.C., 497 F.3d 1360 (Fed. Cir. 2007) (en banc) . . . . . . . . . . . . . . . . . . . .13: I, 13: II, 13: II[A], 13: II[C], 13: V, 14: IV[A], 14: V[D], 16: III[A][4], 20: IV[A], 23: I[C], 24: II[A], 24: III, 24: III[A], 24: IV[B], 24: V[C] In re Serenkin, 479 F.3d 1359 (Fed. Cir. 2007) . . . . . . . . . . . . . . . . . . . . . 19: V[A], 21: II In re Smith, 458 F.2d 1389 (CCPA 1972) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9: III[G] In re Smith, 481 F.2d 910 (CCPA 1973) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9: III[C] In re Sneed, 710 F.2d 1544 (Fed. Cir. 1983) . . . . . . . . . . . . . . . . . . 15: II, 21: I, 21: II[A] In re Sovish, 769 F.2d 738 (Fed. Cir. 1985) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8: V[B] In re Spalding Sports Worldwide, Inc., 203 F.3d 800 (Fed. Cir. 2000) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19: VII[B], 24: VI[B] In re Stac Elec. Sec. Litig., 89 F.3d 1399 (9th Cir. 1996) . . . . . . . . . . . . . . . . . . . .16: II[I] In re Storm Tech., Inc., 260 B.R. 152 (Bankr. N.D. Cal. 2001) . . . . . . . . . . . .22: V[B][4] In re Sunterra Corp., 361 F.3d 257 (4th Cir. 2004) . . . . . . . . . . . . . . . . . . . . 22: V[A][2] In re Swanson, 540 F.3d 1368 (Fed. Cir. 2008) . . . . . . . . . . . . . 15: II, 15: III, 15: III[A], 19: V[B], 21: I, 21: I[A] In re Talbott, 443 F.2d 1397 (CCPA 1971) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7: V In re Theis, 610 F.2d 786 (CCPA 1979) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7: II[B] In re Thorpe, 777 F.2d 695 (Fed. Cir. 1985) . . . . . . . . . . . .2: V[G], 2: V[G][1], 3: V[B], 4: III[F], 6: VII[B][1], 6: VII[B][2], 8: X[B][1] In re Together Dev. Corp., 227 B.R. 439 (D. Mass. 1998) . . . . . . . . . . . . . . . . . . . . 22: VI In re Transportation Design & Tech., Inc., 48 B.R. 635 (Bankr. S.D. Cal. 1985) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22: VI In re Trans Texas Holdings Corp., 498 F.3d 1290 (Fed. Cir. 2007) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2: V[B], 15: II, 15: II[A], 15: III, 15: III[A], 15: IV[A], 21: I, 21: I[A], 21: V[A] In re Wallach, 378 F.3d 1330 (Fed. Cir. 2004) . . . . . . . . . . . . . . . . . . . . . . . . . . . 9: III[G] In re Wands, 858 F.2d 731 (Fed. Cir. 1988) . . . . . . . 6: V[A], 6: V[D], 9: II[B], 9: II[G] In re Weiler, 790 F.2d 1576 (Fed. Cir. 1986). . . . . . . . . . . . . . . . . . . . . . . 19: V[A], 21: II In re West Electronics, Inc., 852 F.2d 79 (3d Cir. 1988) . . 22: V[A][2], 22: V[A][2][e] In re Wilder, 736 F.2d 1516 (Fed. Cir. 1984) . . . . . . . . . . . . . . . . . . . . . . 19: V[A], 21: II In re Wood, 599 F.2d 1032 (CCPA 1979) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8: V[B] In re Wyer, 655 F.2d 221 (C.C.P.A. 1981). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6: IV In re Yamamoto, 740 F.2d 1569 (Fed. Cir. 1984) . . . . . . . . . . . . 15: II, 15: II[A], 15: III, 15: III[A], 15: IV[A], 21: I, 21: I[A], 21: II, 21: V[A] In re Zletz, 893 F.2d 319 (Fed. Cir. 1989) . . . . . . . . . . . . . . . . . . . . . . . 15: II, 21: I, 21: II Insituform Techs., Inc. v. Cat Contr., Inc., 385 F.3d 1360 (Fed. Cir. 2004) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4: III[A][1] Institut Pasteur v. Cambridge Biotech Corp., 104 F.3d 489 (1st Cir. 1997) . . . . . . . . . . . . . . .22: V, 22: V[A][2], 22: V[A][2][b], 22: V[A][2][e] Institut Pasteur v. Cambridge Biotech Corp. (In re Cambridge Biotech Corp.), 186 F.3d 1356 (Fed. Cir. 1999) . . . . . . . . . . . . 19: VII[B], 24: VI[B]

984 Case, Statute, and Rule Index Integra Lifesciences I, Ltd. v. Merck KGaA, 496 F.3d 1334 (Fed. Cir. 2007) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5: III[B][1] Intel Corp. v. ITC, 946 F.2d 821 (Fed. Cir. 1991) . . . . . . . . . . . . . . . . . . . . . 8: VIII[C][3] Intel Corp. v. VIA Techs., Inc., 319 F.3d 1357 (Fed. Cir. 2003) . . . . . . . . . . . 2: IV[C][4] Interactive Gift Express, Inc. v. Compuserve, Inc., 256 F.3d 1323 (Fed. Cir. 2001) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2: IV[C][2][b][1] Interactive Pictures Corp. v. Infinite Pictures, Inc., 274 F.3d 1371 (Fed. Cir. 2001) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2: V[F][2][b][1], 3: V[A][2][b], 4: I[D], 4: III[D], 6: VII[A][2][b], 8: X[A][2][b] Intirtool, Ltd. v. Texar Corp., 369 F.3d 1289 (Fed. Cir. 2004) . . . . 2: V[H], 2: V[H][1] Int’l Glass Co. v. United States., 408 F.2d 395 (Ct. Cl. 1969) . . . . . . . . . . . . . . . . . . 7: IV Int’l Rectifier Corp. v. IXYS Corp., 515 F.3d 1353 (Fed. Cir. 2008) . . . . . . . . 4: III[A][1] Int’l Rectifier v. Samsung Elecs. Co., 361 F.3d 1355 (Fed. Cir. 2004) . . . . . . . . . 5: II[C] Int’l Visual Corp. v. Crown Metal Mfg. Co., 991 F.2d 768 (Fed. Cir. 1993) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3: IV[A][1] Intra Corp. v. Hamar Laser Instruments, Inc., 662 F. Supp. 1420 (E.D. Mich. 1987) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13: II[B] Inverness Med. Switz. GmgH v. Warner Lambert Co., 309 F.3d 1373 (Fed. Cir. 2002) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2: IV[B][2][c], 2: IV[C][2][b][3] Invitrogen Corp. v. Biocrest Mfg., L.P., 424 F.3d 1374 (Fed. Cir. 2005) . . . . . . 7: III[A] Invitrogen Corp. v. Biocrest Mfg., L.P., 327 F.3d 1364 (Fed. Cir. 2003) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2: V[I][1] Ishida Co., Ltd. v. Taylor, 221 F.3d 1310 (Fed. Cir. 2000) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2: V[F][2][b][1], 3: V[A][2][b], 4: III[E][3][a], 6: VII[A][2][b], 8: X[A][2][b] Israel Bio-Engineering Project v. Amgen Inc., 475 F.3d 1256 (Fed. Cir. 2007) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17: VII[A], 18: VI[D] I.T.S. Rubber Co. v. Essex Rubber Co., 272 U.S. 429 (1926) . . . . . . . . . . . . . . . . . . 21: IV

J Jaffee v. Redmond, 518 U.S. 1, 116 S. Ct. 1923, 135 L. Ed. 2d 337 (1996) . . . . 24: IV[B] Jeneric/Pentron, Inc. v. Dillon Co., Inc., 205 F.3d 1377 (Fed. Cir. 2000) . . . . . . . . . . . . . . . . . . . . 3: IV[D], 11: III[C][4], 12: V[C], 18: IV[B] J & M Corp. v. Harley-Davidson, Inc., 269 F.3d 1360 (Fed. Cir. 2001) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4: III[B] Johns Hopkins Univ. v. CellPro, Inc., 152 F.3d 1342 (Fed. Cir. 1998) . . . . . . . . . . . . . . . . . . . . . . . . 10: II, 10: V[A], 16: III[A][9], 23: I[E], 23: I[J], 23: I[M], 23: II Johnson Elec. N. Am. Inc. v. Mabuchi N. Am. Corp., 1996 U.S. Dist. LEXIS 5227 (S.D.N.Y. 1996) . . . . . . . . . . . . . . . 4: III[C], 19: VII[E], 24: VI[E] Johnson & Johnston Assocs. Inc. v. R.E. Serv. Co., 285 F.3d 1046 (Fed. Cir. 2005) (en banc) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4: III[C] Johnson Worldwide Assocs., Inc. v. Zebco Corp., 175 F.3d 985 (Fed. Cir. 1999) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2: IV[C][3][a], 2: V[B] Johnston v. Ivax Corp., 885 F.2d 1574 (Fed. Cir. 1989) . . . . . . . . . . . . . . . . . . . 2: V[F][1] Jonsson v. Stanley Works, 903 F.2d 812 (Fed. Cir. 1990) . . . . . . . . . . . . . . . . . . . 23: I[C] Joseph v. Valencia, Inc. (In re 199Z, Inc.), 137 B.R. 778 (C.D. Cal. 1992) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22: VI

Case, Statute, and Rule Index 985 Joy Technologies v. Flakt, Inc., 6 F.3d 770 (Fed. Cir. 1993) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5: I[B][1], 5: I[C][1], 5: II[A] J.T. Eaton & Co. v. Atlantic Paste & Glue Co., 106 F.3d 1563 (Fed. Cir. 1997) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8: VIII[A] Judin v. United States, 110 F.3d 780 (Fed. Cir. 1997) . . . . . . . . . . . . . . . . . . . . . . . . 14: II[A], 14: II[B], 20: II[A], 20: II[B] Jumpsport, Inc. v. Jumpking, Inc., 191 Fed. Appx. 926 (Fed. Cir. 2006) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7: III[A] Jurgens v. CBK, Ltd., 80 F.3d 1566 (Fed. Cir. 1996) . . . . . . . . . . . . . . . . . . . . . . . .16: III[A][4], 23: I[C], 23: I[F], 23: I[J] JVW Enters, Inc. v. Interact Accessories, Inc., 424 F.3d 1324 (Fed. Cir. 2005) . . . . . . . . . . . . . . . . . . . . . 2: V[F][2][a], 2: V[F][2][b], 3: V[A][2][b]

K Kao Corp. v. Unilever United States, Inc., 441 F.3d 963 (Fed. Cir. 2006) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8: VIII[C][2] Katz v. AT& T Corp., 191 F.R.D. 433 (E.D. Pa. 2000) . . . . . . . . . . . . . . . 19: VII[E], 19: VII[F][3], 24: VI[E], 24: VI[F][3] Kegel Co. v. AMF Bowling, 127 F.3d 1420 (Fed. Cir. 1997) . . . . . . . . . . . . . . 3: IV[B][3] Kemin Foods, L.C. v. Pigmentos Vegetales Del Centro S.A. De C.V., 464 F.3d 1339 (Fed. Cir. 2006) . . . . . . . . . . . . . . . 12: VI, 12: VI[A], 18: V, 18: V[A] Key Pharms. v. Hercon Labs. Corp., 161 F.3d 709 (Fed. Cir. 1998) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2: IV[C][4], 6: II, 17: VI Kimberly-Clark Corp. v. Johnson & Johnson, 745 F.2d 1437 (Fed. Cir. 1984) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8: III, 8: V[A], 12: VI[C] Kimmelman v. Port Authority of New York and New Jersey (In re Kiwi Int’l Airlines, Inc.), 344 F.3d 311 (3d Cir. 2003) . . . . . . . . . . . . . . . 22: V Kim v. ConAgra Foods, Inc., 465 F.3d 1312 (Fed. Cir. 2006) . . . . . . . . . 19: V[A], 21: II King Instrument Corp. v. Otari Corp., 767 F.2d 853 (Fed. Cir. 1985) . . . . . . . . . . . . 23: I Kingsdown Med. Consultants, Ltd. v. Hollister, Inc., 863 F.2d 867 (Fed. Cir. 1988) (en banc) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10: II[D], 10: II[E] Kloster Speedsteel AB v. Crucible Inc., 793 F.2d 1565 (Fed. Cir. 1986) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13: II[C] Knorr-Bremse Systeme Fuer Nutzfahrzeuge GmbH v. Dana Corp., 383 F.3d 1337 (Fed. Cir. 2004) (en banc) . . . . . . . . . . . . . . . . . . .13: II[A], 13: II[C], 13: III, 13: VI[B], 24: II, 24: II[A], 24: IV[B], 24: V[C] Kolmes v. World Fibers Corp., 107 F.3d 1534 (Fed. Cir. 1997) . . . . . . . . . . . . . . 7: II[B] Kori Corp. v. Wilco Marsh Buggies and Draglines, Inc., 561 F. Supp. 512 (E.D. La. 1982) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13: II[B] Kori Corp. v. Wilco Marsh Buggies & Draglines, 761 F.2d 649 (Fed. Cir. 1985) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .23: I[E], 23: I[I] Kropa v. Robie, 187 F.2d 150 (CCPA 1951) . . . . . . . . . . . . . . . . . . . . . . . . . . . 2: V[H][1] KSR Int’l Co. v. Teleflex, Inc., 127 S. Ct. 1727, 167 L. Ed. 2d 705 (2007) . . . . . . . . . . . . . . . . . 8: I, 8: II[C], 8: IV, 8: V[B], 8: VI[A], 8: VI[A][1], 8: VI[B], 8: VI[C][1], 8: VI[C][2], 8: VI[D], 8: VII[C], 17: VI[C] Kyocera Wireless Corp. v. ITC, 545 F.3d 1340 (Fed. Cir. 2008) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6: IV, 6: VI[C]

986 Case, Statute, and Rule Index

L Laitram Corp. v. NEC Corp., 952 F.2d 1357 (Fed. Cir. 1991) . . . . . . . . . . . 3: IV[B][3], 15: II, 15: II[A], 15: III, 15: III[A], 21: I, 21: I[A] Landis v. N. Am. Co., 299 U.S. 248, 57 S. Ct. 163, 81 L. Ed. 153 (1936) . . . . 15: II, 21: I L.B. Plastics, Inc. v. Amerimax Home Prods., 499 F.3d 1303 (Fed. Cir. 2007) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4: III[B] Leggett & Platt, Inc. v. VUTEk, Inc., 537 F.3d 1349 (Fed. Cir. 2008) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6: VI[A], 11: III[C][3] Lemelson v. Gen. Mills, Inc., 968 F.2d 1202 (Fed. Cir. 1992) . . . . .14: IV[A], 20: IV[A] Le Roy v. Tatham, 55 U.S. (14 How.) 156, 14 L. Ed. 367 (1852) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9: VI, 17: VI[E] Lexion Med., LLC v. Northgate Techs., Inc., 292 Fed. Appx. 42 (Fed. Cir. 2008) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13: V, 13: VII[A], 24: IV, 24: V Libbey Glass, Inc. v. Oneida Ltd., 197 F.R.D. 342 (N.D. Ohio 1999) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19: VII[E], 24: VI[E] Liebel-Flarsheim Co. v. Medrad, Inc., 358 F.3d 898 (Fed. Cir. 2004) . . . . . . . . . . . . . . . . . . . . . . . 2: IV[C][3][a], 2: V[B], 2: V[E], 2: V[I] Liebel-Flarsheim Co. v. Medrad, Inc., 481 F.3d 1371 (Fed. Cir. 2007) . . . . . . . . 9: II[F] Lighting World, Inc. v. Birchwood Lighting, Inc., 382 F.3d 1354 (Fed. Cir. 2004) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2: V[F][1] Lightwave Technologies, Inc. v. Corning Glass Works, 19 USPQ2d 1838 (S.D.N.Y. 1991) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13: II[B] Lindemann Maschinenfabrik GmbH v. American Hoist & Derrick Co., 730 F.2d 1452 (Fed. Cir. 1984) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6: VI[C] Linear Tech. Corp. v. Impala Linear Corp., 379 F.3d 1311 (Fed. Cir. 2004) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5: I[B][1], 5: I[C][1] Liquid Dynamics Corp. v. Vaughan Co., 449 F.3d 1209 (Fed. Cir. 2006) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5: I[B] Li Second Family L.P. v. Toshiba Corp., 231 F.3d 1373 (Fed. Cir. 2000) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10: II[C], 12: VI[A], 18: V[A] Litton Sys., Inc. v. Honeywell, Inc., 140 F.3d 1449 (Fed. Cir. 1998) . . . . . . . . 4: III[A][2] Lockheed Martin Corp. v. Space Systems/Loral, Inc., 249 F.3d 1314 (Fed. Cir. 2001) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5: I[A] Lockwood v. Am. Airlines, Inc., 107 F.3d 1565 (Fed. Cir. 1997) . . . . . . . . . . . . 9: III[D] Lough v. Brunswick Corp., 86 F.3d 1113 (Fed. Cir. 1996) . . . . . . . . . . . . . . . . . . 7: III[A] Lubrizol Enterprises, Inc. v. Richmond Metal Finishers, Inc., 756 F.2d 1043 (4th Cir. 1985) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .22: V[B][1] Luce v. Edelstein, 802 F.2d 49 (2d Cir. 1986) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .16: II[I]

M 3M v. Barr Labs. Inc., 289 F.3d 775 (Fed. Cir. 2002) . . . . . . . . . . . . 14: III[C], 20: III[C] M. Eagles Tool Warehouse, Inc. v. Fisher Tooling Co., 439 F.3d 1335 (Fed. Cir. 2006) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10: II[D] Mahurkar v. C.R. Bard, Inc., 79 F.3d 1572 (Fed. Cir. 1996) . . . . . . . . . . . . . . . . 7: VII[B] Mallinckrodt, Inc. v. Medipart, Inc., 976 F.2d 700 (Fed. Cir. 1992) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10: IV[A], 10: IV[E], 19: IV[B] Mannesmann Demag Corp. v. Engineered Metal Products Co., 793 F.2d 1279 (Fed. Cir. 1986) . . . . . . . . . . . . . . . . . . . . . . .2: V[I][3][a], 3: IV[C][3]

Case, Statute, and Rule Index 987 Manville Sales Corp. v. Paramount Sys. Inc., 917 F.2d 544 (Fed. Cir. 1990) . . . . . . . . . . . . . . 5: I[B][3], 5: I[B][4], 5: I[B][7], 7: II[B], 13: VI[A] Markman v. Westview Instruments, Inc., 52 F.3d 967 (Fed. Cir. 1995) (en banc) . . . . . . . . . . . . . . . . . 2: IV[A], 2: IV[B][1], 2: IV[B][2][b], 2: IV[C][2][a], 2: IV[C][2][b], 2: IV[C][2][b][3], 2: IV[C][4], 11: III[A], 11: III[A][1], 11: III[A][2], 12: III, 12: III[A], 12: III[B], 14: IV[A], 17: III, 18: II, 18: II[A], 18: II[B], 20: IV[A] Marquip, Inc. v. Fosber Am., Inc., 198 F.3d 1363 (Fed. Cir. 1999) . . . . . . . . . . 4: III[D] Martin v. Mayer, 823 F.2d 500 (Fed. Cir. 1987). . . . . . . . . . . . . . . . . . . . . . . . . . .9: III[E] Marvel Specialty Co. v. Bell Hosiery Mills, Inc., 386 F.2d 287 (4th Cir. 1967) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13: I, 13: III Mas-Hamilton Group v. LaGard, Inc., 156 F.3d 1206 (Fed. Cir. 1998) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3: IV[B][1], 3: V[A][2][a] Massachusetts Institute Of Technology v. Abacus Software, 462 F.3d 1344 (Fed. Cir. 2006) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2: V[F][1] MBO Labs., Inc. v. Becton, Dickinson & Co., 474 F.3d 1323 (Fed. Cir. 2007) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2: V[B], 2: V[C], 2: V[I], 21: II[A] McKesson Info. Solutions, Inc. v. Bridge Med., Inc., 487 F.3d 897 (Fed. Cir. 2007) . . . . . . . . . . . . . . . . . . . . . . . . 10: II[B], 10: II[C], 10: II[E], 10: II[G] McNeil-PPC, Inc. v. L. Perrigo Co., 337 F.3d 1362 (Fed. Cir. 2003) . . . . . 8: VIII[C][1] Mead v. McKirnan, 585 F.2d 504 (CCPA 1978) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7: VI Med. Instrumentation & Diagnostics Corp. v. Elekta AB, 344 F.3d 1205 (Fed. Cir. 2003) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9: V[F] MedImmune, Inc. v. Genentech, Inc., 549 U.S. 118, 127 S. Ct. 764 (2007) . . . . . . 19: VI Medrad, Inc. v. MRI Devices Corp., 401 F.3d 1313 (Fed. Cir. 2005) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2: IV[C][2][b] Medtronic, Inc. v. Guidant Corp., 465 F.3d 1360 (Fed. Cir. 2006) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19: V[A], 21: II Mehl/Biophile Int’l Corp. v. Milgraum, 192 F.3d 1362 (Fed. Cir. 1999) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6: VI[A] MEMC Elec. Materials, Inc. v. Mitsubishi Materials Silicon Corp., 420 F.3d 1369 (Fed. Cir. 2005) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5: I[B][5] Mentor Corp. v. Coloplast, Inc., 998 F.2d 992 (Fed. Cir. 1993) . . . . . . . 19: V[A], 21: II Mentor H/S, Inc. v. Med. Device Alliance, Inc., 244 F.3d 1365 (Fed. Cir. 2001) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5: I[B][6] Merck & Co. v. Biocraft Labs., Inc., 874 F.2d 804 (Fed. Cir. 1989) . . . . . . 8: VIII[C][2] Merck & Co. v. Teva Pharm. USA, Inc., 347 F.3d 1367 (Fed. Cir. 2003) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8: VII[B] Merck & Co. v. Teva Pharms. USA, Inc., 395 F.3d 1364 (Fed. Cir. 2005) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8: II[C], 8: VIII[C][1] Merck KGaA v. Integra Lifesciences I, Ltd., 545 U.S. 193, 125 S. Ct. 2372, 162 L. Ed. 2d 160 (2005) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5: III[B][1] Merrill v. Yeomans, 94 U.S. 568, 24 L. Ed. 235, 1877 Dec. Comm’r Pat. 279 (1877) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17: III Metabolite Labs., Inc. v. Lab. Corp. of Am. Holdings, 370 F.3d 1354 (Fed. Cir. 2004) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5: I[B][6] Metallizing Engineering Co. v. Kenyon Bearing & Auto Parts Co., 153 F.2d 516 (2nd Cir. 1946) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7: II[A]

