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Microsoft Is Ordered to Pay $290 Million for Word’s Infringement

August 11, 2009

A federal judge at the U.S. District Court for the Eastern District of Texas on Aug. 11 issued a final judgment ordering Microsoft Corp. to pay a Canadian collaboration software maker $290 million for infringing its document technology patent ( i4i Limited Partnership v. Microsoft Corp., E.D. Tex., No. 07-cv-113, 8/11/09).

Microsoft Word Found Infringing.

i4i Limited Partnership and Infrastructures for Information Inc.(i4i) sued Microsoft Corp. for infringing their patent (5,787,449) covering a system and method for the “separate manipulation of the architecture and content of a document.”

A jury on May 20 entered a verdict for i4i, finding that Microsoft Word 2003 and Microsoft Word 2007 infringed the ’449 patent. Judge Leonard Davis followed the verdict with an Aug. 11 final judgment and permanent injunction.

The final judgment states that ’449 patent is valid and enforceable, and was willfully infringed by Microsoft. It further states that inventor Michel Vulpe did not engage in inequitable conduct in prosecuting the patent and that i4i’s damages award is not barred by laches. The court awarded $200 million in damages, $40 million in enhanced damages for willful infringement, $37 million in prejudgment interest, and post-verdict damages of $144,060 per day counting back to May 21, 2009.

Among other things, the permanent injunction bars Microsoft from selling, offering to sell, and/or importing in or into the United States any infringing and future Word Products that have the capability of opening an “extensible mark‐up language,” or XML file. The injunction becomes effective 60 days from the date of the order.

“We are very pleased with the verdict,” Vulpe said in an i4i press release following the jury ruling. “We feel vindicated with this result,” he added.

Loudon Owen, chairman of the Toronto-based firm, said, “This is an important verdict for i4i, for the inventors and, more generally, for the rights of all patent owners.”

Microsoft issued a short statement saying that it will appeal the verdict.

Read the final judgment and injunctive order.
 

Bayer’s Yazmin Contraceptive Formulation Invalid as `Obvious to Try’

August 5, 2009

The patent held by Bayer Schering Pharma AG for the contraceptive marketed under the brand name Yasmin® is invalid under Section 103 of the Patent Act because a skilled artisan would have found its formulation “obvious to try,” the U.S. Court of Appeals for the Federal Circuit ruled Aug. 5 (Bayer Schering Pharma AG v. Barr Laboratories Inc., Fed. Cir., No. 2008-1282, 8/5/09).

Applying the rationale set forth by the Supreme Court in KSR International Co. v. Teleflex Inc., the court reasoned that the claimed innovative aspects of the invention would have been obvious to a skilled artisan because the prior art limited researchers to a narrow set in the pursuit of a successful contraceptive.

However, Judge Pauline Newman argued in dissent that the “hindsight science of judges” was employed here to find the invention invalid despite the strong evidence of nonobviousness.

Drospirenone Contraceptive Formulation.

Bayer Schering Pharma AG has a patent (6,787,531) on a pharmaceutical composition that uses drospirenone, a progestin that inhibits ovulation, as its active ingredient. Bayer has had huge success in marketing the daily oral contraceptive under the brand name Yasmin®.

Barr Laboratories filed an abbreviated new drug application with the Food and Drug Administration seeking approval to market a generic version of Yasmin®. Bayer responded by filing a patent infringement suit against Barr.

Judge Peter G. Sheridan of the U.S. District Court for the District of New Jersey ruled the patent invalid for obviousness under Section 103 of the Patent Act, 35 U.S.C. § 103.

At trial, Bayer claimed that one innovation was that the drospirenone could be micronized to increase its bioavailability--the amount of the active drug absorbed into the bloodstream and available to act on the body that is high enough to perform its contraceptive function. The second claimed innovation was that the micronized drospirenone would not need to be enteric coated for protection against the highly acidic environment of the stomach.

However, the district court rejected these arguments and ruled under KSR International Co. v. Teleflex Inc., 550 U.S. 398 (2007), that it would have been obvious to a person having ordinary skill in pharmaceutical formulation to try a normal pill in formulating drospirenone as an oral contraceptive.
Bayer appealed.

Limited Number of Solutions in Prior Art.

The district court found that a skilled artisan would have considered the Krause studies of  spirorenone, which is closely related to drospirenone, and found that, though acid-sensitive, it would still absorb into the bloodstream in vivo. It also found that while the Nickisch reference did teach that drospirenone isomerizes in vitro when exposed to acid simulating the human stomach, a person of ordinary skill would be aware of the study’s shortcomings, and would verify whether drospirenone absorbed or isomerized with precise in vivo and in vitro testing as suggested by the Robert Aulton treatise, Pharmaceutrics: The Science of Dosage Form Design.

In its analysis, the Federal Circuit pointed to the following quote from KSR:

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 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.

“This approach is consistent with our methodology in In re O’Farrell,” 853 F.2d 894 (Fed. Cir. 1988), and more recently in In re Kubin , 561 F.3d 1351 (Fed. Cir. 2009), Judge Haldane Robert Mayer stated. O’Farrell, he said, observed that most inventions that are obvious were also obvious to try, but there were two situations where that rule of thumb did not apply: (1) an invention would not have been obvious to try when the inventor would have had to try all possibilities in a field unreduced by direction of the prior art, which is another way to express the KSR prong requiring the field of search to be among a “finite number of identified” solutions; (2) an invention is not obvious to try where vague prior art does not guide an inventor toward a particular solution, which expresses the same idea as the KSR requirement that the identified solutions be “predictable,” Mayer continued.

The appellate court found that the prior art references here would have taken the skilled artisan to a narrow set of choices that would render the claimed invention obvious under KSR.

Mayer explained:

At this point, a person having ordinary skill in the art has reached a crossroads where he must choose between two known options: delivery of micronized drospirenone by a normal pill following the spirorenone analogy in the Krause series, or delivery of drospirenone by an enteric-coated pill following the Nickisch teaching that the drug needs to be protected from the stomach. This is a finite number of identified, predictable solutions. See KSR. 550 U.S. at 421. The prior art would have funneled the formulator toward these two options; he would not have been required to try all possibilities in a field unreduced by the prior art, thus avoiding the first pitfall of O’Farrell,  … Additionally, the prior art was not vague in pointing toward a general approach or area of exploration, but rather guided the formulator precisely to the use of either a normal pill or an enteric-coated pill, thus avoiding the second pitfall of O’Farrell. … Because the selection of micronized drospirenone in a normal pill led to the result anticipated by the Krause series, the invention would have been obvious.

The district court’s obviousness ruling was affirmed.
Senior Judge Daniel M. Friedman joined the opinion.

Dissent: Judges Substituted Hindsight Views for Actual Evidence of the Art.

However, Judge Pauline Newman vigorously dissented, saying that here “[t]he court rules that the scientists should have ‘tried’ that which they believed would fail, and that when they eventually did try this unlikely formulation, and it succeeded, it was obvious to do so.”

Newman continued as follows:

“Obviousness” requires that the subject matter was obvious to persons of ordinary skill in the field of the invention. The law does not hold it “obvious to try” experiments that contravene conventional knowledge, and that are not deemed reasonably likely to succeed. The evidence in this case is a better measure of obviousness than is the hindsight science of judges, for the scientists who eventually made this discovery testified, without dispute, that they did not believe an uncoated micronized product would meet the demanding criteria of contraceptive effectiveness. The Court in KSR International Co. v. Teleflex Inc., 550 U.S. 398 (2007) explained that the standard for “obvious to try” is whether there was a “reasonable expectation of success” at the time. It was undisputed that there was not. It was undisputed that it was not reasonably expected that uncoated micronized drospirenone would be 99+% effective as an oral contraceptive when ingested into the acidic stomach, when it was known to degrade rapidly in acid.
The district court stated that micronization was a “viable” option, and that although success was “uncertain,” the invention was obvious to try. However, “viability” is not the standard. “Viability” implies that the experiment may or may not succeed. What the law requires is not guesswork, not dumb luck, but a reasonable degree of predictability of success. My colleagues depart from the statutory standard, in ruling that persons of ordinary skill would have conducted experiments that were expected to fail. Nothing in the prior art teaches the likelihood of success of ingestion of uncoated micronized drospirenone; what is taught is the likelihood of failure.