988

Case, Statute, and Rule Index Metro-Goldwyn-Mayer Studios, Inc. v. Grokster, Ltd., 545 U.S. 913, 125 S. Ct. 2764, 162 L. Ed. 2d 781 (2005) . . . . . . . . . . . . . . . . . . 5: I[B][6], 13: VI[A] Microsoft Corp. v. AT&T Corp., 127 S. Ct. 1746, 550 U.S. 437, (U.S. 2007) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5: I[D][1], 5: I[D][2], 5: I[D][3] Microsoft Corp. v. DAK Indus. (In re DAK Indus.), 66 F.3d 1091 (9th Cir. 1995) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22: V Microsoft Corp. v. Multi-Tech Sys., Inc., 357 F.3d 1340 (Fed. Cir. 2004) . . . . . . . . . . . 9: V[E][2], 11: III[A][2], 12: III[B], 18: II[B], 23: I[C] Midwest Indus., Inc. v. Karavan, 175 F.3d 1356 (Fed. Cir. 1999) (en banc) . . . . . . . . . . . . . . . . . . . . . . 14: II[A], 20: II[A], 24: VI[B] Milgo Electronic Corp. v. United Business Communications, Inc., 623 F.2d 645 (10th Cir. 1980) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13: I, 13: III Minn. Mining & Mfg. Co. v. Chemque, Inc., 303 F.3d 1294 (Fed. Cir. 2002) . . . . . . . . . . . . . . . . . . . .5: I[B][3], 6: V, 6: V[A], 8: V[D], 13: VI[A] Minn. Mining & Mfg. Co. v. Johnson & Johnson Orthopaedics, Inc., 976 F.2d 1559 (Fed. Cir. 1992) . . . . . . . . . . . . . . . . .8: VIII[C][3], 12: VI, 12: VI[A], 16: III[A][4], 16: III[A][6], 18: V, 18: V[A], 23: I, 23: I[F], 23: I[H] Modine Mfg. Co. v. Allen Group, Inc., 917 F.2d 538 (Fed. Cir. 1990) . . . . . . . . 13: II[B] Moldo v. Matsco, Inc. (In re Cybernetic Servs.), 252 F.3d 1039 (9th Cir. 2001) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22: V, 22: VI Moleculon Res. Corp. v. CBS, Inc., 793 F.2d 1261 (Fed. Cir. 1986) . . . . . . 15: IV, 21: V Molins PLC v. Textron, Inc., 48 F.3d 1172 (Fed. Cir. 1995) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10: II[D], 10: II[G] Monsanto Co. v. Bayer BioScience B.V., 363 F.3d 1235 (Fed. Cir. 2004) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10: II[F] Monsanto Co. v. McFarling, 363 F.3d 1336 (Fed. Cir. 2004) . . . . . . . . . . . . . . 10: IV[A] Monsanto Co. v. Mycogen Plant Sci., Inc., 261 F.3d 1356 (Fed. Cir. 2001) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7: VII[B] Monsanto Co. v. Syngenta Seeds, Inc., 503 F.3d 1352 (Fed. Cir. 2007) . . . . . . . 3: IV[D] Moore U.S.A., Inc. v. Standard Register Co., 229 F.3d 1091 (Fed. Cir. 2000) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4: III[B] Morgan Creek Prods., Inc. v. Franchise Pictures LLC (In re Franchise Pictures LLC), 389 B.R. 131 (C.D. Cal. 2008) . . . . . . . . . . . . . . . . . . . . . . . . . . . 22: VI Morrow v. Microsoft Corp., 499 F.3d 1332 (Fed. Cir. 2007) . . . . . . . . . . . . . . . . . . 22: VI Morton Salt Co. v. G. S. Suppiger Co., 314 U.S. 488, 86 L. Ed. 363, 62 S. Ct. 402 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10: IV[C], 10: IV[F], 19: IV[B] Multiform Desiccants, Inc. v. Medzam, Ltd., 133 F.3d 1473 (Fed. Cir. 1998) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4: I[D] Muniauction, Inc. v. Thomson Corp., 532 F.3d 1318 (Fed. Cir. 2008) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5: II, 5: II[A], 5: II[B], 5: II[C] Mylan Pharms., Inc. v. Thompson, 268 F.3d 1323 (Fed. Cir. 2001) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14: III[C], 20: III[A], 20: III[C]

N N. Am. Container, Inc. v. Plastipak Packaging, Inc., 415 F.3d 1335 (Fed. Cir. 2005) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6: II, 17: VI[A], 21: II N. Telecom, Inc. v. Datapoint Corp., 908 F.2d 931 (Fed. Cir. 1990) . . . . . . . . . . . . 6: IV

Case, Statute, and Rule Index 989 N. Telecom Ltd. v. Samsung Elec. Co., 215 F.3d 1281 (Fed. Cir. 2000) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9: IV[A], 9: IV[B] Nathenson v. Zonagen Inc., 267 F.3d 400 (5th Cir. 2001) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16: II[A][2], 16: II[E] National Presto Indus., Inc. v. West Bend Co., 76 F.3d 1185 (Fed. Cir. 1996) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5: I[B][2] Nat’l Recovery Techs., Inc. v. Magnetic Separation Sys., Inc., 166 F.3d 1190 (Fed. Cir. 1999) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9: II[A] Nat’l Union Fire Ins. Co. v. Murray Sheet Metal Co., 967 F.2d 980 (4th Cir. 1992) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24: III Nazomi Communications, Inc. v. Arm Holdings, PLC, 403 F.3d 1364 (Fed. Cir. 2005) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2: V[B] Net Moneyin, Inc. v. Verisign, Inc., 545 F.3d 1359 (Fed. Cir. 2008) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6: I, 6: VI[B], 6: VI[C], 7: I, 8: I, 9: V[F], 9: V[F][2], 9: V[G] Neurosciences, Inc. v. Cadus Pharm. Corp., 225 F.3d 1349 (Fed. Cir. 2000) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8: II[C] Newell Cos. v. Kenney Mfg. Co., 864 F.2d 757 (Fed. Cir. 1988) . . . . . . . . . 8: VIII[C][1] Nobelpharma AB v. Implant Innovations, Inc., 141 F.3d 1059 (Fed. Cir. 1998) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9: IV[B], 10: II[F] Nordberg, Inc. v. Telsmith, Inc., 82 F.3d 394 (Fed. Cir. 1996) . . . . . . . . . . . . . . 10: II[G] Norian Corp. v. Stryker Corp., 363 F.3d 1321 (Fed. Cir. 2004) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2: V[I][3], 3: IV[C][3] Northwest Airlines, Inc. v. Transp. Workers, 451 U.S. 77, 101 S. Ct. 1571, 67 L. Ed. 2d 750 (1981) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14: III[C] Novo Indus., L.P. v. Micro Molds Corp., 350 F.3d 1348 (Fed. Cir. 2003) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9: V[C], 9: V[G], 21: IV Novo Nordisk Pharm., Inc. v. Bio-Technology Gen. Corp., 424 F.3d 1347 (Fed. Cir. 2005) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6: V[B], 10: II[C] NTP, Inc. v. Research in Motion, 418 F.3d 1282 (Fed. Cir. 2005) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5: I[D][2], 5: II[C], 5: II[D], 11: III[A][2], 12: III[B], 18: II[B], 23: I[C] Nystrom v. Trex Co., Inc., 424 F.3d 1136 (Fed. Cir. 2005) . . . . . . . . . . . . . . . . . . . . . . . 2: IV[C][1], 2: IV[C][2], 2: IV[C][2][a], 2: IV[C][2][b][2], 2: IV[C][3][b], 11: III[A][2], 12: III[B], 18: II[B], 23: I[D]

O Oak Industries v. Zenith Industries, 1988 U.S. Dist. LEXIS 7985 (N.D. Ill. 1988) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24: VI[E] Oakley, Inc. v. Sunglass Hut Int’l, 316 F.3d 1331 (Fed. Cir. 2003) . . . . . . . . . . . . . . . . . . . 9: V[E], 14: IV, 14: IV[A], 20: IV, 20: IV[A] OddzOn Prods. v. Just Toys, 122 F.3d 1396 (Fed. Cir. 1997) . . . . . . . . . . .8: V[A], 8: IX Odetics, Inc. v. Storage Tech. Corp., 185 F.3d 1259 (Fed. Cir. 1999) . . . . . . . . . . . . . . . . . . . . 2: V[F][2][b][1], 3: V[A][1], 3: V[A][2][b], 6: VII[A][2][b], 8: X[A][2][b] Office of Thrift Supervision v. Vinson & Elkins, LLP, 124 F.3d 1304 (D.C. Cir. 1997) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24: III

990 Case, Statute, and Rule Index Olkey v. Hyperion 1999 Term Trust, 98 F.3d 2 (2d Cir. 1996). . . . . . . . . . . . . . .16: II[I] Omega Eng’g, Inc. v. Raytek Corp., 334 F.3d 1314 (Fed. Cir. 2003) . . . . . . . . . 2: IV[C][3][b], 2: V[F][2][a], 2: V[F][2][b], 3: V[A][2], 3: V[A][2][a], 3: V[A][2][b], 4: III[A][2], 6: I, 6: VII[A][1]–[2][a], 6: VII[A][2][b], 7: I, 8: X[A][2][a], 8: X[A][2][b], 23: I[C] On Demand Mach. Corp. v. Ingram Indus., Inc., 442 F.3d 1331 (Fed. Cir. 2006) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2: V[H][1], 5: II[B] On-Line Techs., Inc. v. Bodenseewerk Perkin-Elmer GmbH, 386 F.3d 1133 (Fed. Cir. 2004) . . . . . . . . . . . . . . . . . . . . . . . . . . . 2: IV[C][4], 2: V[C] O’Reilly v. Morse, 56 U.S. (15 How.) 62, 14 L. Ed. 601 (1853) . . . . . . . . . . . . . . . . . 9: III Ormco Corp. v. Align Tech., Inc., 463 F.3d 1299 (Fed. Cir. 2006) . . . . . . . . . . . . . . . . . . . . . . . . . . 8: II[C], 8: V[A], 8: VIII, 8: VIII[A] Orthokinetics, Inc. v. Safety Travel Chairs, Inc., 806 F.2d 1565 (Fed. Cir. 1986) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5: I[B][7] Orthopedic Equip. Co. v. All Orthopedic Appliances, Inc., 707 F.2d 1376 (Fed. Cir. 1983) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8: VII[A] Ortho Pharm. Corp. v. Smith, 959 F.2d 936 (Fed. Cir. 1992) . . . . . . . . . . . . . . . . . . . . . . . . . . . 14: IV[A], 16: III[A][8], 20: IV[A], 23: I, 23: I[G], 23: I[J], 24: III[A], 24: V[B]

P Pall Corp. v. Micron Separations, Inc., 66 F.3d 1211 (Fed. Cir. 1995) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9: V[E][3] Panduit Corp. v. Dennison Mfg. Co., 774 F.2d 1082 (Fed. Cir. 1985) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8: VIII[C][3] Panduit Corp. v. Dennison Mfg. Co., 810 F.2d 1561 (Fed.Cir. 1987) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15: II, 21: I Panduit Corp. v. Dennison Mfg. Co., 836 F.2d 1329 (Fed. Cir. 1987) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3: IV[E] Pannu v. Iolab Corp., 155 F.3d 1344 (Fed. Cir. 1998) . . . . . . . . . . 17: VII[A], 18: VI[B] Pannu v. Storz Instruments, Inc., 258 F.3d 1366 (Fed. Cir. 2001) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21: II, 21: II[A], 21: VII[C] Paperless Accounting, Inc. v. Bay Area Rapid Transit System, 804 F.2d 659 (Fed. Cir. 1986) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6: III Parker v. Flook, 437 U.S. 584, 98 S. Ct. 2522, 57 L. Ed. 2d 451 (1978) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9: VI, 9: VI[A], 17: VI[E] Pennwalt Corp. v. Durand-Wayland, Inc., 833 F.2d 931 (Fed. Cir. 1987) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3: V[A][2][b] Periman Corp. v. United States, 665 F.2d 1214 (D.C. Cir. 1981) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .19: VII[D], 24: VI[D] Perlman v. Catapult Entertainment (In re Catapult Entertainment), 165 F.3d 747 (9th Cir. 1999) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22: V, 22: V[A][2], 22: V[A][2][a], 22: V[A][2][e] Perricone v. Medicis Pharm. Corp., 432 F.3d 1368 (Fed. Cir. 2005) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6: VI[A] PerSeptive Biosystems, Inc. v. Pharmacia Biotech, Inc., 225 F.3d 1315 (Fed. Cir. 2000) . . . . . . . . . . 10: II[C], 11: III[D], 12: VI, 12: VI[B], 18: V, 18: V[B] Pfaff v. Wells Elecs, 525 U.S. 55 (1998) . . . . . . . . . . . . . . . . 7: II[A], 7: II[A][2], 7: II[B]

Case, Statute, and Rule Index 991 Pfizer, Inc. v. Apotex, Inc., 480 F.3d 1348 (Fed. Cir. 2007) . . . . . . . . . . . . . . . . . . . . . . . . . 8: VI[C][2], 8: VIII[B], 8: VIII[C][2] Pfizer, Inc. v. Teva Pharms. USA, Inc., 518 F.3d 1353 (Fed. Cir. 2008) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9: IV[A], 9: IV[C], 10: II[E] Pfizer, Inc. v. Teva Pharms. USA, Inc., 429 F.3d 1364 (Fed. Cir. 2005) . . . . . . . . . . . . . . . 2: IV[C][2], 2: IV[C][2][b][2], 2: V[C], 4: III[C] Pfizer, Inc. v. Dr. Reddy’s Laboratories, Ltd., 359 F.3d 1361 (Fed. Cir. 2004) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8: VI[C][2] P&G v. Kraft Foods Global, Inc., 549 F.3d 842 (Fed. Cir. 2008) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15: II, 15: III[A], 21: I[A] Pharmacia Corp. v. Par Pharm., Inc., 417 F.3d 1369 (Fed. Cir. 2005) . . . . . . . 10: II[C] Pharmacia & Upjohn Co. v. Mylan Pharms., Inc., 170 F.3d 1373 (Fed. Cir. 1999) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4: III[A][2] Pharmacia & Upjohn Co. v. Mylan Pharms., Inc., 182 F.3d 1356 (Fed. Cir. 1999) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14: II[C], 20: II[C] Pharmastem Therapeutics, Inc. v. Viacell, Inc., 491 F.3d 1342 (Fed. Cir. 2007) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8: VI[C][2], 8: VI[E] Phillips v. AWH Corp., 415 F.3d 1303 (Fed. Cir. 2005) (en banc) . . . . . . . . . . . . . . . . . 2: IV[A], 2: IV[B][1], 2: IV[B][2][b], 2: IV[B][2][c], 2: IV[C][2], 2: IV[C][2][a], 2: IV[C][2][b], 2: IV[C][2][b][1], 2: IV[C][2][b][2], 2: IV[C][2][b][3], 2: IV[C][3][a], 2: IV[C][3][b], 2: IV[C][4], 2: V[B], 2: V[D], 2: V[E], 2: V[F][1], 2: V[I], 2: V[I][3], 3: IV[C][3], 4: I[B], 9: V[E], 11: III[A], 11: III[A][1], 11: III[A][2], 12: III, 12: III[A], 12: III[B], 17: III, 18: II, 18: II[A], 18: II[B], 23: I[D] Phonometrics, Inc. v. Northern Telecom Inc., 133 F.3d 1459 (Fed. Cir. 1998) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2: V[D] Pioneer Magnetics, Inc. v. Micro Linear Corp., 330 F.3d 1352 (Fed. Cir. 2003) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4: III[A][1] Pitney Bowes, Inc. v. Hewlett-Packard Co., 182 F.3d 1298 (Fed. Cir. 1999) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2: V[H][1] Plant Genetic Sys. v. DeKalb Genetics Corp., 315 F.3d 1335 (Fed. Cir. 2003) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6: V[A] Polin v. Conductron Corp., 552 F.2d 797 (8th Cir.) . . . . . . . . . . . . . . . . . . . . . . . .16: II[I] Poly-America, L.P. v. GSE Lining Tech., Inc., 383 F.3d 1303 (Fed. Cir. 2004) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2: V[H][1] Pommer v. Medtest Corp., 961 F.2d 620 (7th Cir. 1992) . . . . . . . 16: II[C], 16: III[A][7] Powell v. American Bank & Trust Co., 640 F. Supp. 1568 (N.D. Ind. 1986) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16: II[A][2] PowerOasis, Inc. v. T-Mobile USA, Inc., 522 F.3d 1299 (Fed. Cir. 2008) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6: III, 9: III[B], 9: III[D] PPG Indus. v. Guardian Indus. Corp., 156 F.3d 1351 (Fed. Cir. 1998) . . . . . . . . . . . . . . . . . . . . . . . . . . . 2: V[I][2], 3: IV[C][2], 3: IV[C][3] PPG Indus. v. Guardian Indus. Corp., 597 F.2d 1090 (6th Cir. 1979) . . . . . 22: V[A][1] Praxair, Inc. v. ATMI, Inc., 543 F.3d 1306 (Fed. Cir. 2008) . . . . . . . . . 10: II, 10: II[A], 10: II[D], 10: II[E], 10: II[G], 23: I[M] Precision Instrument Mfg. Co. v. Auto. Maint. Mach. Co., 324 U.S. 806, 65 S. Ct. 993, 89 L. Ed. 1381 (1945) . . . . . . . . . . . . . . . . . . . . . 10: II[F]

992

Case, Statute, and Rule Index Price v. Symsek, 988 F.2d 1187 (Fed. Cir. 1993) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7: VI Prima Tek II, LLC v. Polypap, SARL, 318 F.3d 1143 (Fed. Cir. 2003). . . . . . 2: V[D][2] Prods.,Inc. v. Just Toys, Inc., 122 F.3d 1396 (Fed. Cir. 1997) . . . . . . . . . . . . . . . . 8: V[A] Prof’l Real Estate Investors v. Columbia Pictures Indus., 508 U.S. 49 (1993) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14: II[C], 20: II[C] Proveris Sci. Corp. v. Innovasystems, Inc., 536 F.3d 1256 (Fed. Cir. 2008) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5: III[A], 5: III[B][2] PSC Computer Prods., Inc. v. Foxconn Int’l, 355 F.3d 1353 (Fed. Cir. 2004) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4: I[C], 4: III[C] Purdue Pharma L.P. v. Endo Pharms. Inc., 438 F.3d 1123 (Fed. Cir. 2006) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10: II[G]