The invention must be viewed as a whole. With the existing knowledge that drospirenone is both hydrophobic and that it degrades rapidly in acid, and the existing knowledge that micronization, although useful to counteract a drug’s hydrophobic properties, renders the drug even more susceptible to acid degradation, it was not shown that a person of ordinary skill in this field would have had a reasonable expectation of achieving complete contraceptive bioavailability and effectiveness with uncoated micronized drospirenone. The contrary view has surfaced only in this litigation-induced argument. The exercise of judicial expertise to override the clear evidence of how persons of skill in this field actually behaved, is inappropriate.

Bayer was represented by Peter B. Bensinger Jr. of Bartlit Beck Herman Palenchar & Scott, Chicago, Ill. Barr was represented by George C. Lombardi of Winston & Strawn, Chicago, Ill.

Read the Bayer v. Barr opinion.
Read the KSR opinion.
Read the In re Kubin opinion.
Read the In re O’Farrell opinion.

 

Inequitable Conduct Pleadings Must Detail the `Who, What, When, Where, and How’ of the Alleged Fraud on the PTO

August 4, 2009

In order to plead inequitable conduct in patent cases, the party asserting the charge must specifically identify the “who, what, when, where, and how of the material misrepresentation or omission committed before the PTO,” consistent with Rule 9(b) of the Federal Rules of Civil Procedure, the U.S. Court of Appeals for the Federal Circuit ruled Aug. 4 (Exergen Corp. v. Wal-Mart Stores Inc., Fed. Cir., No. 2006-1491, 8/4/09).

Holding that the infringement defendant failed to meet Rule 9(b)’s “heightened pleading requirement,” the court affirmed the denial of a motion to add the defense and counterclaim that the patentee committed fraud during prosecution at the Patent and Trademark Office. However, the court reversed the ruling that one patent was not invalid and infringed, and reversed the ruling that two other patents were infringed.

Infrared Thermometer Patents.

Exergen Corp. has three patents (5,012,813),  6,047,205, and 6,292,685) related to infrared thermometers for measuring human body temperature. Exergen sued S.A.A.T. Systems Application of Advanced Technology Ltd., Daiwa Products Inc., and others for infringement.

A jury found that SAAT directly infringed Claim 7 of the ’813 patent and Claims 1 and 3-5 of the ’205 patent, and that SAAT actively induced infringement of Claims 1 and 27-30 of the ’685 patent. The jury found each patent willfully infringed, rejected SAAT’s invalidity defenses, and awarded Exergen damages of more than $2.5 million.

The district court denied SAAT’s motions for judgment as a matter of law as to the infringement, validity, and lost profits rulings, and denied its motion to add inequitable conduct as a defense and counterclaim.

SAAT appealed.

Invalidity and Infringement Rulings Reversed.

As to the jury’s finding that Claims 1-5 of the ’205 were not invalid for anticipation under Section 102 of the Patent Act, the court said that Exergen acknowledged that the prior art O’Hara patent disclosed every limitation of Claim 1, except the third step of “electronically detecting the peak radiation from the multiple areas to obtain a peak temperature signal.”

The Federal Circuit went on to find that the jury finding was flawed, citing ample evidence that “O’Hara obtains a peak temperature signal corresponding to a peak radiation detected over the patient’s face, outer ear, and ear canal—i.e., multiple areas of the biological tissue,” and thus “anticipates claim 1.” Although Exergen presented no separate argument as to the validity of dependent claims 2-5, the court went on to rule that “[t]he limitations of those claims are readily found in O’Hara.” The court therefore reversed the jury’s finding that the claims of the ’205 patent are not invalid and infringed.

Next, the court reversed the jury finding of infringement as to Claim 7 of the ’813 patent. It found there could be no infringement of this claim because SAAT’s device possesses a display for providing a reading of oral temperature, not the temperature of the temporal artery beneath the skin of the forehead, as required under the claim construction.

Further, the court reversed the jury finding of induced infringement, concluding that any customer who followed SAAT’s product instructions would not have performed the steps recited in the asserted claims of the ’685 patent and thus would not have directly infringed the patent. “In the absence of direct infringement, SAAT cannot be liable for induced infringement,” Judge Richard Linn stated.

After reversing the invalidity and noninfringement rulings, the court accordingly reversed the damages award.

Rule 9(b) Pleading Requirements Not Met for Inequitable Conduct.

However, the Federal Circuit turned away SAAT’s argument that the district court abused its discretion in refusing to allow the company to add inequitable conduct as an affirmative defense and counterclaim against the ’813 and ’685 patents. To Linn, the lower court “correctly held that SAAT’s proposed allegations of inequitable conduct failed to satisfy the heightened pleading requirement of Federal Rule of Civil Procedure 9(b).”

Rule 9(b) requires that “[i]n all averments of fraud or mistake, the circumstances constituting fraud or mistake shall be stated with particularity.” 

Applying its own law, not the law of the regional circuit, to the unique patent question of whether inequitable conduct has been pleaded with particularity under Rule 9(b), the court quoted authority stating that “inequitable conduct, while a broader concept than fraud, must be pled with particularity” under this rule. Ferguson Beauregard/Logic Controls Div. of Dover Resources Inc. v. Mega Sys. LLC, 350 F.3d 1327 (Fed. Cir. 2003). “A pleading that simply avers the substantive elements of inequitable conduct, without setting forth the particularized factual bases for the allegation, does not satisfy Rule 9(b),” Linn continued, citing King Auto. Inc. v. Speedy Muffler King Inc., 667 F.2d 1008, (CCPA 1981).

Citing cases that include its own ruling in Central Admixture Pharmacy Servs. Inc. v. Advanced Cardiac Solutions P.C., 482 F.3d 1347 (Fed. Cir. 2007) and the Seventh Circuit’s ruling in DiLeo v. Ernst & Young, 901 F.2d 624 (7th Cir. 1990), the Federal Circuit stated:

For example, in a case where inequitable conduct was alleged on the basis that an applicant “failed to disclose all the relevant prior art known to it,” we found this allegation deficient because it did not identify the specific prior art that was allegedly known to the applicant and not disclosed. … In that case, the accused infringer also alleged that the applicant “sought to mislead the [PTO] regarding the relationship between the claimed invention and the prior art” “by manipulation of various measurements and units.” … This pleading, too, was deficient because it failed to identify “what ‘measurements and units’ were manipulated, or how that manipulation was meant to mislead the PTO.” … As the Seventh Circuit has held, the “circumstances” in Rule 9(b) must be set forth with “particularity,” i.e., they “must be pleaded in detail”—“[t]his means the who, what, when, where, and how” of the alleged fraud. … Based on the foregoing, and following the lead of the Seventh Circuit in fraud cases, we hold that in pleading inequitable conduct in patent cases, Rule 9(b) requires identification of the specific who, what, when, where, and how of the material misrepresentation or omission committed before the PTO. …

In sum, to plead the “circumstances” of inequitable conduct with the requisite “particularity” under Rule 9(b), the pleading must identify the specific who, what, when, where, and how of the material misrepresentation or omission committed before the PTO. Moreover, although “knowledge” and “intent” may be averred generally, a pleading of inequitable conduct under Rule 9(b) must include sufficient allegations of underlying facts from which a court may reasonably infer that a specific individual (1) knew of the withheld material information or of the falsity of the material misrepresentation, and (2) withheld or misrepresented this information with a specific intent to deceive the PTO.