Q Q-Pharma, Inc. v. Andrew Jergens Co., 360 F.3d 1295 (Fed. Cir. 2004) . . . . . . . . . . . . . . . . . . . . . . . . 14: II[A], 14: II[B], 20: II[A], 20: II[B] Quad Envtl. Techs. Corp. v. Union Sanitary Dist., 946 F.2d 870 (Fed. Cir. 1991) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15: II, 19: V[B], 21: I Qualcomm Inc. v. Broadcom Corp., 548 F.3d 1004 (Fed. Cir. 2008) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9: I, 10: I, 10: IV[F], 11: V[A][2], 19: II[D], 19: IV[B], 22: IV[D] Quantum Corp. v. Tandon Corp., 940 F.2d 642 (Fed. Cir. 1991) . . . . . . . . . . . . . . . . . . . . . .13: II[C], 13: VI[A], 13: VI[B], 24: IV[B]

R Randomex, Inc. v. Scopus Corp., 849 F.2d 585 (Fed. Cir. 1988) . . . . . . . . . . . . . 9: IV[B] RCI Tech. Corp. v. Sunterra Corp. (In re Sunterra Corp.), 361 F.3d 257 (4th Cir. 2004) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22: V[A][2][e] Read Corp. v. Portec, Inc., 970 F.2d 816 (Fed. Cir. 1992) . . . . . . . . 12: IV[E], 12: V[F], 12: VI[F], 13: II[A], 13: II[B], 16: III[A][1], 16: III[A][5], 18: III[D], 18: IV[G], 18: V[D], 23: I, 23: I[B], 23: I[E], 23: I[G], 23: II Reading & Bates Constr. Co. v. Baker Energy Resources Corp., 748 F.2d 645 (Fed. Cir. 1984) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8: V[C] Regents of the Univ. of Cal.. v. Eli Lilly & Co., 119 F.3d 1559 (Fed. Cir. 1997) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9: III[G] Regents of the Univ. of N.M. v. Knight, 321 F.3d 1111 (Fed. Cir. 2003) . . . . . . . . . . . . . . . . . . 17: VII[A], 18: VI[A], 19: II[A][1], 22: III[A] Renishaw PLC v. Marposs Societa’ per Azioni, 158 F.3d 1243 (Fed. Cir. 1998) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2: IV[C][2][b][2], 2: V[D][2] Rexnord Corp. v. Laitram Corp., 274 F.3d 1336 (Fed. Cir. 2001) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2: IV[C][3][a], 2: V[D] Rhine v. Casio, Inc., 183 F.3d 1342 (Fed. Cir. 1999) . . . . . . . . . . . . . . . . . . . . . . . . 2: V[I] Rhone-Poulenc Rorer v. Home Indem. Co., 32 F.3d 851 (3d Cir. 1994) . . . . . 24: VI[E] Richdel, Inc. v. Sunspool Corp., 714 F.2d 1573 (Fed. Cir.1983) . . . . . . . . . . . . 8: VIII[A] Ricoh Co., Ltd. v. Quanta Computer Inc., 550 F.3d 1325 (Fed. Cir. 2008) . . . . . . . . . . . . . . . . . . . . . . . . . . 5: I[B], 5: I[B][1], 5: I[C], 5: I[C][3] Riles v. Shell Exploration & Prod. Co., 298 F.3d 1302 (Fed. Cir. 2002). . . . . 3: IV[B][1] Roberts Dairy Co. v. United States, 530 F.2d 1342 (Ct. Cl. 1976) . . . . . . . . . . . . 5: II[D] Roche Prods., Inc. v. Bolar Pharms. Co., 733 F.2d 858 (Fed. Cir. 1984) . . . . . . 5: III[A]

Case, Statute, and Rule Index 993 Rock-Ola Manufacturing Corp. v. Filben Manufacturing Co., 168 F.2d 919 (8th Cir.) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22: V[A][1] Rohm & Haas Co. v. Crystal Chemical Co., 722 F.2d 1556 (Fed. Cir. 1983) . . . . . . . . . . . . . . . . . . 10: II[H], 12: VI[C], 13: II[A], 19: II[D], 19: IV[A], 19: IV[B], 22: IV[D], 23: I Rosemount, Inc. v. Beckman Instruments, Inc., 727 F.2d 1540 (Fed. Cir. 1984) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14: III[C] Rubinstein v. Collins, 20 F.3d 160 (5th Cir. 1994) . . . . . . . . . . . . . . . . . . . . . . . . .16: II[I] rules, 17 C.F.R. § 205.1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16: II[A][3] 17 C.F.R. § 205.2(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16: II[A][3] 17 C.F.R. § 205.2(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16: II[A][3][a] 17 C.F.R. § 205.2(g) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16: II[A][3] 17 C.F.R. § 205.2(h) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16: II[A][3] 17 C.F.R. § 205.3(b)(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16: II[A][3][a] 17 C.F.R. § 205.4(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16: II[A][3] 17 C.F.R. § 205.6(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16: II[A][3][a] 17 C.F.R. § 205.6(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16: II[A][3][a] 17 C.F.R. § 229.101(c)(iv) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .16: III, 16: V[E] 17 C.F.R. § 240.10b-5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16: II[A][2] 21 C.F.R. § 1.501 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15: II, 19: V[B], 21: I 21 C.F.R. § 314.52(c)(6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14: III[C] 21 C.F.R. § 314.53 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20: III[B] 21 C.F.R. § 314.53(c)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14: III[A], 20: III[A] 21 C.F.R. § 314.53(c)(2)(ii) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14: III[A], 20: III[A] 21 C.F.R. § 314.53(f) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20: III[A] 21 C.F.R. § 314.94(a)(12)(vi) . . . . . . . . . . . . . . . . . . . . . . . . . . . .14: III[A], 20: III[A] 21 C.F.R. § 314.95(c)(6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14: III[A], 20: III[A] 21 C.F.R. § 314.107(b)(1)(iv) . . . . . . . . . . . . . . . . . . . . . . . . . . . .14: III[A], 20: III[A] 37 C.F.R. § 1.56(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10: II[A], 10: II[B] 37 C.F.R. § 1.56(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10: II[B] 37 C.F.R. § 1.143 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21: II 37 C.F.R. § 1.144 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21: II 37 C.F.R. § 1.175 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19: V[A], 21: II 37 C.F.R. § 1.176 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21: II, 21: II[A] 37 C.F.R. § 1.501 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15: IV, 21: V 37 C.F.R. § 1.550(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15: II, 21: I 37 C.F.R. § 1.530(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15: II, 21: I 37 C.F.R. § 1.913 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15: III Fed. R. Civ. Pro. 26(b)(3) . . . . . . . . . . . . . . . . 24: III, 24: III[A], 24: V[B], 24: V[C] Fed. R. Civ. Pro. 11 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14: II, 14: II[A], 14: II[B], 20: II, 20: II[A], 20: II[B] M.P.E.P. § 302.07 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22: VI M.P.E.P. § 313 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22: VI M.P.E.P. § 2113 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3: V[B][2][a], 4: III[F][2][a] M.P.E.P. §§ 2201–06 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21: V M.P.E.P. § 2204 . . . . . . . . . . . . . . . . . . 15: II, 15: IV, 19: V[B], 21: I, 21: V, 21: V[A] M.P.E.P. § 2205 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15: IV[A], 21: V[A]

994 Case, Statute, and Rule Index M.P.E.P. § 2206 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15: IV, 21: V M.P.E.P. § 2207 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15: VI M.P.E.P. § 2217 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19: V[B], 21: I M.P.E.P. § 2173.05(H) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2: V[I][3][a] M.P.E.P. § 2111.03 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2: V[I][2] M.P.E.P. § 2113 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2: V[G][1], 2: V[G][2][a], 6: VII[B][2], 8: X[B][2] Rule 10b-5 of the Securities Exchange Act of 1934, as amended . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .16: II, 16: II[A][2] Russell Box Co. v. Grant Paper Box Co., 203 F.2d 177 (1st Cir.) . . . . . . . . . . . . 13: II[B]

S S. Bravo Sys., Inc. v. Containment Techs. Corp., 96 F.3d 1372 (Fed. Cir. 1996) . . . . . . . . . . . . . . . . . . . . . . . . 14: II[A], 14: II[B], 20: II[A], 20: II[B] Safeco Ins. Co. of Am. v. Burr, 551 U.S. 47 (2007) . . . . . . . . . . . . . . . . . . . . . . . . . . 13: IV Sage Prods., Inc. v. Devon Indus., Inc., 126 F.3d 1420 (Fed. Cir. 1997) . . . . . . . . 21: III Sakraida v. AG Pro, Inc., 425 U.S. 273 (1976) . . . . . . . . . . . . . . . . . . . . . . . . . . . 8: VI[B] SanDisk Corp. v. Memorex Prods., Inc., 415 F.3d 1278 (Fed. Cir. 2005) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2: V[C] SanDisk Corp. v. STMicroelectronics, Inc., 480 F.3d 1372 (Fed. Cir. 2007) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19: VI Sandt Tech., Ltd. v. Resco Metal & Plastics Corp., 264 F.3d 1344 (Fed. Cir. 2001) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6: I, 7: I, 8: I, 9: I Scanner Techs. Corp. v. ICOS Vision Sys. Corp., 528 F.3d 1365 (Fed. Cir. 2008) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10: II[E] Schering Corp. v. Geneva Pharm., Inc., 339 F.3d 1373 (Fed. Cir. 2003) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6: I, 6: V[B], 6: VI, 6: VI[A], 7: I, 11: III[C][3], 12: V[B], 17: VI[A], 18: IV[B] Schwarz Pharma, Inc. v. Paddock Labs., Inc., 504 F.3d 1371 (Fed. Cir. 2007) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4: III[A][1] Schwing GmbH v. Putzmeister Aktiengesellschaft, 305 F.3d 1318 (Fed. Cir. 2002) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4: III[B] SciMed Life Sys., Inc. v. Advanced Cardiovascular Sys., Inc., 242 F.3d 1337 (Fed. Cir. 2001) . . . . . . . . . . . . . . . . . . 2: IV[C][3][a], 2: IV[C][3][b], 2: V[B], 4: III[B] SCM Corp. v. Xerox Corp., 70 F.R.D. 508 (D. Conn. 1976) . . . . . . . . . . . . . . . 24: VI[E] Scott v. Finney, 34 F.3d 1058 (Fed. Cir. 1994) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7: II[B] Scripps Clinic and Research Foundation v. Genentech, 927 F.2d 1565 (Fed. Cir. 1991) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2: V[G][2][a], 3: V[B][2][a], 4: III[F][2][a], 10: II[H], 19: V[A], 21: II Seattle Box Co. v. Indus. Crating & Packing, Inc., 731 F.2d 818 (Fed. Cir. 1984) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9: V[E][1], 21: IV SEC v. Merrill Scott & Assocs., Ltd., 505 F. Supp. 2d 1193 (D. Utah 2007) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16: II[A][2] SEC v. Research Automation Corp., 585 F.2d 31 (2d Cir. 1978) . . . . . . . . . . . . 16: II[D] SEC v. Southwest Coal & Energy Co., 439 F. Supp. 820 (W.D. La. 1977) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16: II[A][2] Semerenko v. Cendant Corp., 223 F.3d 165 (3d Cir. 2000) . . . . . . . . . . . . . . . . . .16: II[I]

Case, Statute, and Rule Index 995 Sensonics, Inc. v. Aerosonic Corp., 81 F.3d 1566 (Fed. Cir. 1996) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16: III[A][8], 23: I, 23: I[J] Senza-Gel Corp. v. Seiffhart, 803 F.2d 661 (Fed. Cir. 1986) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10: IV[F], 19: IV[B] Seymour v. McCormick, 57 U.S. 480, 14 L. Ed. 1024 (1853) . . . . . . . . . . . . . . . . 13: II[A] Shaw v. Digital Equip. Corp., 82 F.3d 1194 (1st Cir. 1996). . . . . . . . . . . . . . . . . .16: II[I] Shelcore, Inc. v. Durham Industries, Inc., 745 F.2d 621 (Fed. Cir. 1984) . . . . . . . . 15: II Shiley, Inc. v. Bentley Lab., Inc., 601 F. Supp. 964 (C.D. Cal. 1985) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16: III[A][6], 23: I[I] Shum v. Intel Corp., 499 F.3d 1272 (Fed. Cir. 2007) . . . . . . . . . . . . 18: VI[H], 19: V[C] Singh v. Brake, 317 F.3d 1334 (Fed. Cir. 2002) . . . . . . . . . . . . . . . . . . . . . . . . . . 9: III[G] Sinorgchem Co. v. ITC, 511 F.3d 1132 (Fed. Cir. 2007) . . . . . . . . . . . . . . 2: IV[C][3][a] Sitrick v. Dreamworks, LLC, 516 F.3d 993 (Fed. Cir. 2008) . . . . . . . . . . . . . . . . . 9: II[A] Sjolund v. Musland, 847 F.2d 1573 (Fed. Cir. 1988) . . . . . . . . . . . . . . . . . . . . . . .8: VI[E] Slimfold Mfg. Co., Inc. v. Kinkead Indus., Inc., 932 F.2d 1453 (Fed. Cir. 1991) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4: II[B] Slip Track Sys., Inc. v. Metal-Lite, Inc., 304 F.3d 1256 (Fed. Cir. 2002) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7: VII[B] SmithKline Beecham Corp. v. Apotex Corp., 453 F.3d 1346 (Fed. Cir. 2006) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3: V[B], 3: V[B][1], 3: V[B][2][a], 4: III[F][1], 4: III[F][2][a], 6: VII[B][1], 8: X[B][1] SmithKline Beecham Corp. v. Apotex Corp., 453 F.3d 1346 (Newman, dissenting) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3: V[B][2][a] SmithKline Beecham Corp. v. Apotex Corp., 453 F.3d 1346 (Rader, dissenting) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3: V[B][2][a] SmithKline Beecham Corp. v. Apotex Corp., 439 F.3d 1312 (Fed. Cir. 2006) . . . . . . . . . . . . . . . . . . . . . . . . . . . 2: V[G], 2: V[G][1], 2: V[G][2][a], 3: V[B], 3: V[B][1], 3: V[B][2][a], 4: III[F], 4: III[F][2][a], 6: I, 6: VII[B][1], 7: I, 8: X[B][1], 8: X[B][2] SmithKline Diagnostics, Inc. v. Helena Labs. Corp., 859 F.2d 878 (Fed. Cir. 1988) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14: IV[A], 20: IV[A] Smiths Indus. Med. Sys., Inc. v. Vital Signs, Inc., 183 F.3d 1347 (Fed. Cir. 1999) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14: IV[A], 20: IV[A] Snow v. Lake Shore & Mich. S. Ry. Co., 121 U.S. 617, 30 L. Ed. 1004, 7 S. Ct. 1343, 1887 Dec. Comm’r. Pat. 354 (1887) . . . . . . . . . . . . . . . . . . . . . . 2: V[B] Sony Elecs., Inc. v. Guardian Media Techs., Ltd., 497 F.3d 1271 (Fed. Cir. 2007) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19: VI Southwall Techs., Inc. v. Cardinal IG Co., 54 F.3d 1570 (Fed. Cir. 1995) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2: IV[C][2][b][3], 2: V[C][4] Southwest Software, Inc. v. Harlequin Inc., 226 F.3d 1280 (Fed. Cir. 2000). . . . . 21: IV Specialty Composites v. Cabot Corp., 845 F.2d 981 (Fed. Cir. 1988) . . . . . 8: VIII[C][4] Spectra-Physics, Inc. v. Coherent, Inc., 827 F.2d 1524 (Fed. Cir. 1987) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2: V[B], 9: III[A], 9: IV[B] Spindelfabrik Suessen-Schurr Stahlecker & Grill GmbH v. Schubert & Salzer Maschinenfabrik Aktiengesellschaft, 829 F.2d 1075 (Fed. Cir. 1987) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16: III[A][4], 23: I[F] Springs Window Fashions LP v. Novo Indus., L.P., 323 F.3d 989 (Fed. Cir. 2003) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14: II[C], 20: II[C]

996 Case, Statute, and Rule Index SRAM Corp. v. AD-II Eng’g, Inc., 465 F.3d 1351 (Fed. Cir. 2006) . . . . . . . . . . . 7: VII[B] SRI Int’l, Inc. v. Internet Sec. Sys., 511 F.3d 1186 (Fed. Cir. 2008) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6: IV, 6: V[A], 6: V[B], 6: V[D] SRI Int’l v. Advanced Tech. Lab., 127 F.3d 1462 (Fed. Cir. 1997) . . . . . . . . . . . 13: II[C] Sri Int’l v. Matsushita Elec. Corp., 775 F.2d 1107 (Fed. Cir. 1985) (en banc) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2: V[A], 2: V[B], 3: IV[A][1], 4: I[B] St. Regis Paper Co. v. Winchester Carton Corp., 410 F. Supp. 1304 (D. Mass. 1976) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13: II[B] Star Sci., Inc. v. R.J. Reynolds Tobacco Co., 537 F.3d 1357 (Fed. Cir. 2008) . . . . . . . . . . . . . . . . . . 10: II, 10: II[C], 10: II[D], 10: II[G], 23: I[M] State Oil Co. v. Khan, 139 L. Ed. 2d 199, 118 S. Ct. 275 (1997) . . . . . . . . . . . . 10: IV[E] statutes, 5 U.S.C. §§ 702–706 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14: III[C] 11 U.S.C. § 101(35A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22: III 11 U.S.C. § 544 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22: VI 11 U.S.C. § 365 . . . . . . . 22: V, 22: V[A], 22: V[A][1], 22: V[A][2], 22: V[A][2][a], 22: V[A][2][b], 22: V[A][2][c], 22: V[A][2][d], 22: V[B], 22: V[B][1], 22: V[B][2], 22: V[B][3], 22: V[B][4], 22: V[B][5] 11 U.S.C. § 365(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22: V[A][2] 11 U.S.C. § 365(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22: V[A][2], 22: V[A][2][c] 11 U.S.C. § 365(c)(1)(A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22: V[A][2][a] 11 U.S.C. §§ 365(c)(1)(A)–(B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22: V[A][2] 11 U.S.C. § 365(c)(1)(B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22: V[A][2][a] 11 U.S.C. § 365(g)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22: V 11 U.S.C. § 365(n) . . . . . . . . . . . . . . . . . . . . . . . . 22: V[B], 22: V[B][1], 22: V[B][2], 22: V[B][3], 22: V[B][4], 22: V[B][5] 11 U.S.C. § 365(n)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22: V[B][3], 22: V[B][4] 11 U.S.C. § 365(n)(1)(B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .22: V[B][4] 11 U.S.C. § 365(n)(2) . . . . . . . . . . . . . . . . . . . . 22: V[B][3], 22: V[B][4], 22: V[B][5] 11 U.S.C. § 365(n)(2)(A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .22: V[B][4] 11 U.S.C. § 365(n)(2)(B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .22: V[B][5] 11 U.S.C. § 365(n)(2)(C) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .22: V[B][5] 11 U.S.C. § 365(n)(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .22: V[B][3] 11 U.S.C. § 365(n)(3)(A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .22: V[B][4] 11 U.S.C. § 365(n)(3)(B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .22: V[B][4] 11 U.S.C. § 365(n)(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .22: V[B][3] 11 U.S.C. § 1101(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22: V[A][2] 11 U.S.C. § 1107(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22: V[A][2], 22: V[A][2][c] 15 U.S.C. §§ 77a–77aa . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16: II 15 U.S.C. § 77f(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16: II[A][1] 15 U.S.C. § 77k(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16: II[A][1] 15 U.S.C. § 77k(b)(3)(A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16: II[H] 15 U.S.C. § 77k(b)(3)(B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16: II[H] 15 U.S.C. § 77k(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16: II[H] 15 U.S.C. §§ 78a–78mm . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16: II 15 U.S.C. § 78j(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16: II[A][2] 15 U.S.C. § 78u . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .16: II[I] 15 U.S.C. § 78u-4(b)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16: II[A][2]