Looking to the facts of this case, Linn pointed to several holes in the pleading offered by SAAT:

  •  
    • “The Who” – While SAAT generally references conduct by “Exergen, its agents and/or attorneys,” nothing identified “who” made  material omissions and misrepresentation to the PTO.
    • The “What” and “Where” – SSAT’s pleading also fails to identify which claims, and which limitations in those claims, the withheld references are relevant to, and where in those references the material information is found—i.e., the “what” and “where” of the material omissions.
    • The “Why” and “How” – SAAT’s pleading generally states that the withheld references are “material” and “not cumulative to the information already of record,” but does not identify the particular claim limitations, or combination of claim limitations, that are supposedly absent from the information of record. Such allegations are necessary to explain both “why” the withheld information is material and not cumulative, and “how” an examiner would have used this information in assessing the patentability of the claims, Linn said.

Beyond these factual deficiencies, “which themselves are fatal under Rule 9(b),” Linn said nothing alleged here could give rise to a reasonable inference of scienter, including both (1) knowledge of the withheld material information or of the falsity of the material misrepresentation, and (2) specific intent to deceive the PTO.

The district court’s ruling was reversed as to the invalidity and noninfringement rulings, but affirmed as to the denial of SAAT’s motion for leave to allege inequitable conduct.

The opinion was joined by Chief Judge Paul R. Michel and Judge Amy J. St. Eve of the U.S. District Court for the Northern District of Illinois, sitting by designation.

Heidi E. Harvey, Fish & Richardson, Boston, argued for Exergen. Peter M. Midgley, Jr. of Zarian Midgley & Johnson, Boise, Idaho, argued for SAAT and Daiwa.

Read the Exergen Corp. v. Wal-Mart Stores Inc. opinion.
 

Act of Filing U.S. Patent Application Subjects Canadian Law Firm To Personal Jurisdiction in Malpractice Case in Virginia Federal Court

August 3, 2009

Allowing a Virginia federal district court to assert personal jurisdiction over a Canadian law firm charged with patent law malpractice in Virginia based on its filing of the patent in the United States Patent and Trademark Office does not offend traditional notions of “fair play and substantial justice,” the U.S. Court of Appeals for the Federal Circuit held Aug. 3 (Touchcom Inc. v. Bereskin & Parr, Fed. Cir., No. 2008-1229, 8/3/09).

Malpractice Suits Follows Invalidity Finding.

Touchcom Inc. is the assignee of a U.S. patent 5,027,282 claiming an interactive pump system, which was issued to Peter Hollidge of Ontario, Canada. A Texas federal district court in Touchcom Inc. v. Dresser Inc., 427 F. Supp. 2d 730 (E.D. Tex. 2005), found the ’282 patent invalid for indefiniteness due to the omission of the invention’s source code—a key element that was included in Hollidge’s Canadian patent application.

Touchcom later filed this malpractice suit against the Canadian law firm of Bereskin & Parr and law partner Samuel Frost (B&P). However, Senior Judge James C. Cacheris of the U.S. District Court for the Eastern District of Virginia dismissed the suit against B&P for lack of personal jurisdiction.

Touchcom appealed.

Jurisdiction Comports With `Fair Play and Substantial Justice.’

Judge Alan D. Lourie began by noting that this case raises an issue “first impression”—“whether the act of filing an application for a U.S. patent at the USPTO is sufficient to subject the filing attorney to personal jurisdiction in a malpractice claim that is based upon that filing and is brought in federal court.”

In resolving this issue, Lourie said that because the district court decided B&P’s pretrial personal jurisdiction motion without conducting a hearing, Touchcom only had to make a prima facie showing that the district court had personal jurisdiction over the law firm in order to succeed on appeal. He further noted that Touchcom did not appeal the district court’s conclusion that general jurisdiction was lacking since it was clear that B&P did not have “continuous and systematic” contacts with the forum state.

In its specific jurisdiction analysis, the court looked at whether there was personal jurisdiction under Fed.R.Civ.P. Rule 4(k)(2), which is titled “Federal Claim Outside State-Court Jurisdiction.” This rule allows jurisdiction over a defendant when process has been served and three requirements are met: “(1) the plaintiff’s claim arises under federal law, (2) the defendant is not subject to jurisdiction in any state’s courts of general jurisdiction, and (3) the exercise of jurisdiction comports with due process.”  
The first element was satisfied since Touchcom’s malpractice suit involved resolving a substantial question of federal patent law. As to the second element, the Federal Circuit found that B&P was not subject to Virginia’s courts of general jurisdiction, and that the firm did not identify another state in which it would be subject to jurisdiction. It concluded that, for purposes of Rule 4(k)(2), Touchcom made a prima facie showing that the firm was not subject to the jurisdiction of any state’s courts of general jurisdiction.

As to the third element, comporting with due process, the court said that it had to consider the inquiry consistent with International Shoe Co. v. Washington, 326 U.S. 310 (1945), which first examines whether B& P purposefully directed its activities at parties in the United States and thus had “minimum contacts” sufficient to satisfy due process. “It stands to reason that one who has sought and obtained a property interest from a U.S. agency has purposefully availed itself of the laws of the United States,” Lourie said, noting that B&P and Frost entered into an agreement to obtain U.S. patent protection for Touchcom, became registered patent agents, and submitted documents to the USPTO. Next, the appellate court found that Touchcom’s claim arose from B&P’s contacts with the United States because Touchcom’s claims charge that the firm filed an allegedly deficient U.S. patent application.

Finally, the court decided under International Shoe that the assertion of personal jurisdiction was reasonable and fair. Determining that the exercise of jurisdiction here comports with “fair play and substantial justice,” the court applied the five factors set forth in Burger King Corp. v. Rudzewicz, 471 U.S. 462 (1985), and examined: “(1) the burden on the defendant, (2) the forum’s interest in adjudicating the dispute, (3) the plaintiff’s interest in obtaining convenient and effective relief, (4) the interstate judicial system’s interest in obtaining the most efficient resolution of controversies, and (5) the shared interest of the states in furthering fundamental substantive policies.”
As to the first factor, the court said that it would not be unduly burdensome for B&P to have to travel 500 miles from Toronto to defend the suit in Virginia. Quoting Synthes (U.S.A.) v. G.M. dos Reis Jr. Ind. Com. de Equip. Medico, 563 F.3d 1285 (Fed. Cir. 2009), he pointed out that requiring a Brazilian defendant to travel to the United States from Brazil in order to defend against a patent infringement suit was held “not unduly burdensome.” Citing the relatively short travel time in this case and B&P’s apparent familiarity with the U.S. legal system, Lourie found the burden in defending this case in the United States “minimal.”

On the second factor, Lourie found that the United States has an interest in regulating malpractice occurring at the USPTO regardless of the nationalities, and that it also “has a legitimate interest in providing an adjudicatory forum for claims of malpractice occurring before its federal agencies.” He found that the third factor was neutral since both U.S. and Canadian courts could equally provide the relief sought by Touchcom. “The fourth and fifth factors, to the extent they apply, do not convince us that exercising jurisdiction over appellees would violate notions of fair play and substantial justice,” he added, finding that these factors favored neither party. The court concluded that the exercise of personal jurisdiction over B&P in this case would not offend traditional notions of fair play and substantial justice.