Case, Statute, and Rule Index 997 15 U.S.C. § 78u-5(c)(1)(A)(i) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .16: II[I] 19 U.S.C. § 1337 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14: V[B], 20: V[B] 19 U.S.C. § 1337(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5: I[E][1] 21 U.S.C § 337(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14: III[C] 21 U.S.C. § 348 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5: III[A] 21 U.S.C. § 355 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5: III[A], 14: III[A], 20: III[A] 21 U.S.C. § 355(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14: III[A], 20: III[A] 21 U.S.C. § 355(b)(1) . . . . . . . . . . . . . . . .14: III[A], 14: III[C], 20: III[A], 20: III[C] 21 U.S.C. § 355(c)(3)(D)(ii) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8: VIII[C][1] 21 U.S.C. § 355(j) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14: III[A], 20: III[A] 21 U.S.C. § 355(j)(7)(A)(iii) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20: III[A] 21 U.S.C. § 355(j)(2)(A)(vii) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14: III[A], 20: III[A] 21 U.S.C. § 355(j)(2)(A)(viii) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14: III[A] 21 U.S.C. § 355(j)(2)(A)(vii)(I–IV) . . . . . . . . . . . . . . . . . . . . . . .14: III[A], 20: III[A] 21 U.S.C. § 355(j)(2)(B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14: III[C] 21 U.S.C. § 355(j)(2)(B)(i). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14: III[A], 14: III[B] 21 U.S.C. § 355(j)(2)(B)(ii) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14: III[B] 21 U.S.C. § 355(j)(5)(B)(ii) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14: III[A] 21 U.S.C. § 355(j)(2)(B)(iii) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14: III[B] 21 U.S.C. § 355(j)(5)(B)(iii) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14: III[C], 20: III[C] 21 U.S.C. § 355(j)(5)(B)(iii) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14: III[A], 20: III[A] 21 U.S.C. § 355(j)(5)(B)(i). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14: III[A], 20: III[A] 21 U.S.C. § 360 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14: III[A], 20: III[A] 21 U.S.C. § 360(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5: III[A] 21 U.S.C. § 376 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5: III[A] 35 U.S.C. §§ 1–307, . . . . . . . . . . . . . . . . . . . . . . . . . . . . AppA: II, AppB: II, AppC: II 35 U.S.C. § 101 . . . . . . . . .9: I, 9: VI, 9: VI[A], 17: VI[D][1], 17: VI[E], 18: I[A][2] 35 U.S.C. § 102 . . . . . . . . 4: III[D], 6: I, 6: I[A], 6: II, 6: III, 6: IV, 6: V[A], 6: V[D], 6: VI[B], 6: VI[C], 7: I, 7: II, 7: II[A][1], 7: III, 7: IV, 7: V, 7: VII[A], 7: VII[B], 7: VIII, 7: VIII[G], 8: I, 8: II[B], 8: V[A], 8: V[C], 8: IX, 8: XI[D], 9: I, 11: III[C][3], 12: V[B], 15: II, 15: II[A], 15: III[A], 15: VII[D], 17: VI, 17: VI[B], 18: I[A][2], 18: IV[B], 19: V[B], 20: IV[A] 35 U.S.C. § 102(a) . . . . . . . . . . . . . . . . .7: IV, 7: VIII, 8: XI[D], 21: I, 21: I[A], 21: V, 21: VII[H], AppA: III, AppA: VII, AppA: IX[B], AppC: III, AppC: VIII[B] 35 U.S.C. § 102(b). . . . . 6: I, 6: II, 6: III, 6: IV, 6: V[A], 6: V[B], 6: V[D], 7: I, 7: II, 7: II[A][1], 7: III, 7: VI, 7: VII[A], 7: VIII, 8: V[A], 8: V[C], 8: IX, 8: XI[D], 11: III[C][3], 12: V[B], 15: II, 15: II[A], 15: III[A], 15: VII[D], 17: VI, 17: VI[B], 18: I[A][2], 18: IV[B], 19: V[B], 21: I, 21: I[A], 21: V, 21: VII[H], AppA: III, AppA: VII, AppA: IX[B], AppC: III, AppC: VIII[B] 35 U.S.C. § 102(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7: IV 35 U.S.C. § 102(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7: V, 7: VIII 35 U.S.C. § 102(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7: VIII, 8: V[A], 8: XI[D] 35 U.S.C. § 102(f) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7: VI, 8: V[A], 8: IX 35 U.S.C. § 102(g) . . . . . . . . . . . . . . . . . . . . .7: IV, 7: VIII, 8: II[B], 8: V[A], 8: XI[D] 35 U.S.C. § 102(g)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7: VII[B]

998

Case, Statute, and Rule Index 35 U.S.C. § 103 . . . . . . . . . . . . . . 6: I, 6: I[A], 6: VI[C], 8: I, 8: II[B], 8: III, 8: V[A], 8: V[C], 8: VI[A][1], 8: VI[C][2], 8: VII[B], 8: IX, 8: XI[E], 9: I, 16: III[A][9], AppA: III, AppA: IX[B], AppC: III, AppC: VIII[B] 35 U.S.C. § 112 . . . . . . . . . . . . .2: IV[C][2][b][1], 2: V[G][2][d], 2: V[H], 3: IV[D], 3: V[A], 3: V[A][2], 3: V[A][2][b], 3: V[B][2][d], 4: I[A][1], 4: III[A][1], 4: III[E][1], 4: III[E][3][a], 4: III[E][3][b], 4: III[F][2][d], 6: V[A], 6: V[B], 6: V[D], 6: VII[A], 6: VII[A][2], 6: VII[A][3], 6: VIII[H], 6: VIII[T], 8: X[A], 9: I, 9: II, 9: II[G], 9: III, 9: III[A], 9: III[F], 9: III[G], 9: IV, 9: IV[B], 9: V, 9: V[A], 9: V[F][2], 9: VI[C], 11: III[C][3], 11: IV[A], 12: V[B], 17: V[C], 17: VI, 17: VI[D], 17: IX[F], 17: IX[G], 18: IV[B], 18: VI[H], 19: V[C], 21: IV 35 U.S.C. § 112, P 1 . . . . . . . . . . . . . . . . . . . . . . .6: V[A], 6: V[B], 6: V[D], 9: I, 9: II, 9: III, 9: III[A], 9: III[F], 9: III[G], 9: IV, 9: IV[B], 9: VI[C], 11: III[C][3], 11: IV[A], 12: V[B], 17: VI, 17: VI[D], 17: IX[F], 18: IV[B], 21: IV 35 U.S.C. § 112, P 2 . . . . . . . . . . . . . . . . . 2: IV[C][2][b][1], 2: V[G][2][d], 2: V[H], 3: V[B][2][d], 4: III[F][2][d], 9: IV[B], 9: V, 9: V[A], 9: V[F][2], 17: V[C], 17: VI[D], 17: IX[F], 21: IV 35 U.S.C. § 116, P 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18: VI[H], 19: V[C] 35 U.S.C. § 112, P 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3: IV[D] 35 U.S.C. § 112, P 6 . . . . . . . . . . . . 2: V[F], 2: V[F][1], 2: V[F][2], 2: V[F][2][b][1], 3: V[A], 3: V[A][2], 3: V[A][2][b], 4: III[E][1], 4: III[E][3][a], 4: III[E][3][b], 6: VII[A], 6: VII[A][2], 6: VII[A][3], 6: VIII[T], 8: X[A], 8: X[A][2], 8: X[A][2][a], 8: XI[P], 9: V[F][1] 35 U.S.C. § 116 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11: V[A][2] 35 U.S.C. § 129 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7: IV 35 U.S.C. § 154(a)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18: I[B][3][a], 18: I[B][3][b] 35 U.S.C. § 154(b). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .18: I[B][3][b] 35 U.S.C. § 154(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11: V[A][3] 35 U.S.C. § 155 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .18: I[B][3][b] 35 U.S.C. § 156 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5: III[A], 5: III[B][2], 14: III[A], 18: I[B][3][b], 20: III[A] 35 U.S.C. § 156(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5: III[A], 5: III[B][2] 35 U.S.C. § 156(f) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .5: III[A], 5: III[B][2] 35 U.S.C. § 251 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .19: V[A], 21: II, 21: IV 35 U.S.C. § 251, P 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21: I, 21: II 35 U.S.C. § 251, P 3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15: II, 21: I, 21: II 35 U.S.C. § 251, P 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21: II 35 U.S.C. § 252 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21: IV 35 U.S.C. § 253 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21: III, 21: VII[E] 35 U.S.C. § 254 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21: IV 35 U.S.C. § 255 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21: IV 35 U.S.C. § 256 . . . . . . . . . . . . . . . . . . . 11: IV[A], 11: V[A][2], 18: VI[H], 19: V[C] 35 U.S.C. § 261 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11: IV[A], 17: VII[A], 18: VI[A], 19: II[A][1], 22: III, 22: III[A], 22: VI

Case, Statute, and Rule Index 999 35 U.S.C. § 262 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11: IV[A], 17: VII[A], 18: VI[B], 18: VI[C], 19: II[A][1], 22: III 35 U.S.C. § 271 . . . . . . . . . . . 3: I, 3: II, 3: II[A], 3: VI[E], 5: I[A], 5: I[B], 5: I[B][7], 5: I[C], 5: I[C][3], 5: I[D], 5: I[D][1], 5: I[D][3], 5: I[E][1], 5: I[E][2], 5: II[B], 5: II[C], 5: III, 5: III[A], 5: III[B][2], 10: IV[D], 10: V[M], 13: I, 13: VI, 13: VI[A], 14: III[A], 14: III[C], 20: III[A], 20: III[D] 35 U.S.C. § 271(a) . . . . . . . . . . . . . . . 3: II, 5: I[A], 5: I[D][1], 5: II[B], 5: II[C], 13: I 35 U.S.C. § 271(b). . . . . . . . . . . . 3: II[A], 5: I[B], 5: I[B][7], 13: I, 13: VI, 13: VI[A] 35 U.S.C. § 271(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3: II[A], 5: I[C], 5: I[C][3] 35 U.S.C. § 271(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10: IV[D], 10: V[M] 35 U.S.C. § 271(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3: II[A] 35 U.S.C. § 271(e)(1) . . . . . . . . . . 5: III, 5: III[A], 5: III[B][2], 14: III[A], 20: III[A] 35 U.S.C. § 271(e)(2) . . . . . . . . . . . . . . . . . . . . . . . . . 14: III[A], 14: III[C], 20: III[A] 35 U.S.C. § 271(e)(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14: III[C], 20: III[D] 35 U.S.C. § 271(f) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3: II[A], 5: I[D], 5: I[D][3] 35 U.S.C. §271(g) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3: II[A], 5: I[E][1], 5: I[E][2] 35 U.S.C. § 282 . . . . . . . . . 6: I, 6: V[C], 7: I, 7: VII[B], 8: I, 9: I, 9: V[B], 14: III[A], 14: IV[A], 15: II, 21: I, 20: III[A], 20: IV[A] 35 U.S.C. § 283 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14: IV[A], 20: IV[A] 35 U.S.C. § 284 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13: II[A], 13: IV, 24: IV, 24: V 35 U.S.C. § 285 . . . . . . . . . . . . . . . . . . . . 14: II, 14: II[C], 14: III[C], 20: II, 20: II[C], 20: III[D], 21: II[A] 35 U.S.C. § 288 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21: III, 21: VII[E], 21: VII[F] 35 U.S.C. § 290 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15: VI, 21: V[A] 35 U.S.C. § 301 . . . . . . . . . . . . . . . . . . . . 15: II, 15: IV, 15: IV[A], 15: VII[D], 21: V, 21: V[A], 21: VII[H] 35 U.S.C. § 302 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15: II, 19: V[B], 21: I 35 U.S.C. § 303 . . . . . . . . . . . . . . . . . . . . . . .15: II, 15: II[A], 19: V[B], 21: I, 21: I[A] 35 U.S.C. § 304 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15: II, 21: I, 21: II 35 U.S.C. § 305 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15: II, 21: I, 21: II 35 U.S.C. § 311 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .15: III, 15: III[A] 35 U.S.C. § 312 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .15: III, 15: III[A] 35 U.S.C. § 313 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15: III 35 U.S.C. § 314 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15: III 35 U.S.C. § 315 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15: III 35 U.S.C. § 315(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15: III 35 U.S.C. § 316 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15: III 35 U.S.C. § 317 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15: III 35 U.S.C. § 318 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15: III 35 U.S.C. § 355(b)(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20: III[B] 35 U.S.C. § 355(c)(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20: III[B] Section 10(b) of the Securities Exchange Act of 1934, as amended (15 U.S.C. § 78j(b)) . . . . . . . . . . . . . . . . . . . . . . . . .16: II, 16: II[A][2] Section 11(a) of the Securities Exchange Act of 1934, as amended (15 U.S.C. § 77f(a)) . . . . . . . . . . . . . . . . . . . . . . . . .16: II, 16: II[A][1] U.C.C. § 9-301(1)(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22: VI

1000 Case, Statute, and Rule Index U.C.C. § 9-302(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22: VI U.C.C. § 9-104. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22: VI U.C.C. § 9-104(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22: VI U.S. Const., Art. I, § 8, cl. 8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4: I[A][1] Std. Oil Co. v. Am. Cyanamid Co., 774 F.2d 448 (Fed. Cir. 1985) . . . . . . . . . . . 21: II[A] Stenograph Corp. v. Fulkerson, 972 F.2d 726 (7th Cir. 1992) . . . . . . . . . . . . 22: V[A][1] Sterner Lighting, Inc. v. Allied Elec. Supply, Inc., 431 F.2d 539 (5th Cir. 1970) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14: IV[A], 20: IV[A] Stern v. Trustees of Columbia Univ., 434 F.3d 1375 (Fed. Cir. 2006) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18: VI[H], 19: V[C] Stevenson v. Sears, Roebuck & Co., 713 F.2d 705 (Fed.Cir. 1983) . . . . . . . . . 15: II, 21: I Stratoflex v. Aeroquip Corp., 713 F.2d 1530 (Fed. Cir. 1983) . . . . . . .16: III[A][9], 23: I Streamfeeder, LLC v. Sure-Feed Sys., Inc., 175 F.3d 974 (Fed. Cir. 1999) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4: III[D] Summit Inv. & Dev. Corp. v. Leroux, 69 F.3d 608 (1st Cir. 1995) . . . . . . 22: V[A][2][e] Sunrace Roots Enter. Co. v. SRAM Corp., 336 F.3d 1298 (Fed. Cir. 2003) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2: V[E] Superior Fireplace Co. v. Majestic Prods. Co., 270 F.3d 1358 (Fed. Cir. 2001) . . . . . . . . . . . . . . . . . . . . . . . . . 14: II[C], 20: II[C], 21: IV, 21: VII[J] Symantec Corp. v. Computer Assocs. Int’l, Inc., 522 F.3d 1279 (Fed. Cir. 2008) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10: II[C] Symbol Tech., Inc. v. Opticon, Inc., 935 F.2d 1569 (Fed. Cir. 1991) . . . . . . . . . . 8: V[C] Szombathy v. Controlled Shredders, 1997 U.S. Dist. LEXIS 5168 (N.D. Ill. Apr. 10, 1997) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .22: V[B][4]

T Takeda Chem. Indus. v. Alphapharm Pty., Ltd., 492 F.3d 1350 (Fed. Cir. 2007) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8: IV Takeda Chem. Indus. v. Mylan Labs., 549 F.3d 1381 (Fed. Cir. 2008) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14: III[C], 20: III[D] Taskett v. Dentlinger, 344 F.3d 1337 (Fed. Cir. 2003) . . . . . . . . . . . . . . . . . . . . . 7: VII[B] Tate Access Floors, Inc. v. Interface Architectural Resources, Inc., 279 F.3d 1357 (Fed. Cir. 2002) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3: V[C] Tegal Corp. v. Tokyo Electron Co., 248 F.3d 1376 (Fed. Cir. 2001) . . . . . . . . . 5: I[B][2] Telectronics Pacing Systems v. Ventritex, Inc., 982 F.2d 1520 (Fed. Cir. 1992) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5: III[A] Teleflex, Inc. v. Ficosa N. Am. Corp., 299 F.3d 1313 (Fed. Cir. 2002) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2: V[B], 9: IV, 9: IV[A], 9: IV[D] Teleflex, Inc. v. KSR Int’l Co., 119 Fed. Appx. 282 (Fed. Cir. 2005) . . . . . . . 8: VI[C][1] Tenneco Packaging Specialty & Consumer Prods., Inc. v. S.C. Johnson & Son, Inc., 1999 U.S. Dist. LEXIS 15433 (N.D. Ill. 1999) . . . . . . . . . . . . . . 19: VII[D], 19: VII[F][3], 24: VI[D], 24: VI[F][4] Teva Pharm. USA, Inc. v. Novartis Pharm. Corp., 482 F.3d 1330 (Fed. Cir. 2007) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19: VI Thompson v. Glenmede Trust Co., 1995 U.S. Dist. LEXIS 18780, 1995 WL 752443 (E.D. Pa. 1995) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24: VI[E] Thorn EMI N. America v. Micron Tech., 837 F. Supp. 616 (D. Del. 1993) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24: V[B]

Case, Statute, and Rule Index 1001 Tilghman v. Proctor, 102 U.S. 707, 26 L. Ed. 279, 1881 Dec. Comm’r Pat. 163 (1880) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6: VI[A] TP Labs. Inc. v. Professional Positioners, Inc., 724 F.2d 965 (Fed.Cir. 1984) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7: II[B] Trammel v. United States, 445 U.S. 40, 100 S. Ct. 906, 63 L. Ed. 2d 186 (1980) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24: IV[B] Transco Prods. Inc. v. Performance Contracting, Inc., 38 F.3d 551 (Fed. Cir. 1994) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9: IV[A] TriMed, Inc. v. Stryker Corp., 514 F.3d 1256 (Fed. Cir. 2008) . . . . . . . . . . . . . 2: V[F][1] Tronzo v. Biomet, Inc., 156 F.3d 1154 (Fed. Cir. 1998) . . . . . . . . . . . . . . . . . . . . .9: III[E] Truswal Sys. Corp. v. Hydro-Air Eng’g, Inc., 813 F.2d 1207 (Fed. Cir. 1987) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19: VII[B], 24: VI[B] TSC Indus. v. Northway, 426 U.S. 438 (U.S. 1976) . . . . . . . . . . . . . . . . . . . . 16: II[A][2] Tuchman v. DSC Communications Corp., 14 F.3d 1061 (5th Cir. 1994) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16: II[A][2] TurboCare Div. of Demag Delaval Turbomachinery Corp. v. GE, 264 F.3d 1111 (Fed. Cir. 2001) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9: III[E]

U Ulead Sys., Inc. v. Computer & Mgmt. Corp., 351 F.3d 1139 (Fed. Cir. 2003) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10: II[C], 10: II[F] Ultra-Tex Surfaces, Inc. v. Hill Bros. Chem. Co., 204 F.3d 1360 (Fed. Cir. 2000) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4: III[D] Unarco Indus., Inc. v. Kelley Co., 465 F.2d 1303 (7th Cir. 1972) . . . . . . . . . 22: V[A][1] Underwater Devices, Inc. v. Morrison-Knudsen Co., 717 F.2d 1380 (Fed. Cir. 1983) . . . . . . . . . . . . . .13: I, 13: II[A], 13: III, 16: III[A][4], 16: III[A][7], 23: I, 23: I[C], 23: I[E], 23: I[F], 23: I[I], 23: I[J] Union Carbide Chems. & Plastics Tech. Corp. v. Shell Oil Co., 425 F.3d 1366 (Fed. Cir. 2005) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5: I[D][2] Union Carbide v. Dow Chemical, 619 F. Supp. 1036 (D. Del. 1985) . . . . . . . . 24: VI[E] Union Pac. Res. Co. v. Chesapeake Energy Corp., 236 F.3d 684 (Fed. Cir. 2001) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10: II[G] United Carbon Co. v. Binney & Smith Co., 317 U.S. 228, 63 S. Ct. 165, 87 L. Ed. 232 (1942) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9: V[A] United States Gypsum Co. v. Nat’l Gypsum Co., 74 F.3d 1209 (Fed. Cir. 1996) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9: IV[A] United States v. Adlman, 68 F.3d 1495 (2d Cir. 1995) . . . . . . . . . . . . . . . . . . . . 24: V[B] United States v. Adlman, 134 F.3d 1194 (2nd Cir. 1998) . . . . . . . . . . . . . . . . . 24: III[A] United States v. Nobles, 422 U.S. 225 (1975) . . . . . . . . . . . . . . . . . . . . . . . . . . . 24: III[A] United States v. One Tract of Real Property, 95 F.3d 422 (6th Cir. 1996). . . . . . . 24: III United States v. Techdyn Sys. Corp. (In re Techdyn Sys. Corp.), 235 B.R. 857 (Bankr. E.D. Va. 1999) . . . . . . . . . . . . . . . . . . . . . . . . . . . 22: V[A][2][e] United States v AT&T, 206 App. D.C. 317, 642 F.2d 1285 (D.C. Cir 1980) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24: VI[C] Unitherm Food Sys., Inc. v. Swift-Eckrich, Inc., 375 F.3d 1341 (Fed. Cir. 2004) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2: IV[C][2][b] Univ. of Rochester v. G.D. Searle & Co., 358 F.3d 916 (Fed. Cir. 2004) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9: III, 9: III[A], 9: III[C], 9: III[G]

1002 Case, Statute, and Rule Index Upjohn Co. v. United States, 449 U.S. 383, 101 S. Ct. 677, 66 L. Ed. 2d 584 (1981) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24: IV[B] Upjohn Co. v. United States, 449 U.S. 383 (1981) . . . . . . . . . . . . . . . . . . . . 24: II, 24: III Utah Med. Prods., Inc. v. Graphic Controls Corp., 350 F.3d 1376 (Fed. Cir. 2003) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3: V[A][2][a]

V Va. Panel Corp. v. MAC Panel Co., 133 F.3d 860 (Fed. Cir. 1997) . . . . . . . . . 10: IV[A] Valmet Paper Mach., Inc. v. Beloit Corp., 105 F.3d 1409 (Fed. Cir.1997) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8: II[C] Valmont Indus., Inc. v. Reinke Mfg. Co., Inc., 983 F.3d 1039 (Fed. Cir. 1993) . . . . . . . . . . . . . . . . . . . . .2: V[F][1], 2: V[F][2][b][1], 3: V[A][2][b] Vandenberg v. Dairy Equip. Co., 740 F.2d 1560 (Fed. Cir. 1984) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8: VIII[C][4] Vas-Cath Inc. v. Mahurkar, 935 F.2d 1555 (Fed. Cir. 1991) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9: II, 9: III[A], 9: III[B] Vectra Fitness, Inc. v. TNWK Corp., 162 F.3d 1379 (Fed. Cir. 1998) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21: II, 21: III, 21: IV Vehicular Techs. Corp. v. Titan Wheel Int’l, Inc., 212 F.3d 1377 (Fed. Cir. 2000) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2: V[I][3], 3: IV[C][3], 4: II[B] Verdegaal Bros., Inc. v. Union Oil Co. of Cal., 814 F.2d 628 (Fed. Cir. 1987) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6: VI[A] Verizon Servs. Corp. v. Vonage Holdings Corp., 503 F.3d 1295 (Fed. Cir. 2007) . . . . . . . . . . . . . . . . . . . . . . . 2: IV[B][2][b], 2: IV[C][3][b], 2: V[C], 11: III[A][2], 12: III[B], 18: II[B], 23: I[C] V-Formation, Inc. v. Benetton Group SpA, 401 F.3d 1307 (Fed. Cir. 2005) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2: IV[C][2][b] View Eng’g, Inc. v. Robotic Vision Sys., Inc., 208 F.3d 981 (Fed. Cir. 2000) . . . . . . . . . . . . . . . . . . . . . . . . 14: II[A], 14: II[B], 20: II[A], 20: II[B] Virginia Panel Corp. v. MAC Panel Co., 133 F.3d 860 (Fed. Cir. 1997) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10: IV[A], 10: IV[C], 10: IV[E] Vitronics Corp. v. Conceptronic, Inc., 90 F.3d 1576 (Fed. Cir. 1996) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2: IV[A], 2: IV[B][1], 2: IV[C][2], 2: IV[C][2][a], 2: IV[C][2][b][1], 2: IV[C][2][b][3], 2: IV[C][4], 2: V[C], 6: II, 9: V[E][2], 11: III[A], 11: III[A][1], 11: III[A][2], 12: III, 12: III[A], 12: III[B], 17: III, 18: II, 18: II[A], 18: II[B], 21: III Voda v. Cordis Corp., 536 F.3d 1311 (Fed. Cir. 2008) . . . . . . . . . . . . . . . . 8: I, 17: VI[C]

W Wahl Instruments, Inc. v. Acvious, Inc., 950 F.2d 1575 (Fed. Cir. 1991) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9: IV[D] Wahpeton Canvas Co., Inc. v. Frontier, Inc., 870 F.2d 1546 (Fed. Cir. 1989) . . . . . . . . . . . . 3: IV[D], 3: IV[E], 11: III[C][4], 12: V[C], 18: IV[B] Walsh v. Northrop Grumman Corp., 165 F.R.D. 16 (E.D.N.Y. 1996) . . . . . . . . . . . . . . . . . . . . . . . . 19: VII[F][4], 24: VI[E], 24: VI[F][4] Wang Labs, Inc. v. Am. Online, Inc., 197 F.3d 1377 (Fed. Cir. 1999) . . . . . . . . . 23: I[C]

Case, Statute, and Rule Index 1003 Warner-Jenkinson Co., Inc. v. Hilton Davis Chemical Co., 520 U.S. 17, 117 S. Ct. 1040, 137 L. Ed. 2d 146 (1997) . . . . . . . 2: V[G][2][b], 3: III, 3: IV[B][1], 3: IV[D], 3: V[A][2][b], 3: V[B][2][b], 4: I, 4: I[A], 4: I[A][1], 4: I[D], 4: II[A], 4: II[B], 4: III[A][1], 4: III[B], 4: III[E][3][b], 4: III[F][2][b], 5: II[A], 5: II[B] Warner-Lambert Co. v. Purepac Pharm. Co. (In re Gabapentin Patent Litig.), 503 F.3d 1254 (Fed. Cir. 2007) . . . . . . . . . . . . . 3: III, 3: IV, 3: IV[A], 3: IV[B], 3: IV[B][2], 3: IV[D], 11: III[B][3], 12: IV[C], 18: III[B] Waterman v. Mackenzie, 138 U.S. 252 (U.S. 1891) . . . . . . . . . . . . . . . . . . . . . . . . . . 22: V Water Tech. Corp. v. Calco, Ltd., 850 F.2d 660 (Fed. Cir. 1988) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2: V[I][2], 3: IV[C][2], 5: I[B], 5: I[B][2], 5: I[B][6], 13: VI[B] Watts v. XL Sys., 232 F.3d 877 (Fed. Cir. 2000) . . . . . . . . . . . 2: IV[C][3][a], 2: V[F][1] Welker Bearing Co. v. PHD, Inc., 550 F.3d 1090 (Fed. Cir. 2008) . . . . . . . . . . . . . . . . . . . . 2: V[F][1], 2: V[F][2][b][1], 3: V[A][2][b], 4: III[E][3][b], 6: VII[A][2][b], 8: X[A][2][b] Wenger Mfg., Inc. v. Coating Mach. Sys., Inc., 239 F.3d 1225 (Fed. Cir. 2001) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2: V[E] Western Electric Co. v. Stewart-Warner Corp., 631 F.2d 333 (4th Cir. 1980) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23: I[B] Westinghouse Elec. Corp. v. Republic of Phil., 951 F.2d 1414 (3d Cir. 1991) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19: VII[C], 24: VI[C] Westvaco Corp. v. Int’l Paper Co., 991 F.2d 735 (Fed. Cir. 1993) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16: III[A][5], 23: I, 23: I[C], 23: I[D], 23: I[G], 23: I[I], 23: I[J] White v. Dunbar, 119 U.S. 47, 30 L. Ed. 303, 7 S. Ct. 72 (1886). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .14: IV[A], 20: IV[A] Willingham v. Lawton, 555 F.2d 1340 (6th Cir. 1977) . . . . . . . . . 17: VII[A], 18: VI[C] Wilson Sporting Goods v. David Geoffrey & Assoc., 904 F.2d 677 (Fed. Cir. 1990) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4: III[D] Winans v. Denmead, 56 U.S. 330, 14 L. Ed. 717 (1854) . . . . . . . . . . . 4: I[A], 4: I[A][1] Wind Power Systems, Inc. v. Cannon Financial Group, Inc. (In re Wind Power Systems, Inc.), 841 F.2d 288 (9th Cir. 1988) . . . . . . . . . . . 22: VI Windsurfing Int’l, Inc. v. AMF, Inc., 782 F.2d 995 (Fed. Cir. 1986) . . . . . . . . 10: IV[A] W.L. Gore & Assocs., Inc. v. Garlock, Inc., 721 F.2d 1540 (Fed. Cir. 1983) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8: V[A] WMS Gaming Inc. v. Int’l Game Tech., 184 F.3d 1339 (Fed. Cir. 1999) . . . . . . . . 8: VIII Wolverine World Wide, Inc. v. Nike, Inc., 38 F.3d 1192 (Fed. Cir. 1994) . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11: III[C][4], 12: V[C], 18: IV[B]

X Xerox Corp. v. 3Com Corp., 458 F.3d 1310 (Fed Cir. 2006) . . . . . . . . . . . . . . . . 6: VI[B]

Y Yamanouchi Pharm. Co. v. Danbury Pharmacal, Inc., 231 F.3d 1339 (Fed. Cir. 2000) . . . . . . . . . . . . . . . . . . . . . . 14: III[C], 14: II[D], 20: II[D], 20: III[D]

1004 Case, Statute, and Rule Index Young Dental Mfg. Co. v. Q3 Special Prods., Inc., 112 F.3d 1137 (Fed. Cir. 1997) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9: IV[D], 14: IV[A], 20: IV[A] Young v. Lumenis, Inc., 492 F.3d 1336 (Fed. Cir. 2007) . . . . . . . . . . . . . . . . . . . 10: II[H]

Z Zenith Elecs. Corp. v. PDI Communications Sys., Inc., 522 F.3d 1348 (Fed. Cir. 2008) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3: V[C] Zenith Radio Corp. v. Hazeltine Research, Inc., 395 U.S. 100, 23 L. Ed. 2d 129, 89 S. Ct. 1562 (1969) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10: IV[B] Zirn v. VLI Corp., 681 A.2d 1050 (Del. 1996) . . . . . . . . . . . . . . . . . . . . . . . . . . . 16: II[G] ZMI Corp. v. Cardiac Resuscitator Corp., 844 F.2d 1576 (Fed. Cir. 1988) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2: IV[C][2][b][3] Zoltek Corp. v. United States, 51 Fed. Cl. 829 (Fed. Cl. 2002) . . . . . . . . . . . . . . . 5: II[D] z4 Techs., Inc. v. Microsoft Corp., 507 F.3d 1340 (Fed. Cir. 2007) . . . . . . . . . . .7: VII[B] Zygo Corp. v. Wyko Corp., 79 F.3d 1563 (Fed. Cir. 1996) . . . . . . . . . . . . . . . . . 9: IV[B]

Subject Matter Index

A ABANDONMENT (see ANTICIPATION, Abandonment) ABBREVIATED NEW DRUG APPLICATION (ANDA) Generally, 14: III; 20: I, III, III[A] Accountability related to, 14: III[C]; 20: III[C]–[D] Opinions and evaluations, role of, 14: III, III[C]; 20: III[A]–[D] Abbreviated New Drug Application (ANDA), 14: III; 20: III, III[A] Certifications, Paragraph IV, 14: III, III[B]; 20: III[B], III[D] Hatch-Waxman Act, 14: III, III[B]; 20: III, III[A] Infringement action for filing a Paragraph IV certification, 20: III[B], III[D] Accountability related thereto, 20: III[D] Orange book listing, determining whether to list patents in, 20: III[B] Accountability related thereto, 20: III[C] Paragraph IV, 14: III, III[B]; 20: III[A]–[D] Paragraph IV certifications, 14: III, III[A] Accountability for proper, 14: III, III[C] Determining whether to sue a third party for infringement by filing a Paragraph IV certification, 20: III[B] Determining whether to sue a third party for infringement by filing a Paragraph IV certification, accountability related thereto, 20: III[B], III[D] Opinions and evaluations, related to, 14: III, III[C]

Patent Certifications, Paragraph IV, 14: III, III[B] Infringement actions related thereto, 20: III[B], III[D] Opinions and evaluations, related to, 14: III, III[C]; 20: III[A]–[D] Claim construction, 14: III; 20: III[A]–[D] ABSTRACT IDEAS AND PRINCIPLES, PATENTABILITY OF (see PATENT-ELIGIBLE SUBJECT MATTER (35 U.S.C. § 101)) ACCIDENTAL ANTICIPATION (see ANTICIPATION) ACQUISITIONS (see DEFENSIVE DUE DILIGENCE; PATENT DUE DILIGENCE) ACTIVE INDUCEMENT OF INFRINGEMENT (see INDUCEMENT OF INFRINGEMENT; WILLFUL INFRINGEMENT, OPINIONS TO AVOID, Inducement of infringement) ADEQUATE DISCLOSURE (see WRITTEN DESCRIPTION) ALL ELEMENTS RULE (see DOCTRINE OF EQUIVALENTS, All limitations rule) ALL LIMITATIONS RULE (see DOCTRINE OF EQUIVALENTS, All limitations rule) ALGORITHM (see PATENT-ELIGIBLE SUBJECT MATTER (35 U.S.C. § 101)) AMENDMENT-BASED ESTOPPEL (see CLAIM CONSTRUCTION, Intrinsic evidence, Prosecution history; DOCTRINE OF EQUIVALENTS, Limitations of the doctrine of equivalents, Amendment-based estoppel) ANDA (see ABBREVIATED NEW DRUG APPLICATION (ANDA)) ANALOGOUS ART (see OBVIOUSNESS)

1005

1006

Subject Matter Index ANTICIPATION (see also OBVIOUSNESS) Generally, 6: I, I[A], II; 7: I, VIII Abandonment, 7: IV Accidental and unintended anticipation, 6: IV, IV[A] Activities prior to the invention of the patent, 7: VII Advantages of Section 102(b) compared with, 7: VII[A] Evaluations and opinions based on, 7: VII[B] Assembly Abroad (see ASSEMBLY ABROAD) Burden of proof, clear and convincing evidence, 6: I Burden of proof, on party challenging validity, 6: I Disparagement, 6: VI[D] Enablement of prior art, 6: V, V[A]–[D] Lower standard than enablement for patentability (35 U.C.S. § 112, P 1), 6: V[B] Patents as prior art, U.S. patents presumed enabled for all subject matter, 6: V[C] Wands factors, use of, 6: V[A] Claims (see CLAIM CONSTRUCTION) Claim construction (see CLAIM CONSTRUCTION) Claim construction, necessity of for anticipation opinions and evaluations, 6: I, II Combining more than one reference to establish elements of claimed invention (see OBVIOUSNESS) Derivation, 7: VI Description in printed publication (see ANTICIPATION, Printed publication) Experimental use (see EXPERIMENTAL USE EXEMPTION (35 U.S.C. § 271(e)(1)) Inherent, 6: IV, IV[A] Inherency, anticipation by, 6: IV, IV[A] Inherent disclosure, 6: IV, IV[A] Interpretation of claims (see CLAIM CONSTRUCTION) Means-plus-function claims, 6: VII, VII[A], VII[A][1] Construing means-plus-function claims for anticipation, 6: VII[A][2], VII[A][2][a]–[b] Function, 6: VII[A][2][a]

Process of determining anticipation of, 6: VII[A][3] Structure, 6: VII[A][2][b] Obviousness, compared with, 6: I[A] Patenting abroad, 7: V Patents as prior art, U.S. patents presumed enabled for all subject matter, 6: V[C] Printed publication Generally, 6: I Accessibility, 6: IV As arranged in art, 6: IV[C] Compilations, 6: IV, IV[B] Date of printed publication, 6: III Definition of printed publication, 6: IV Disparagement, 6: VI[D] Foreign patent, 6: IV Elements, as arranged in art, 6: IV[C] Enablement of, 6: V, V[A]–[D] Inherent disclosure, 6: IV, IV[A] Multiple documents, 6: VI, VI[B] Non-U.S. patent, 6: IV One document, 6: VI, VI[B] Patent, U.S. patent is presumed enabled for all disclosed, 6: V[C] Public accessibility, 6: IV Publication requirement defined, 6: IV Publications deposited in libraries, 6: IV Secret document, 6: VI, VI[A]–[D] Single document requirement, 6: VI, VI[B] Teaching away, 6: VI[D] United States Patent, 6: V[C] Works constituting a printed publication, 6: VI, VI[B] Unclaimed disclosures in patents, 6: V[C] Process of proving anticipation, 6: II Compare construed claims with prior art, 6: II Product-by-process claims Generally, 6: VII[B], VII[B][1] Construing product-by-process claims for anticipation, 6: VII[B][2] Nonanalogous art (see OBVIOUSNESS) Obviousness, anticipation compared with, 6: I[A]; 7: I; 8: I On sale Generally, 7: II Commercial offer for sale, 7: II[A][1]

Subject Matter Index Ready for patenting, 7: II[A][2] Two-point test, 7: II[A] Public use Generally, 7: III Definition of, 7: III[A] Non-informing, 7: III[A] Reading limitations into claims (see CLAIM CONSTRUCTION) Sale (see ANTICIPATION, On sale) Teaching away, 6: VI[D] Use, experimental (see EXPERIMENTAL USE EXEMPTION (35 U.S.C. § 271(e)(1)) Use, public (see ANTICIPATION, Public use) Validity, preservation of (see CLAIM CONSTRUCTION) ANTITRUST (see ENFORCEABILITY) ARGUMENT-BASED ESTOPPEL (see DOCTRINE OF EQUIVALENTS, Limitations on the doctrine of equivalents, Amendment-based estoppel) ASSEMBLY ABROAD (35 U.S.C. § 271(f)) Generally, 5: I[D] Application to method claims, 5: I[D][2] Component, definition of, 5: I[D][3] History, Deepsouth Packing Co., 5: I[D][1] Supplied in or from the U.S., 5: I[D][4] ASSIGNMENT(S) (see INVENTORSHIP) ATTORNEY-CLIENT PRIVILEGE OF OPINIONS, WAIVER OF Generally, 24: I, II, II[A] Waiver of attorney-client privilege when relying on opinion for avoidance of willful infringement, 24: IV Attorney-client privilege waived for all opinion-related communications with opinion counsel, 24: IV[A] Importance of maintaining separation between opinion counsel and trial counsel, 24: IV[C] No waiver of attorney-client privilege for communications with trial counsel where trial counsel is separate from opinion counsel, 24: IV[B] ATTORNEY FEES Rule 11, 14: II, II[A]–[D] Opinions, role of, 14: II, II[A]–[D] Section 285 (35 U.S.C. § 285), 14: II, II[A]–[D]

Opinions, role of, 14: II, II[A]–[D] ATTORNEY LIABILITY Fraud on the Patent Office (see ENFORCEABILITY, Inequitable conduct) Inequitable conduct (see ENFORCEABILITY, Inequitable conduct) Securities-related liability (see SECURITIES ISSUES (SEC ISSUES)) AVOIDANCE OF WILLFUL INFRINGEMENT (see WILLFUL INFRINGEMENT, OPINIONS TO AVOID)

B BANKRUPTCY Generally, U.S. patents and bankruptcy, 22: I Assuming or rejecting patent licenses in bankruptcy (11 U.S.C. § 365), 22: V Assuming or rejecting patent licenses in bankruptcy, debtor as licensee, 22: V[A] Assignment of nonexclusive license by debtor licensee, 22: V[A][1] Assumption of nonexclusive license by debtor licensee, 22: V[A][2] Assumption of nonexclusive license by debtor licensee, choice of forum, 22: V[A][2][d] Assumption of nonexclusive license by debtor licensee, the “actual test,” 22: V[A][2][b], V[A][2][c] Assumption of nonexclusive license by debtor licensee, the “hypothetical test,” 22: V[A][2][a], V[A][2][c] Assuming or rejecting patent licenses in bankruptcy, debtor as licensor, 22: V[B] Intellectual Property Bankruptcy Act of 1988 (Section 365(n); 11 U.S.C. § 365(n)), 22: V[B], V[B][2] Lubrizol, 22: V[B][1] Obligations of licensee upon election by licensee under Section 365(n), 22: V[B][5] Obligations of licensor debtor upon election by licensee under Section 356(n), 22: V[B][4] Procedural aspects of Section 365(n), 22: V[B][3]

1007

1008 Subject Matter Index BANKRUPTCY (cont.) Rights of licensee upon election by licensee under Section 356(n), 22: V[B][4] Rights of licensor debtor upon election by licensee under Section 365(n), 22: V[B][5] Waiver by licensee upon election by licensee under Section 365(n), 22: V[B][5] Clearance opinions and evaluations (freedom to operate), 22: IV, IV[A] Generally, 22: IV[A] Identification of potential purchasers of patent rights in liquidation or reorganization, 22: IV[A][1] Effect of separate distribution in bankruptcy of exclusionary patent rights and rights to sue for infringement, 22: VII Initial steps in bankruptcy, 22: III Audit of U.S. patent rights, 22: III Maintaining patent rights, 22: III[B] Patent rights inventory, 22: III[A] Patent valuation, 22: III[C] Evaluations and opinions of patent enforceability, 22: IV, IV[D] Evaluations and opinions of patent ownership, 22: IV, IV[E] Generally, 22: IV[E] Identification of potential purchasers of patent rights in liquidation or reorganization, 22: IV[E][1] Evaluations and opinions of patent validity, 22: IV, IV[C] Executory contracts, patent licenses as (see BANKRUPTCY, Assuming or rejecting patent licenses in bankruptcy) Patent infringement opinions and evaluations Generally, 22: IV, IV[B] Identification of potential purchasers of patent rights in liquidation or reorganization, 22: IV[B][1] Security interests in U.S. patents (see SECURITY INTERESTS IN U.S. PATENTS) Security interests in U.S. patents, effect of bankruptcy on (see SECURITY INTERESTS IN U.S. PATENTS)