Finally, B&P alternatively sought dismissal under Fed.R.Civ.P. Rule 12(b)(6), arguing that Virginia’s three-year statute of limitations barred Touchcom’s claim.
“Because the district court did not decide that issue, we remand the case for the court to rule on that issue in the first instance,” Lourie stated.

The Federal Circuit reversed the dismissal and remanded the case.

The opinion was joined by Judge Arthur J. Gajarsa.

Prost Does Not Find U.S. Interests Here Superior.

In her dissenting opinion, Judge Sharon Prost quoted the warning in Asahi Metal Indus. Co. v. Super. Ct. of Cal., 480 U.S. 102 (1987), that “[g]reat care and reserve should be exercised when extending our notions of personal jurisdiction into the international field.” Criticizing the majority’s Burger King analysis, she first disputed the point that subjecting B&P to suit in the U.S. would impose only a “minimal” burden. Regardless of ease of travel, “[t]he unique burdens placed upon one who must defend oneself in a foreign legal system should have significant weight in assessing the reasonableness of stretching the long arm of personal jurisdiction over national borders,” she said, again quoting Asahi.  Further, Prost noted that that B&P’s ability to prosecute patents before the USPTO cannot be fairly compared to its skill in defending a malpractice action in foreign country. Prost added that since neither Touchcom nor B&P is a citizen of the United States, “the United States can claim no interest in protecting its own citizens from negligent representation before the USPTO.”

Prost continued as follows:

In this case, the alleged malpractice consists of the Appellees’ act of submitting a patent application to the USPTO that could not result in the issuance of a valid patent because it lacked the source code necessary to satisfy the definiteness requirement of 35 U.S.C. § 112. In my view, the United States’ interest in discouraging this type of negligence by omission is adequately protected by the USPTO’s authority to reject claims that suffer from this type of defect. … Additionally, USPTO regulations provide for discipline of attorneys who do not represent their clients competently. … While it is regrettable that the USPTO issued an invalid patent to Touchcom, opening our courts to this lawsuit will contribute little to the United States’ existing ability to encourage patent attorneys and agents to submit proper applications to the USPTO.

Touchcom was represented by Sheron Korpus of Kasowitz, Benson, Torres & Friedman, New York, N.Y. Frost and Bereskin & Parr were represented by G. Luke Ashley of Thompson & Knight, Dallas, Tex.

Read the entire Touchcom Inc. v. Bereskin & Parr case.
 

Federal Circuit Reverses PTO’s Invalidity Ruling on Tampon Patent

July 31, 2009

The Board of Patent and Appeals and Interferences’s decision that a tampon patent was anticipated by prior art is reversed because it lacks substantial evidence, the U.S. Court of Appeals for the Federal Circuit ruled July 31 (In re McNeil-PPC Inc., Fed. Cir., No. 2008-1546, 7/31/09).

Tampon Patent Found Invalid.

McNeil-PPC Inc. has a patent 6,310,269, for a tampon with a solid fiber core in which the core is denser than the radially projecting “ribs” and the ribs are narrower at their bases than their distal ends.

McNeil requested reexamination by the Patent and Trademark Office based on an unexamined Japanese application by Tetsu Sasaki. Citing Sasaki, the examiner patent rejected Claims 1 and 3 as anticipated under 35 U.S.C §102 and Claim 4 as obvious under 35 U.S.C. §103. The Board of Patent Appeals and Interferences affirmed the examiner's rejection.

McNeil filed a notice of appeal on August 1, 2008. However, the PTO director responded that the appeal was untimely filed more than 60 days after the board’s final decision on May 30, 2008.

Testimony on PTO Procedures Shows 60-Day Appeal Deadline Was Met.

As an initial matter, the Federal Circuit addressed the timeliness of McNeil’s appeal.

The court noted different dates in the record. "May 30, 2008" is the typed date on the face of the board order denying McNeil's request for rehearing; however, the mailing sheet for that order is dated June 2, 2008. The online “Transaction History” for the reexam has two entries for May 30, 2008 as the date of the reconsideration denials, but the image file wrapper (IFW), also available online, lists the “Mail Room Date” of the decision as June 2, 2008.