Security interests in U.S. patents, perfection of (see SECURITY INTERESTS IN U.S. PATENTS) BEST MODE REQUIREMENT (35 U.S.C. § 112, P 1) Generally, 9: IV, IV[A] Claimed subject matter, relevance of, 9: IV[B] Application to non-claimed subject matter, 9: IV[B] Commercial embodiment(s), relevance of, 9: IV[D] Date, 9: IV Date of filing application, 9: IV Definition, 9: IV Failure to disclose preferred embodiment, 9: IV[C] Preferred embodiment, failure to disclose, 9: IV[C] Production details, relevance of, 9: IV[D] Routine details, relevance of, 9: IV[D] Two-prong analysis, 9: IV[A] Objective, 9: IV[A] Subjective, 9: IV[A] BURDEN OF PROOF Anticipation, 6: I Infringement, 3: IV[B][3]; 4: I[C] Invalidity, 6: I; 7: I; 9: I Obviousness, 8: I, II Unenforceability, 10: III[F] BUSINESSPEOPLE, RELIANCE ON EVALUATIONS AND OPINIONS Generally, 1: I[E]; 16: IV Avoidance of willful infringement (see WILLFUL INFRINGEMENT, OPINIONS TO AVOID) Bankruptcy (see BANKRUPTCY) Competency of opinions of patent noninfringement or invalidity, 16: IV, IV[A] (see also CLAIM CONSTRUCTION, NECESSITY OF IN PATENT OPINIONS AND EVALUATIONS) Minimum requirements for competent opinions, 16: IV, IV[A], IV[A][1]–[9] Due diligence (see PATENT DUE DILIGENCE; DEFENSIVE DUE DILIGENCE) FDA issues (see ABBREVIATED NEW DRUG APPLICATION (ANDA)) Litigation, 14: I, II, III, IV

Subject Matter Index Pre-filing investigations, 14: I, II, III, IV; 20: I, II, II[A]–[B] Preliminary injunctions, 14: IV, IV[A] Rule 11, 14: I, II, II[A]–[B]; 20: I, II, II[A]–[B] Section 285 (35 U.S.C. § 285), 14: I, II, II[C]–[D] Pre-litigation investigations (see BUSINESSPEOPLE, RELIANCE ON EVALUATIONS AND OPINIONS, Litigation) Reliance on for avoidance of willful infringement (see WILLFUL INFRINGEMENT, OPINIONS TO AVOID; BUSINESSPEOPLE, RELIANCE ON EVALUATIONS AND OPINIONS, Litigation; Competency of opinions of patent noninfringement or invalidity) Rule 11 investigations, (see BUSINESSPEOPLE, RELIANCE ON EVALUATIONS AND OPINIONS, Litigation) Requirements for opinions of counsel (see WILLFUL INFRINGEMENT, OPINIONS TO AVOID; BUSINESSPEOPLE, RELIANCE ON EVALUATIONS AND OPINIONS, Litigation; Competency of opinions of patent noninfringement or invalidity) Sarbanes-Oxley Act (see SECURITIES ISSUES (SEC ISSUES)) SEC issues, 16: IV (see also SECURITIES ISSUES (SEC ISSUES)) Securities issues, 16: IV (see SECURITIES ISSUES (SEC ISSUES)) Strategic patenting (see STRATEGIC PATENTING) Willful infringement, avoidance of (see WILLFUL INFRINGEMENT, OPINIONS TO AVOID) BUSINESSPERSON, RELIANCE ON EVALUATIONS AND OPINIONS (see BUSINESSPEOPLE, RELIANCE ON EVALUATIONS AND OPINIONS)

C CLEARANCE OPINIONS AND EVALUATIONS Generally, 12: I, II Limitations on scope of opinions and evaluations, 12: II[A]

Limiting liability, 12: II[D] Patent searching, 12: II[C] Accurate understanding and description of proposed technology, 12: II[C][1] Independent patent searches, 12: II[C] [2]–[3] Limiting liability, 12: II[D] Multiple independent patent searches, 12: II[C][2]–[3] Reporting considerations, 12: II[D] Use of term “freedom to operate,” 12: II[B] CLAIMS (see CLAIM CONSTRUCTION) CLAIM CONSTRUCTION Generally, 2: I, II Accused infringing product or process, not to be considered in claim construction, 2: V[A] Avoid importing limitations into claims from specification, 2: V[A] Avoid reading the preferred embodiment out of the claims, 2: V[C] Claim differentiation, doctrine of, 2: V[E] Claims, definition of, 2: II Jurisprudence, 2: II[B] Statutory basis, 2: II[A] Dictionary definitions, 2: III[A][4][a] Disclaimer (see CLAIM CONSTRUCTION, Ordinary meaning of claim terms) Define, claims define the scope of the patent grant, 2: II Jurisprudence, 2: II[B] Statutory basis, 2: II[A] Elements (see CLAIM CONSTRUCTION, Limitations) Evidence (see also CLAIM CONSTRUCTION, Extrinsic evidence, Intrinsic evidence) Generally, 2: III, III[A], III[A][1], III[C], III[C][1] All evidence of claim construction that is not intrinsic evidence is extrinsic evidence, 2: III[A][2], III[C], III[C][1], III[C][3], III[C][5] Dictionary definitions, 2: III[A][4][a], III[B][1] Extrinsic evidence for claim construction, 2: III[A][1], III[C][5] Intrinsic evidence for claim construction, 2: III[A][1], III[C][3]

1009

1010

Subject Matter Index CLAIM CONSTRUCTION (cont.) Extrinsic evidence Generally, 2: III, III[A], III[A][1], III[C], III[C][1] All evidence that is not intrinsic evidence is extrinsic evidence, 2: III[A][2], III[C], III[C][1], III[C][3], III[C][5] Defined, 2: III[A][2] Dictionary definitions, 2: III[A][4][a], III[B][1] Ordinary and customary meaning of claim terms, extrinsic evidence in determining, 2: IV[C][2][a] Role of dictionaries and other defining sources, 2: III[A][4][a] Timing for evidence, 2: III[C][2] Unrelated applications are extrinsic evidence only, 2: III[C][3][c][1][h] When considered in claim construction, 2: III[A][3], III[B][2] Internal consistency Internal consistency of claim and specification terms, 2: V[D], V[D][2] Internal consistency of claim terms, 2: V[D], V[D][1]–[2] Intrinsic evidence Generally, 2: III, III[A], III[A][1], III[C], III[C][1] All evidence that is not intrinsic evidence is extrinsic evidence, 2: III[A][2], III[C], III[C][1], III[C][3], III[C][5] Claims, 2: III[C][3][a] Defined, 2: III[A][2], III[C][3] Dictionary definitions, 2: III[A][4][a], III[B][1] File history (see CLAIM CONSTRUCTION, Intrinsic evidence, Prosecution history) Ordinary and customary meaning of claim terms, 2: IV[C][2][b] Prior art, cited in patent or prosecution history, 2: III[C][3][c][1][f] Prosecution history, 2: III[C][3][c], III[C][3][c][1], III[C][3][c][1][a]–[h] Prosecution history, distinct line between intrinsic and extrinsic evidence, 2: III[C][3][c][1][g] Prosecution history, prior art cited in, 2: III[C][3][c][1][f]

Prosecution history, related applications, 2: III[C][3][c][1][a]–[d] Prosecution history, scope of, 2: III[C] [3][c](1), III[C][3][c][1][a]–[h] Prosecution history, unrelated applications as extrinsic evidence only, 2: III[C][3][c][1][h] Related applications, 2: III[C][3][c][1][a]–[d] Related applications, Examiner’s reliance on statements made in 2: III[C][3][c][1][e] Related applications, prior art cited in, 2: III[C][3][c][1][f] Related applications, prior related, 2: III[C][3][c][1][a] Related applications, prior related child and grandchild, 2: III[C][3][c][1][d] Related applications, prior related continuation-in-part, 2: III[C][3][c][1][b] Related applications, prior related sibling, 2: III[C][3][c][1][c] Role of dictionaries and other defining sources, 2: III[A][4][a] Specification, 2: III[C][3][b] Timing for evidence, 2: III[C][2] Unrelated applications, extrinsic evidence only, 2: III[C][3][c][1][h] Weight of intrinsic evidence, by type of evidence, 2: III[C][4], III[C][4][a]–[c] When considered in claim construction, 2: III[A][3], III[B][2] Invalidity, construction of claims to preserve validity, 2: V[I] Limitations, 2: I, II Markush claims, 2: V[J][3][a] Means-plus-function claims Generally, 2: V[F] Construing means-plus-function claims for infringement, 2: V[F] 3: V[A], V[A][2], V[A][2][a]-[b]; 4: III[E], III[E][3], III[E][3][a]–[b] Construing means-plus-function claims for validity, 2: V[F] 6: VII[A], V[A] [2], V[A][2][a]-[b]; 8: X[A], X[A][2], X[A][2][a]–[b]; 9: V[F], V[F][1]-[2] Construing means-plus-function limitations, 2: V[F][2] Construing means-plus-function limitations, function, 2: V[F][2][a]

Subject Matter Index Construing means-plus-function limitations, section 112 paragraph 6 equivalency, 2: V[F][2][b][1] Construing means-plus-function limitations, structure, 2: V[F][2][b] Definiteness requirements for structure, 9: V[F], V[F][1]–[2] Determining whether a limitation is a means-plus-function limitation, 2: V[F][1] Equivalency, section 112 paragraph 6 equivalency, 2: V[F][2][b][1] Necessity of claim construction in patent opinions and evaluations, 2: V[A]; 3: IV, IV[A], IV[A][1]; 11: III[A], III[A] [1]–[2], III[B][3], III[C][2]; 12: III, III[A]–[B], IV[C], V[A], VI[A]; 14: II, II[B], III, IV[A]; 17: III, V; 18: II, II[A]–[B], III[B], IV[A], V[A], VI[D]; 20: II, II[B], III[A]–[D], IV[A]; 23: I[D] Ordinary and customary meaning of claim terms, 2: IV[C][2], IV[C][2][a]–[b], IV[C][2][b][1]–[3], IV[C][3] Different construction from ordinary and customary meaning, 2: IV[C][3], IV[C][3][a]–[b] Disavowal of claim scope, 2: IV[C][3][b] Disclaimer of claim scope, 2: IV[C][3][b] Patentee as own lexicographer, 2: IV[C][3][a] Extrinsic evidence, use of, 2: IV[C][a] Preamble, as a limitation, 2: IV[H], IV[H][1] Preferred embodiment, avoid reading out the, 2: V[C] Process of claim construction Generally, 2: IV, IV[A], IV[C] Claim terms, 2: IV[C][1] Determination of ordinary and customary meaning of claim terms, 2: IV[C][2] Step-by-step process, 2: IV[C] Product-by-process claims Generally, 2: V[G] Construing product-by-process claims for infringement, 2: V[G][2], V[G][2][a]–[d]; 3: V[B][2], V[B][2][a]–[d]; 4: III[F][2], III[F][2][a]–[d]

Construing product-by-process claim terms for validity, 2: V[G][1]; 6: VII[B], VII[A][1]–[2]; 8: X[B], X[B][1]–[2] Scope of claims, 2: II Scope of claims, relationship to patent grant, 2: II Jurisprudence, 2: II[B] Statutory basis, 2: II[A] Specification, avoid importing limitations from specification into claims, 2: V[A] Structure, 2: V[H], V[J] Body, 2: V[H], V[J] Preamble, 2: V[H], V[J] Transitional phrase, 2: V[H], V[J], V[J][1]–[3] Terms Claim differentiation, doctrine of, 2: V[E] Internal consistency of claim and specification terms, 2: V[D], V[D][2] Internal consistency of claim terms, 2: V[D], V[D][1]–[2] Transitional phrases Generally, 2: V[J] Comprising (open-ended), 2: V[J][1] Consisting of (closed), 2: V[J][3] Consisting essentially of, 2: V[J][2] Markush, consisting of, 2: V[J][3][a] Validity, construction of claims to preserve validity, 2: V[I] CLAIM CONSTRUCTION, NECESSITY OF IN PATENT OPINIONS AND EVALUATIONS Generally, 2: V[A]; 3: IV, IV[A], IV[A][1]; 11: III[A], III[A][1]–[2], III[B][3], III[C][2]; 12: III, III[A]–[B], IV[C], V[A], VI[A]; 14: II, II[B], III, IV[A]; 17: III, V; 18: II, II[A]–[B], III[B], IV[A], V[A], VI[D]; 20: II, II[B], III[A]–[D], IV[A]; 23: I[D] CO-INVENTOR(S) (see INVENTORSHIP) CO-INVENTORSHIP (see INVENTORSHIP) COMMON INTEREST (see DEFENSIVE DUE DILIGENCE, Waiver of attorney-client privilege in due diligence) COMMON INTEREST AGREEMENT (see DEFENSIVE DUE DILIGENCE, Waiver of attorney-client privilege in due diligence)

1011

1012 Subject Matter Index COMPETENCY OF OPINIONS (see also WILLFUL INFRINGEMENT, OPINIONS TO AVOID, Competency of opinions to avoid willful infringement) Minimum requirements of competent opinions of patent noninfringement or invalidity, 16: IV, IV[A], IV[A][1]–[9] Claim construction required (see CLAIM CONSTRUCTION, NECESSITY IN PATENT OPINIONS AND EVALUATIONS) Competency of opinions of patent noninfringement or invalidity, 16: IV, IV[A] CONTRIBUTORY INFRINGEMENT ((35 U.S.C. § 271(c)) Generally, 5: I[C] Direct infringement, relation to, 5: I[A] Direct infringement required, 5: I[C][1] Knowledge of the patent and resulting infringement, 5: I[C][2] Intent, not required, 5: I[C][2] Staple article of commerce, substantial noninfringing use, 5: I[C][3]

D DECLARATORY JUDGMENT Licensing overtures, risk of creating declaratory judgment jurisdiction, 19: VI Pre-filing due diligence considerations, 14: II, II[A]–[D], III[C] DEFENSIVE DUE DILIGENCE (see also PATENT DUE DILIGENCE) Generally, 19: I Initial steps, 19: II Audit of patent rights, 19: II Patent rights inventory, 19: II[A][1] Patent rights valuation, 19: II[A][2] Timing of patent rights audits, 19: II[A] Clearance opinions and evaluations (freedom to operate), 19: III, III[A] Identification of potential purchasers of patent rights, 19: III[A][1] Representations and warranties, 19: III[A][2] Correcting errors and potential invalidity in issued U.S. patents, 19: V Inventorship, correcting errors in, 19: V[C] Reexamination, 19: V[B] Reissue, 19: V[A]

Enforceability opinions and evaluations, 19: III, III[D] Evaluations and opinions of patent validity, 19: III, III[C] Infringement opinions and evaluations, 19: III, III[B] Identification of potential purchasers of patent rights, 19: III[B][1] Licensing overtures, risk of declaratory judgment, 19: VI Ownership opinions and evaluations, 19: III, III[E] Identification of errors in named inventors, 19: III[E][2] Identification of potential purchasers of patent rights, 19: III[E][1] Representations and warranties on patent ownership, 19: III[E][3] Unenforceability, curing issues of potential unenforceability, 19: IV, IV[A]–[B] Curing potential unenforceability due to inequitable conduct in procuring a U.S. patent, 19: IV[A] Curing potential unenforceability due to misuse of an issued U.S. patent, 19: IV[B] Waiver of attorney-client privilege in due diligence, 19: VII, VII[A]; 24: VI, VI[A] Avoiding waiver of attorney-client privilege in due diligence, 19: VII[A]; 24: VI[A], VI[C] Choice of law issues affecting waiver of attorney-client privilege, 19: VII[B]; 24: VI[B] Common interest doctrine, 19: VII[E]; 24: VI[E] Confidential disclosure of privileged material to third parties, risk of waiver associated with, 19: VII[D]; 24: VI[D] Disclosure of privileged material to third parties, risk of waiver associated with, 19: VII[C]; 24: VI[A], VI[C] Other issues associated with risk of waiver when disclosing attorney-client privileged materials to third parties, 19: VII[F], VII[F] [1]–[5]; 24: VI[F], VI[F][1]–[5] Waiver of work product immunity in due diligence, 19: VII, VII[A]; 24: VI, VI[A]

Subject Matter Index Avoiding waiver of work product immunity in defensive due diligence, 19: VII[A]; 24: VI[A], VI[C] Choice of law issues affecting waiver of work product immunity, 19: VII[B]; 24: VI[B] Common interest doctrine, 19: VII[E]; 24: VI[E] Confidential disclosure of work product to third parties, risk of waiver associated with, 19: VII[D]; 24: VI[D] Disclosure of work product to third parties, risk of waiver associated with, 19: VII[C]; 24: VI[A], VI[C] Other issues associated with risk of waiver when disclosing work product to third parties, 19: VII[F], VII[F][1]–[5]; 24: VI[F], VI[F][1]–[5] DIRECT INFRINGEMENT (35 U.S.C. § 271(a)) Generally, 3: II Experimental use (see EXPERIMENTAL USE EXEMPTION (35 U.S.C. § 271(e)(1)) Indirect infringement, compared with, 5: I[A] Imports into the U.S., 3: I, II Makes, uses, sells, or offers to sell in the U.S., 3: I, II One party requirement, 5: II[A] (see also DIVIDED INFRINGEMENT) Single party requirement, 5: II[A] (see also DIVIDED INFRINGEMENT) DISCLOSURE (see ENABLEMENT; WRITTEN DESCRIPTION) DISCLAIMER (see CLAIM CONSTRUCTION, Ordinary meaning of claim terms) DIVIDED INFRINGEMENT Generally, 5: II Actions outside the United States, 5: II[D] Arms-length relationship, effect of 5: II[C] Directs or controls the acts of another, 5: II[B] Method claims, 5: II Multiple parties, 5: II[A] Product claims, 5: II Process claims, 5: II United States, requirement for acts performed in, 5: II[D]

Vicarious liability for the acts of another, 5: II[C] Directs or controls the acts of another, 5: II[C] DOCTRINE OF EQUIVALENTS Generally, 4: I All elements rule, 4: II[A] All limitations rule (all elements rule, doctrine of vitiation), 4: II[A] Amendment-based estoppel, 4: III[A][1] Argument-based estoppel, 4: III[A][2] Burden of proof, preponderance of the evidence, 4: I[C] Dedication-disclosure rule, 4: III[C] Defining equivalents, 4: II, II[A]-[B], III Differences from literal infringement, 4: I[B] Doctrine of vitiation, 4: II[A] Exclusion, 4: III[B] Fact, questions of law and, 4: I[D] Function-way-result, 4: II[B] History of the doctrine of equivalents, 4: I[A] Hypothetical claim, 4: III[D] Prior art and the hypothetical claim, 4: III[D] Insubstantial differences, 4: II[B] Interchangeability, 4: II[B] Law, questions of fact and, 4: I[D] Limitations on the doctrine of equivalents, 4: III Amendment-based estoppel, 4: III[A][1] Argument-based estoppel, 4: III[A][2] Dedication-disclosure rule, 4: III[C] File history estoppel (prosecution history estoppel), 4: III[A] Exclusion, 4: III[B] Hypothetical claim, 4: III[D] Prior art and the hypothetical claim, 4: III[D] Prosecution history estoppel, 4: III[A] Means-plus-function claims, infringement under the doctrine of equivalents, 4: III[E], III[E][3], III[E][3][a]–[b] Prior art and the hypothetical claim, 4: III[D] Product-by-process claims, infringement under the doctrine of equivalents, 4: III[F], III[F][2], III[F][2][a]–[d] Role of the potentially infringing product or process, 4: I[B]

1013

1014 Subject Matter Index DOUBLE PATENTING, NONSTATUTORY OBVIOUS-TYPE Patentability opinions and evaluations, as consideration in, 17: VIII[B] DUE DILIGENCE (see DEFENSIVE DUE DILIGENCE; PATENT DUE DILIGENCE)

E ENABLEMENT (35 U.S.C. § 112, P 1) Generally, 9: II Date for determining enablement, 9: II[C] Embodiments, number of enabled, 9: II[F] Failure of the U.S. Patent and Trademark Office to issue an enablement rejection, no presumption related to, 9: II[G] Full scope of claims must be enabled, 9: II[A] Novel subject matter, enablement of, 9: II[E] Previously known subject matter, 9: II[D] Teaching away in patent’s specification, 9: II[H] Wands factors, 9: II[B] Written description, distinguished from enablement, 9: III[A] ENFORCEABILITY Generally, 10: I Antitrust (see ENFORCEABILITY, Patent misuse) Inequitable conduct Generally, 10: III Balancing, level of culpability of conduct compared with effect of unenforceability, 10: III[G] Burden of proof, elevated standard of proof, 10: III[F] Curing unenforceability due to inequitable conduct, 10: III[H] Discretion of court, based on balancing level of culpability of conduct compared with effect of unenforceability, 10: III[G] Definition of inequitable conduct, 10: III[B] Duty of candor and good faith to the U.S. Patent Office, 10: III[A] Intent, 10: III[D] Intent, inferred from materiality, 10: III[E] Intent, separate from materiality, 10: III[D]

Materiality, 10: III[C], III[C][1], III[D] Materiality, intent inferred from, 10: III[E] Materiality, separate from intent, 10: III[D] Material information, examples of, 10: III[C][1] Rule 56, 10: III[A] Standard for inequitable conduct, 10: III[B] Opinions of patent unenforceability, special concerns related to, 10: II; 12: VI[C] Potential weakness of opinions of patent unenforceability, 10: II; 12: VI[C] Patent misuse Generally, 10: IV Antitrust, relation to, 10: IV[B] Broadened scope of patent with anticompetitive effect, 10: IV[A] Curing patent unenforceability due to patent misuse, 10: IV[F] Definition of, 10: IV[A] Per se patent misuse, 10: IV[C] Evaluations of (see UNENFORCEABILITY OPINIONS AND EVALUATIONS) Extension beyond patent term, 10: IV[C] Non-patent misuse, statutory definition of, 10: IV[D] Opinions of (see UNENFORCEABILITY OPINIONS AND EVALUATIONS) Royalties beyond patent term, 10: IV[C] Rule of reason, 10: IV[E] Statutory non-patent misuse, 10: IV[D] Tying, 10: IV[C] EQUIVALENTS (see DOCTRINE OF EQUIVALENTS) ESTOPPEL (see CLAIM CONSTRUCTION; DOCTRINE OF EQUIVALENTS) ESTOPPEL, AMENDMENT-BASED (see CLAIM CONSTRUCTION; DOCTRINE OF EQUIVALENTS) ESTOPPEL, ARGUMENT-BASED (see CLAIM CONSTRUCTION; DOCTRINE OF EQUIVALENTS) EVIDENCE, CLAIM CONSTRUCTION (see CLAIM CONSTRUCTION,

Subject Matter Index Evidence, Extrinsic evidence, Intrinsic evidence) EVIDENCE, EXTRINSIC (see CLAIM CONSTRUCTION, Evidence, Extrinsic evidence) EVIDENCE, INTRINSIC (see CLAIM CONSTRUCTION, Evidence, Intrinsic evidence) EXPERIMENTAL USE EXEMPTION (35 U.S.C. § 271(e)(1)) Generally, 5: III, III[A] FDA, relation to, 5: III[A], III[A], III[A][1], III[A][2] FDA regulatory review, relation to, 5: III[A], III[A], III[A][1], III[A][2] Research tools, 5: III[A][2] EXTENSION OF PATENT TERM (see ABBREVIATED NEW DRUG APPLICATION (ANDA)) EXTRINSIC EVIDENCE (see CLAIM CONSTRUCTION, Evidence, Extrinsic evidence)

F FESTO (see DOCTRINE OF EQUIVALENTS, Amendment-based estoppel) FRAUD ON THE PATENT OFFICE (see ENFORCEABILITY, Inequitable conduct) FREEDOM TO OPERATE (see CLEARANCE OPINIONS AND EVALUATIONS) FREEDOM TO OPERATE EVALUATIONS AND OPINIONS (see CLEARANCE OPINIONS AND EVALUATIONS)

G GRAHAM FACTORS (see OBVIOUSNESS, Graham factors) GRANT, SCOPE OF (see CLAIM CONSTRUCTION, Define, scope of patent grant)

I INDEFINITENESS (35 U.S.C. § 112, P 2) Generally, 9: V Clarity, degree required, 9: V[C] Court decisions, examples of, 9: V[G] Difficulty of construing claims, effect on, 9: V[D] Means-plus-function claims, structure of, 9: V[F][1]–[2]

Notice effect of, 9: V[A] Metes and bounds of claim, 9: V[A] INDIRECT INFRINGEMENT Generally, 5: I Compared with direct infringement, 5: I[a] Direct infringement required, 5: I[B][1] Divided infringement (see DIVIDED INFRINGEMENT) Contributory infringement (see CONTRIBUTORY INFRINGEMENT) Inducement to infringe (see INDUCEMENT OF INFRINGEMENT; WILLFUL INFRINGEMENT, OPINIONS TO AVOID, Inducement of infringement) Manufacture abroad (35 U.S.C. § 271(g)) (see PROCESS PATENT AMENDMENTS ACT (35 U.S.C. § 271(g)) Supplying components in or from the U.S. for assembly abroad (35 U.S.C. § 271(f)) (see ASSEMBLY ABROAD (35 U.S.C. § 271(f)) INDUCEMENT OF INFRINGEMENT (35 U.S.C. § 271(b)) Generally, 5: I[B] Active inducement of infringement, 5: I[B], I[B][2] Affirmative act required, 5: I[B][2] Intent, specific intent 5: I[B][3], I[B][3]–[6] Opinions related to (see WILLFUL INFRINGEMENT, OPINIONS TO AVOID, Inducement of infringement) Specific intent, 5: I[B][3], I[B][3]–[6] Willful infringement, relation to (see WILLFUL INFRINGEMENT, OPINIONS TO AVOID, Inducement of infringement) Affirmative act required, 5: I[B][2] Corporate officers, liability for, 5: I[B][7] Direct infringement, relation to, 5: I[A] Direct infringement required, 5: I[B][1] Intent, specific intent 5: I[B][3], I[B][3]–[6] Two-part test for intent, 5: I[B][4] Knowledge and intent, 5: I[B][3], I[B][3]–[6] Liability for, corporate officers, 5: I[B][7]

1015

1016

Subject Matter Index Opinions, role of (see WILLFUL INFRINGEMENT, OPINIONS TO AVOID, Inducement of infringement) Willful infringement, role of (see WILLFUL INFRINGEMENT, OPINIONS TO AVOID, Inducement of infringement) Specific intent, 5: I[B][3], I[B][3]–[6] INEQUITABLE CONDUCT (see ENFORCEABILITY, Inequitable conduct) INHERENCY Anticipation by, 6: IV, IV[A] Requirements for anticipation by, 6: IV, IV[A] INFRINGEMENT Acts outside the United States Divided infringement (see DIVIDED INFRINGEMENT, Acts outside the United States) Acts in and outside the United States Divided infringement (see DIVIDED INFRINGEMENT, Acts outside the United States) Assembly abroad (35 U.S.C. § 271(f)) (see ASSEMBLY ABROAD (35 U.S.C. § 271(f)) Avoidance of willful infringement (see WILLFUL INFRINGEMENT, OPINIONS TO AVOID) Contributory infringement (see CONTRIBUTORY INFRINGEMENT) Divided infringement (see DIVIDED INFRINGEMENT) Doctrine of Equivalents (see DOCTRINE OF EQUIVALENTS) Evaluations of noninfringement (see NONINFRINGEMENT OPINIONS AND EVALUATIONS) Equivalents (see DOCTRINE OF EQUIVALENTS) Experimental use (35 U.S.C. § 271(e)(1)) (see EXPERIMENTAL USE EXEMPTION (35 U.S.C. § 271(e)(1)) Indirect infringement (see INDIRECT INFRINGEMENT) Assembly abroad (35 U.S.C. § 271(f)) (see ASSEMBLY ABROAD (35 U.S.C. § 271(f)) Contributory infringement (see CONTRIBUTORY INFRINGEMENT)

Divided infringement (see DIVIDED INFRINGEMENT) Inducement to infringe (see INDUCEMENT OF INFRINGEMENT; WILLFUL INFRINGEMENT, OPINIONS TO AVOID, Inducement of infringement) Manufacture abroad (see PROCESS PATENT AMENDMENTS ACT (35 U.S.C. § 271(g)) Supplying components in or from the U.S. for assembly abroad (35 U.S.C. § 271(f)) (see ASSEMBLY ABROAD (35 U.S.C. § 271(f)) Inducement to infringe (see INDUCEMENT OF INFRINGEMENT; Opinions of noninfringement and invalidity related to (see WILLFUL INFRINGEMENT, OPINIONS TO AVOID, Inducement of infringement) Willful infringement (see WILLFUL INFRINGEMENT, OPINIONS TO AVOID, Inducement of infringement) Joint infringement (see DIVIDED INFRINGEMENT) Literal infringement (see LITERAL INFRINGEMENT) Multiple parties (see DIVIDED INFRINGEMENT) Noninfringement opinions and evaluations (see NONINFRINGEMENT OPINIONS AND EVALUATIONS) One party requirement, 5: II[A] (see also DIVIDED INFRINGEMENT) Opinions of noninfringement (see NONINFRINGEMENT OPINIONS AND EVALUATIONS) Research tools (see EXPERIMENTAL USE EXEMPTION (35 U.S.C. § 271(e)(1), Research tools) Safe harbor, experimental use (see EXPERIMENTAL USE EXEMPTION (35 U.S.C. § 271(e)(1)) Single party requirement, 5: II[A] (see also DIVIDED INFRINGEMENT)

Subject Matter Index Supplying components in or from the U.S. for assembly abroad (35 U.S.C. § 271(f)) (see ASSEMBLY ABROAD (35 U.S.C. § 271(f)) Willful (see WILLFUL INFRINGEMENT, OPINIONS TO AVOID) Noninfringement (see INFRINGEMENT) INTRINSIC EVIDENCE (see CLAIM CONSTRUCTION, Evidence, Intrinsic evidence) INVALIDITY Anticipation (see ANTICIPATION) Best mode (see BEST MODE) Construction of claims to preserve validity, 2: V[I] (see also CLAIM CONSTRUCTION) Enablement (see ENABLEMENT (35 U.S.C. § 112, P 1)) Evaluations (see INVALIDITY OPINIONS AND EVALUATIONS) Fraud on the Patent Office (see ENFORCEABILITY, Inequitable conduct) Indefiniteness (see INDEFINITENESS (35 U.S.C. § 112, P 2)) Inequitable conduct (see ENFORCEABILITY, Inequitable conduct) Opinions (see INVALIDITY OPINIONS AND EVALUATIONS) Patent-eligible subject matter (see PATENT-ELIGIBLE SUBJECT MATTER (35 U.S.C. § 101)) Utility (see PATENT-ELIGIBLE SUBJECT MATTER (35 U.S.C. § 101)) Written description (see WRITTEN DESCRIPTION (35 U.S.C. § 112, P 1)) INVALIDITY OPINIONS AND EVALUATIONS Generally, 12: I, V Claim construction required, 12: III, III[A]–[B], V[A] Competency of (see COMPETENCY OF OPINIONS) Consider all possible means of invalidity, 12: V[B] Anticipation, 12: V[B] Best mode, 12: V[B] Enablement, 12: V[B] Other grounds of invalidity, 12: V[B] Written description, 12: V[B] Every claim must be addressed, 12: V[C]

Compared with noninfringement opinions, 12: IV, V[C] Prior Art, 12: V[D] Limiting liability related to searching prior art, 12: V[E] Prior art searching, 12: V[D] Reporting considerations, 12: V[F] Searching, prior art, 12: V[D] Limiting liability related to searching prior art, 12: V[E] INVENTOR(S) (see INVENTORSHIP) INVENTORSHIP Co-ownership, importance and effect of, 18: VI[B]–[C] Errors in named inventors, 18: VI[H]; 19: III[E][2] Inventorship and ownership (co-inventorship and co-ownership), opinions and evaluations regarding, 11: IV; IV[A]–[B]; 18: VI, VI[A]–[H]; 19: III, III[E]; 22: IV, IV[E] Claim construction, importance and role of, 18: VI[D] Co-inventorship, correcting errors in, 18: VI[H]; 19: III[E][2] Co-inventorship, relationship to ownership, 18: VI[A] Co-ownership, importance and effect of, 18: VI[B]–[C] Correcting inventorship errors, 18: VI[H]; 19: III[E][2] Correcting split ownership, 18: VI[G] Every claim, considerations related thereto, 18: VI[E] Inventorship, correcting errors in, 18: VI[H]; 19: III[E][2] Inventorship, relationship to ownership, 18: VI[A] Ownership, correction spilt ownership, 18: VI[G] Ownership, potential issues and red flags, 18: VI[F] Ownership, relationship to inventorship, 18: VI[A] Inventorship and ownership, relationship to each other, 18: VI[A] Inventorship and ownership, verifying, 11: IV, IV[A]–[B] Relationship of inventorship to ownership, 18: VI[A] Representations and warranties regarding patent ownership, 19: III[E][3]

1017

1018

Subject Matter Index ITC (INTERNATIONAL TRADE COMMISSION) INVESTIGATIONS Generally, 14: V; 20: V Preparation for, 14: V, V[B]; 20: V, V[B] Role of opinions and evaluations related to, 14: V; 20: V Timing, 14: V, V[B]

Limitation-by-limitation comparison of potentially infringing product or process with construed claims, 3: IV[B][1] Product-by-process claims, infringement of, 3: V[B], V[B][1]–[2], V[B][2][a]–[d]; 4: III[F], III[F][1]–[2], III[F][2][a]–[d]

J JOINT INFRINGEMENT (see DIVIDED INFRINGEMENT) JOINT INVENTOR(S) (see INVENTORSHIP) JOINT INVENTORSHIP (see INVENTORSHIP) JOINT OWNER(S) (see INVENTORSHIP) JOINT OWNERSHIP (see INVENTORSHIP)

L LICENSING (see DEFENSIVE DUE DILIGENCE; PATENT DUE DILIGENCE) LITERAL INFRINGEMENT Generally, 3: I–V Additional elements, effect on infringement Comprising claims, 3: IV[C][1] Consisting essentially of claims, 3: IV[C][2] Consisting of claims, 3: IV[C][3] Burden of proof, preponderance of the evidence, 3: IV[B][3] Dependent claims, 3: IV[D] Direct infringement, 3: II Every limitation must be met by an element in the accused product of process, 3: IV[B][1] Fact, question of, 3: IV[B][2] Means-plus-function claims, infringement of, 3: V, V[A], V[A][1]–[2], V[A][2][a]–[b]; 4: III[E], III[E][1]–[3], III[E][3][a]–[b] One claim, infringement of is infringement of a patent, 3: IV[E] Process of determining literal infringement, 3: IV Claim construction always required, 3: IV, IV[A], IV[A][1] Compare construed claim with potentially infringing product or process, 3: IV[B], IV[B][1]–[3]

M MANUFACTURE ABROAD (see PROCESS PATENT AMENDMENTS ACT (35 U.S.C. § 271(g)) MARKUSH CLAIMS Generally, 2: V[J][3][a] MEANS PLUS FUNCTION CLAIMS Generally, 2: V[F] Construing means-plus-function limitations, 2: V[F][2], 3: V, V[A], V[A][1]–[2] Construing means-plus-function limitations for infringement, 3: V, V[A], V[A][1]–[2], V[A][2][a]–[b]; 4: III[E], III[E][3], III[E][3][a]–[b] Construing means-plus-function claims for anticipation, 6: VII[A][2], VII[A][2][a]–[b] Construing means-plus-function claims for obviousness, 8: X, X[A][1], X[A][2] Construing means-plus-function limitations, function, 2: V[F][2][a]; 3: V[A][2][b]; 6: VII[A][2][a] Construing means-plus-function limitations, section 112 paragraph 6 equivalency, 2: V[F][2][b][1] Construing means-plus-function limitations, structure, 2: V[F][2][b]; 3: V[A][2][b]; 6: VII[A][2][b] Determining whether a limitation is a means-plus-function limitation, 2: V[F][1] Equivalency, section 112 paragraph 6 equivalency, 2: V[F][2][b](1) Infringement under the doctrine of equivalents, 4: III[E], III[E][3], III[E][3][a]–[b] Literal infringement, 3: V[A][2], V[A][2][a]–[b] MERGERS (see DEFENSIVE DUE DILIGENCE; PATENT DUE DILIGENCE)

Subject Matter Index

N NONINFRINGEMENT (see INFRINGEMENT) NONINFRINGEMENT OPINIONS AND EVALUATIONS Generally, 12: I, IV Claim construction required, 12: III, III[A]–[B], IV[C] Competency of (see COMPETENCY OF OPINIONS) Description of technology to be evaluated (practiced), 12: IV[A] Equivalents, infringement under the doctrine of equivalents, consideration of, 12: IV[B] Indirect infringement, 12: IV[D] Literal infringement, consideration of, 12: IV[B] Reporting considerations, 12: IV[E] NOVELTY (see ANTICIPATION)

O OBVIOUSNESS (see also ANTICIPATION) Generally, 8: I, II, II[A]–[C] Analogous art requirement, 8: V[B] Anticipation, compared with, 6: I[A]; 7: I; 8: I Combining more than one reference to establish elements of claimed invention Difference between the prior art and the claims, 8: VI Federal Circuit cases on TSM, 8: VI[C][2] KSR Supreme Court case, 8: VI[C], VI[C][1] Motivation to combine, 8: VI[A], 8: VI[A][1] Obvious to try, 8: VI[C], VI[C][1] Statements by patentee about prior art, 8: VI[E] Teaching away from the combination, 8: VI[D] Teaching suggestion motivation (TSM) test, 8: VI Unexpected results, 8: VI[D] Commonly owned prior art and patent or application, 8: IX Graham factors, 8: IV Enablement, not required, 8: V[C] KSR, U.S. Supreme Court case, 8: II[C], VI[C], VI[C][1]

Motivation to combine, 8: VI[A], 8: VI[A][1] Means-plus-function claims Construing for determining obviousness, 8: X, X[A][1], X[A][2] Construing function for determining obviousness, 8: X[A][2][a] Construing structure for determining obviousness, 8: X[A][2][b] Determination of obviousness of, 8: X[A][3] Prior art Analogous art requirement, 8: V[B] Commonly owned with patent or application, 8: IX Defined by Section 102(b), 8: V[A] Enablement, not required, 8: V[C] Product-by-process claims Claim construction for determining obviousness of, 8: X[B][2] Definition of, 8: X[B][1] Process of, comparing construed claims with prior art, 8: III Objective evidence of non-obviousness (see OBVIOUSNESS, Secondary considerations) Obvious to try, 8: VI[C], VI[C][1] Ordinary skill in the art Generally, 8: VII Determining the level of, 8: VII[A]–[C] Level of, 8: VII Secondary considerations (factors) Generally, 8: VIII, VIII[C] Commercial success, 8: VIII[C][1] Copying by others, 8: VIII[C][4] Failure of others, 8: VIII[C][3] Long-felt or unmet need, 8: VIII[C][3] May not be sufficient to overcome a prima facie case of obviousness, 8: VIII[B] Nexus, 8: VIII[A] Unexpected results, 8: VIII[C][2] Skill in the art (see OBVIOUSNESS, Ordinary skill in the art) Statements by patentee about prior art, 8: VI[E] Teaching away, 8: VI[D] Teaching suggestion motivation (TSM) test, 8: VI TSM test (teaching suggestion motivation test), 8: VI Unexpected results, 8: VI[D]

1019

1020

Subject Matter Index OPINIONS Attorney-client privilege (see ATTORNEY-CLIENT PRIVILEGE OF OPINIONS, WAIVER OF) Competency of (see COMPETENCY OF OPINIONS) Competency of patent noninfringement and invalidity opinions (see COMPETENCY OF OPINIONS) Common interest (see DEFENSIVE DUE DILIGENCE) Common interest agreement (see DEFENSIVE DUE DILIGENCE) Invalidity opinions and evaluations (see INVALIDITY OPINIONS AND EVALUATIONS) Noninfringement (see NONINFRINGEMENT OPINIONS AND EVALUATIONS) Validity opinions and evaluations (see INVALIDITY OPINIONS AND EVALUATIONS) Waiver, attorney-client privilege (see ATTORNEY-CLIENT PRIVILEGE OF OPINIONS, WAIVER OF) Work product (see WORK PRODUCT IMMUNITY OF OPINIONS, WAIVER OF) Work product immunity (see WORK PRODUCT IMMUNITY OF OPINIONS, WAIVER OF) ON SALE (see ANTICIPATION, On sale) OFFER FOR SALE (see ANTICIPATION, On sale) ORANGE BOOK (see ABBREVIATED NEW DRUG APPLICATION (ANDA)) ORDINARY AND CUSTOMARY MEANING OF CLAIM TERMS Generally, 2: IV[C][2], IV[C][2][a]–[b], IV[C][2][b](1)–(3), IV[C][3] Disavowal of claim scope, 2: IV[C][3][b] Disclaimer of claim scope, 2: IV[C][3][b] Patentee as own lexicographer, 2: IV[C][3][a] ORDINARY SKILL IN THE ART (see OBVIOUSNESS) OWNER(S) (see INVENTORSHIP) OWNERSHIP (see INVENTORSHIP)

P PATENT DUE DILIGENCE (see also DEFENSIVE DUE DILIGENCE)

Generally, 11: I; 19: I Acquiring party, viewed from the perspective of, 11: I[A] Acquiring party, procedure for acquiring party (see PATENT DUE DILIGENCE, Procedure for acquiring party) Claim construction, role of, 11: III[A], III[A][1]–[2] Co-inventorship and co-ownership, 11: IV[A]–[B] Co-ownership and co-inventorship, 11: IV[A]–[B] Defensive due diligence (see DEFENSIVE DUE DILIGENCE) Enforceability evaluations and opinions, 11: III[D] Red flags to potential enforceability issues, 11: III[D][1] Evaluations and opinions, role in, 11: I[B] Infringement evaluations and opinions Generally, 11: III[B] Description of technology to be acquired, licensed, or practiced, 11: III[B][1] Claim construction required, 11: III[B][3] Indirect infringement, 11: III[B][4] Literal infringement, 11: III[B][2] Equivalents, infringement under the doctrine of equivalents, 11: III[B][2] Invalidity evaluations and opinions (see PATENT DUE DILIGENCE, Validity evaluations and opinions) Inventorship and ownership, verifying, 11: IV Co-ownership and co-inventorship, 11: IV[A]–[B] Opinions and evaluations, role in, 11: I[B] Procedure for acquiring party Applying four principles of patent opinions and evaluations, 11: III Claim construction, 11: III[A], III[A][1]–[2] Identify all key patents, 11: II Identify all target company patents, 11: II[A] Identify all third party patents, 11: II[B] Infringement evaluations and opinions, 11: III[B] Inventorship and ownership, verifying, 11: IV

Subject Matter Index Ownership and inventorship, verifying, 11: IV Reporting considerations, 11: V Searching for target company patents, 11: II[A][1] Searching for third party patents, 11: II[B][1] Validity evaluations and opinions, 11: III[C] Limiting liability associated with searching, 11: II[C] Reporting considerations, 11: V Formal opinions, 11: V[A][1]–[2] Limiting liability, 11: V[B] Patents and applications brought to the attention of the target company, 11: V[A][3] Writing, what to put in, 11: V Searching for patents, 11: II[A][1], II[B], II[B][1] Independent searching, importance and role of, 11: II[A][1], II[B][1] Limiting liability associated with searching, 11: II[C] Searching for prior art, 11: III[C][5] Independent searching, importance and role of, 11: III[C][5] Limiting liability associated with searching, 11: III[C][6] Acquiring party, procedure for target party (see DEFENSIVE DUE DILIGENCE) Target party, viewed from the perspective of (see DEFENSIVE DUE DILIGENCE) Unenforceability evaluations and opinions, 11: III[D] Red flags to potential enforceability issues, 11: III[D][1] Writing, what to put in, 11: V[A] Formal opinions, 11: V[A][1]–[2] Limiting liability, 11: V[B] Patents and applications brought to the attention of the target company, 11: V[A][3] Validity evaluations and opinions, 11: III[C] Anticipation, 11: III[C][2] Best mode, 11: III[C][2] Claim construction required, 11: III[C][2] Enablement, 11: III[C][2]

Every claim addressed, 11: III[C][3] Searching prior art, 11: III[C][4] Target company patent rights, validity evaluations and opinions of, 11: III[C][1] Written description, 11: III[C][2] PATENT-ELIGIBLE SUBJECT MATTER (35 U.S.C. § 101) Generally, 9: VI Abstract ideas and principles, 9: VI Algorithms, 9: VI Bilski, 9: VI, VI[A] Business methods, 9: VI, VI[A] Laws of nature, 9: VI Two-point test for, 9: VI, VI[A] PATENT MISUSE (see ENFORCEABILITY, Patent misuse) PATENT TERM EXTENSION (see ABBREVIATED NEW DRUG APPLICATION (ANDA)) PATENTABILITY OPINIONS AND EVALUATIONS Generally, 17: I Anticipation, 17: VI[B] Claims, 17: III, V Claim construction, 17: III, V Claiming the invention, 17: V Generally, 17: V Construe claim terms and scope, 17: V[B] Definiteness, 17: V[C] Expressly define claim terms, 17: V[A] Full scope of patentable subject matter, 17: V[D] Co-inventorship, determining and importance of, 17: VIII[A] Determining inventorship, importance of, 17: VIII[A] Double patenting, nonstatutory obvioustype, potential issues with, 17: VIII[B] Invention, importance of definition of, 17: IV Determine full scope of invention, including various embodiments, 17: IV[A] Commercial embodiments, 17: IV[A][2] Scope and nature of invention may be affected by the prior art, 17: IV[A][1] Inventorship, determining and importance of, 17: VIII[A]

1021

1022 Subject Matter Index PATENTABILITY (cont.) Negative statements of patentability, 17: II Nonstatutory obvious-type double patenting, potential issues with, 17: VIII[B] Patentability of new inventions, 17: I Non-statutory subject matter, 17: VI[E] Process of determining patentability, 17: VI Process of determining patentability, reiterative approach, 17: VI, VI[A], VI[A]–[E] Anticipation, 17: VI[B], VI[B][1] Obviousness, 17: VI[C], VI[C][1] Reiterative comparison of construed claims with interpreted prior art and specification, 17: VI[A], VI[A]–[E] Specification-based issues, 17: VI[D], VI[D][1] Strategic patenting, 17: VII, 18: I[B] (see also STRATEGIC PATENTING) Coordinating claimed invention with company’s current and future business goals, 17: VII PATENTS, SECURITY INTERESTS (see SECURITY INTERESTS IN U.S. PATENTS) POST-GRANT PROCEEDINGS Certificates of correction, 20: IV Opinions and evaluations, role of, 20: IV[A] Citation of court decisions, 15: VI; 20: VI Citation of prior art (35 U.S.C. § 301), 15: IV; 20: V Opinions and evaluations, role of, 15: IV[A]; 20: V[A] Coordination of related post-grant proceedings, 15: IV[V] Disclaimer (35 U.S.C. § 253), 20: III Opinions and evaluations related to, 20: III[A] Reexamination (see REEXAMINATION, EX PARTE; REEXAMINATION INTER PARTES) Reissue (see REISSUE) PERFECTION OF SECURITY INTERESTS (see SECURITY INTERESTS IN U.S. PATENTS) PRACTICING THE PRIOR ART Generally, 3: V[C]

PREAMBLE As a claim limitation, 2: IV[H], IV[H][1] PRELIMINARY INJUNCTIONS Generally, 14: IV; 20: IV Avoiding preliminary injunctions, role of opinions in, 14: IV, IV[A]; 20: IV, IV[A] Opinions, role of in avoiding, 14: IV, IV[A]; 20: IV, IV[A] Claim construction, 14: IV[A]; 20: IV[A] Noninfringement, 14: IV[A]; 20: IV[A] Timing of, 14: IV, IV[A] Validity, 14: IV[A]; 20: IV[A] PRINTED PUBLICATION (see ANTICIPATION, Printed publication) PRIOR ART Patents as, enablement presumed, 6: V[C] Printed publication Date of, 6: III Definition of, 6: IV Public accessibility, 6: IV Elements as arranged, for anticipation, 6: IV[C] Enablement of, 6: V, V[A]-[D] Lower standard than enablement for patentability (35 U.S.C. § 112, P 1), 6: V[B] Wands factors, use of, 6: V[A] Single document or event requirement for anticipation, 6: VI, VI[B] PROCESS PATENT AMENDMENTS ACT (35 U.S.C. § 271(g)) Generally, 5: I[E] Historical development, 5: I[E][1] Definition of product made by a process, 5: I[E][2] Definition of materially changed, 5: I[E][3] Materially changed, 5: I[E][3] Product means physical product directly manufactured by a U.S. patented process, 5: I[E][2] PRODUCT-BY-PROCESS CLAIMS Generally, 2: V[G] Construing product-by-process claim terms for infringement, 2: V[G][2], V[G][2][a]–[d]; 3: V[B]2, V[B][2][a]–[d]; 4: III[F], III[F][1]–[2], III[F][2][a]–[d]

Subject Matter Index Construing product-by-process claim terms for validity, 2: V[G][1]; 6: VII[B], VII[B][1]–[2] Infringement under the doctrine of equivalents, 4: III[F], III[F][2], III[F][2][a]–[b] Literal infringement, 3: V[B]2, V[B][2][a]–[d] PUBLIC USE (see ANTICIPATION, Public use)

R REEXAMINATION, EX PARTE Generally, 15: I, II; 21: I, I[A] Opinions and evaluations, role of, 15: II[A]; 21: I[A] REEXAMINATION, INTER PARTES Generally, 15: I, III Opinions and evaluations, role of, 15: III[A] REISSUE Generally, 20: II Broadened reissue, 20: II Opinions and evaluations, role of, 20: II[A] Opinions and evaluations of third party patents in reissue, 20: II[A] Narrowed reissue, 20: II RESEARCH TOOLS Experimental use exemption, research tools, 5: III[A][2] ROCKET DOCKET Generally, role of opinions related to, 14: V; 20: V Jurisdictions, 14: V, V[A]; 20: V, V[A] Preparation for, 14: V, V[A]; 20: V, V[A] Timing, 14: V, V[A] RULE 11 Generally, 14: I; II; 20: I, II Evaluations of third party patents, 14: I, II, II[A]–[B] Evaluations of one’s own patents, 20: II Pre-filing investigations, 14: I, II, II[A]–[B]; 20: I, II, II[A]–[B] Opinions and evaluations, role of, 14: I, II, II[A]–[B]; 20: I, II, II[A]–[B] Claim construction required, 14: II, II[B]; 20: II, II[B] Infringement opinions and evaluations, 14: II[B]; 20: II[B] Invalidity opinions and evaluations, 14: II[B]; 20: II[B]

Sanctions, role of, 14: II[B]; 20: II[B] Sanctions, 14: II[B]; 20: II[B]

S SALE (see ANTICIPATION, On sale) SALE, OFFER FOR (see ANTICIPATION, On sale) SARBANES-OXLEY ACT (see SECURITIES ISSUES (SEC ISSUES)) SCOPE OF PATENT (see CLAIM CONSTRUCTION) SCOPE OF CLAIMS (see CLAIM CONSTRUCTION) SCOPE OF GRANT (see CLAIM CONSTRUCTION) SECONDARY CONSIDERATIONS (FACTORS) (see OBVIOUSNESS, Secondary considerations (factors)) SECTION 285 (35 U.S.C. § 285) Generally, 14: I; II Evaluations of third party patents, 14: I, II, II[A]–[B] Pre-filing investigations, 14: I, II, II[C]–[D] Opinions and evaluations, role of, 14: I, II, II[C]–[D] Claim construction required, 14: II Infringement opinions and evaluations, 14: II Invalidity opinions and evaluations, 14: II Sanctions, relation to, 14: II[D] Sanctions, 14: II[D] SECURITIES ISSUES (SEC ISSUES) Generally, 16: I, II Audits (see SECURITIES ISSUES (SEC ISSUES), Patent audits and SEC compliance) Examples of patent issues and SEC Laws Failure to disclose potentially invalid patent rights, 16: II[B] Misstatements about the status of a patent application: finally rejected and abandoned, 16: II[D] Misstatements about the status of a patent application: pending but not issued, 16: II[C] Misstatements and omissions about a patent attorney’s opinion, 16: II[G] Misstatements and omissions concerning a patent’s claim coverage, 16: II[E]

1023

1024 Subject Matter Index SECURITIES ISSUES (cont.) Misstatements and omissions concerning the status of patent litigation, 16: II[F] Limiting potential securities law applicability and potential liability Bespeaks caution doctrine, 16: II[I] Due diligence defense, 16: II[H] Patent audits and SEC compliance, 16: III, III[A]–[C] Ongoing compliance, considerations for, 16: III[C] Patent rights inventory, 16: III[A] Patent valuation, 16: III[B] Potential liability under U.S. securities laws, 16: II, II[A] Sarbanes-Oxley, 16: II[A], II[A][3], III Securities issues in patent evaluations and opinions, 16: II Potential liability under U.S. securities laws, 16: II, II[A] Sarbanes-Oxley, 16: II[A][3] Sarbanes-Oxley reporting, 16: II[A][3][a] Section 10(b) of The Exchange Act, 16: II[A][2] Section 11(a) of The Exchange Act, 16: II[A][1] SECURITY INTERESTS IN U.S. PATENTS Generally, 22: VI Perfection of security interests in patents, 22: VI Comparison with perfecting security interests in registered U.S. copyrights, 22: VI Filing under Article 9 of the UCC, 22: VI Filing with the U.S. Patent Office, 22: VI SPECIFICATION Claims, relation to, 2: II Enablement (see ENABLEMENT) Written description (see WRITTEN DESCRIPTION) Sufficiency of, (see ENABLEMENT; WRITTEN DESCRIPTION) STRATEGIC PATENTING Generally, 18: I, II, II[B] Claim construction, importance and role of, 18: II, II[A]–[B] Claim scope—infringement evaluations and opinions, 18: III, III[A]–[E] Claim construction, importance and role of, 18: III[B] Definition of potentially infringing subject matter, 18: III[A]

Doctrine of equivalents, infringement under, 18: III[C] Indirect infringement, 18: III[D] Literal infringement, 18: III[C] Reporting considerations, 18: III[E] Commercially important subject matter, 18: I[B], I[B][1] Enforceability evaluations and opinions, 18: V, V[A]–[D] Claim construction, importance and role of, 18: V[A] Every claim, considerations related thereto, 18: V[B] Potential enforceability issues, 18: V[C] Reporting considerations, 18: V[D] Ownership evaluations and opinions, 18: VI, VI[A]–[H] Claim construction, importance and role of, 18: VI[D] Co-inventorship, correcting errors in, 18: VI[H] Co-inventorship, relationship to ownership, 18: VI[A] Co-ownership, importance and effect of, 18: VI[B]–[C] Correcting inventorship errors, 18: VI[H] Correcting split ownership, 18: VI[G] Every claim, considerations related thereto, 18: VI[E] Inventorship, correcting errors in, 18: VI[H] Inventorship, relationship to ownership, 18: VI[A] Ownership, correction spilt ownership, 18: VI[G] Ownership, potential issues and red flags, 18: VI[F] Ownership, relationship to inventorship, 18: VI[A] Patent landscapes, 18: I, I[A], I[A][1]–[5] Issued and enforceable U.S. patents, 18: I[A][1] Commercial technology, 18: I[A][4] Company technology, 18: I[A][4] Potentially patentable subject matter, 18: I[A][3] Prior art and other non-patentable subject matter, 18: I[A][2] Reporting patent landscapes, 18: I[A][5] Strategic use of patent landscapes, 18: I[B][3], I[B][3][a]–[e] Outside patent counsel, use of, 18: I[B][2]

Subject Matter Index Strategic use of patent landscapes, 18: I[B][3], I[B][3][a]–[e] Commercial technology, 18: I[B][3][a] Company technology, 18: I[B][3][a] Identification of owners of technologies, strategic use of, 18: I[B][3][e] Potentially patentable subject matter, 18: I[B][3][c], I[B][3][d] Subject matter potentially free from patent coverage, 18: I[B][3][c] Third party patents, 18: I[B][3][b] Validity evaluations and opinions, 18: IV, IV[A]–[F] Claim construction, importance and role of, 18: IV[A] Consider all possible forms of invalidity, 18: IV[B] Consider every claim in validity evaluations and determinations, 18: IV[C] Prior art searching, 18: IV[D] Prior art searching, limiting liability related thereto, 18: IV[E] Reporting considerations, 18: IV[F] SUPPLYING COMPONENTS IN OR FROM THE U.S. FOR ASSEMBLY ABROAD (see ASSEMBLY ABROAD (35 U.S.C. § 271(f))

T TRANSITIONAL PHRASES Generally, 2: V[J] Comprising (open-ended), 2: V[J][1] Consisting of (closed), 2: V[J][3] Consisting essentially of, 2: V[J][2] Markush, consisting of, 2: V[J][3][a]

U UCC (see SECURITY INTERESTS IN U.S. PATENTS) UNENFORCEABILITY (see ENFORCEABILITY) UNENFORCEABILITY OPINIONS AND EVALUATIONS Generally, 12: I, VI Claim construction required, 12: III, III[A]–[B], VI[A] Every claim, considerations related to, 12: VI[B] Individual claims, need to address, 12: VI[B] Issues of, 12: VI[D] Liability, limiting, 12: VI[E]

Potential weaknesses of opining on patent unenforceability, 10: II; 12: VI[C] Reporting considerations, 12: VI[F] UNIFORM COMMERCIAL CODE (UCC) (see SECURITY INTERESTS IN U.S. PATENTS) UTILITY (see PATENT-ELIGIBLE SUBJECT MATTER (35 U.S.C. § 101))

V VALIDITY (see INVALIDITY) VALIDITY OPINIONS AND EVALUATIONS (see INVALIDITY OPINIONS AND EVALUATIONS)

W WAIVER (see ATTORNEY-CLIENT PRIVILEGE OF OPINIONS, WAIVER OF) WILLFUL INFRINGEMENT, OPINIONS TO AVOID Generally, 13: I Advice of counsel, role of, 13: II[C] Avoidance of, 13: I History of legal requirements of opinions, 13: I Competency of opinions to avoid willful infringement, 23: I A competent opinion need not address both noninfringement and invalidity as long as all claims are addressed, 23: I[L] Claim construction, required, 23: I[D] Invalidity opinions, requirements for, 23: I[K] Level of certainty, not absolute, 23: I[G] Noninfringement opinions, requirements for, 23: I[J] Opinion must not be incompetent on its face (not bald, conclusory, unsupported), 23: I[B] Opinion need not be correct, 23: I[A] Preparer of opinion, must be qualified, 23: I[F] Proper application of law to facts, requirement for, 23: I[E] Review of complete prosecution history of patent, requirement for, 23: I[C] Special concerns for opinions based on unenforceability, 23: I[M] Timing for opinions, 23: I[I] Written opinions, need for, 23: I[H]

1025

1026 Subject Matter Index WILLFUL (cont.) Duty to seek opinion of counsel, 13: III, IV, V Underwater Devices, 13: III Duty of care, 13: III, IV, V Duty to seek opinion of counsel, 13: III Negligence, 13: III Seagate, 13: IV, V Underwater Devices, 13: III Enhanced damages, 13: II, II[A]–[C] Advice of counsel, role of, 13: II[C] Statutory (Section 285, second paragraph; 35 U.S.C. § 285, 2 P.), 13: II[A] Read factors, 13: II[B] Federal Circuit decisions post-Seagate, 13: V History of legal requirements of opinions, 13: I Inducement of infringement, 13: VI, VI[A]–[B] Qualcomm, 13: VI, VI[A]–[B] Need for opinion of counsel, 13: VI, VI[B] Need for opinion of counsel post-Seagate, 13: VI, VI[B] Specific intent, proof of, 13: VI[A] Intent (see WILLFUL INFRINGEMENT, OPINIONS TO AVOID, Inducement of infringement) Necessity of opinion of counsel, 13: I, III, IV, V, VI Inducement of infringement (see WILLFUL INFRINGEMENT, OPINIONS TO AVOID, Inducement of infringement) Need for opinion of counsel, 13: I, III, IV, V, VI Inducement of infringement (see WILLFUL INFRINGEMENT, OPINIONS TO AVOID, Inducement of infringement) Opinions and evaluations for avoidance of, 13: I History of legal requirements of opinions, 13: I Qualcomm (see WILLFUL INFRINGEMENT, OPINIONS TO AVOID, Inducement of infringement) Read factors, enhanced damages, 13: II[B] Recklessness, 13: IV Objective recklessness standard, 13: IV Seagate, 13: IV, V

Reliance on opinions, 23: II Seagate, 13: IV, V Section 285, second paragraph, enhanced damages, (35 U.S.C. § 285, P 2), 13: II[A] Specific intent, (see WILLFUL INFRINGEMENT, OPINIONS TO AVOID, Inducement of infringement) Statutory enhanced damages (Section 285, second paragraph; 35 U.S.C. § 285, P 2), 13: II[A] Underwater Devices, 13: III WORK PRODUCT IMMUNITY OF OPINIONS, WAIVER OF Generally, 24: I, III, III[A], V Waiver of work product immunity when relying on opinion for avoidance of willful infringement, 24: V Importance of maintaining separation between opinion counsel and trial counsel, 24: V[D] No waiver of work product immunity for communications with trial counsel where trial counsel is separate from opinion counsel, 24: V[C] Waiver of work product immunity does not extend to subject matter not communicated to the client, 24: V[B] Work product immunity waiver is more flexible and less broad than waiver of attorney-client privilege, 24: V[A] WRITTEN DESCRIPTION (35 U.S.C. § 112, P 1) Generally, 9: III Enablement, distinguished from written description, 9: III[A] Essential element, no requirement for, 9: III[H] Form of description, 9: III[C] Genus, 9: III[G] Representative number of species, 9: III[G] Obvious from description, 9: III[D] Patent Office Written Description Guidelines, recognition by courts, 9: III[F] Possession requirement, 9: III[B] Filing date, time of, 9: III[B] Necessarily present, 9: III[E] Express, 9: III[E] Inherency, 9: III[E]

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