In resolving which date was 60 days from “the date of the decision” under 35 U.S.C. § 142 and 37 C.F.R. § 1.304(a)(1), Chief Judge Paul R. Michel noted that the PTO director did not explain the board’s internal procedure for issuing opinions or whether the June 2, 2008 mailing date reflects the first time the decision was released to the public.

However, he said that McNeil provided testimony from a now-retired board member (Jeffrey Nase) who had been with the PTO since 1973. Historically, the date the PTO mailed a document was the date that triggered any response period, Nase asserted. While it is unclear why the opinion says "Decided: May 30, 2008" but was not mailed until June 2, Nase said that perhaps the mail room was slow, or perhaps one of the members of the board panel decided to revise the opinion or reconsider it over the weekend of May 31 and June 1, 2008.

Noting that the PTO did not challenge Nase’s testimony, Michel was persuaded by this showing. “Based on the evidence before us, it appears that only when an opinion is released to the public (or at least the parties) is it truly decided—until then, it is possible for the Board to decide to revise it,” he stated.
Michel continued as follows:

Because the "Transaction History" page appears inaccurate, and because Nase's declaration provides the most plausible explanation for the conflicting evidence of when the Board took action on McNeil's request for reconsideration and is corroborated by the IFW entry, we find that the Board issued its decision on McNeil's request on June 2, 2008, and that the Board therefore decided this case on June 2, 2008, not May 30. McNeil's appeal is therefore timely.

Invalidity Ruling Lacks Evidentiary Support.

Turning to the board’s invalidity finding, the court looked for supporting substantial evidence that Sasaki disclosed the claimed features from representative Claim 1 of the ’269 patent. However, it found such support lacking.

Michel found no substantial evidence, “indeed, no evidence,” of Sasaki disclosing ribs "compressed less than the fiber core" or "a generally cylindrical compressed, solid fibre core," as required in Claim 1 of the ’269 patent. While the ’269 patent also requires ribs “having a coarser capillary structure than the fibre core,” he said that the illustrations in Sasaki  “completely lack any indication of the relative coarseness of different portions.” Claim 1 further requires ribs separated “by an amount greater than such rib is separated from an adjacent longitudinal rib proximate the distal end.”  Michel acknowledged some space between the ribs in Sasaki. “However, because it is neither clear that Sasaki discloses a core nor which portions of Sasaki's tampon the Board considered to be the ribs and which the Board considered to be the core, we cannot say that substantial evidence supports the Board's determination that Sasaki discloses ribs separated from each other `at the proximal end by an amount greater than’ than at `the distal end,’” he wrote.

The board's rejection of Claim 1 for anticipation was reversed. Since Claims 1, 3, and 4 stood or fell together, the rejections of Claims 3 and 4 were also reversed.

The opinion was joined by Judge Randall R. Rader. 

In a dissenting opinion, Timothy B. Dyk argued that the court lacked jurisdiction because McNeil’s appeal was untimely. He said that the majority’s view that the date of mailing is “date of decision” is contrary to the statute, the regulation, and the rulings in Burton v. Bentley, 14 App. D.C. 471 (C.A.D.C. 1899), and In re Reese, 359 F.2d 462 (CCPA 1966).

Dianne B. Elderkin of Woodcock Washburn, Philadelphia, Pa., represented McNeil.
Christina J. Hieber, associate solicitor, represented the Patent and Trademark Office, Alexandria, Va.

Read the entire In re McNeil opinion.
 

Accused Device Does Not Infringe Traffic Pattern Detection System

July 29, 2009

A patented traffic pattern detection system is not infringed literally or under the doctrine of equivalents because the accused device does not perform the required step of “defining . . . traffic lanes”, the U.S. Court of Appeals for the Federal Circuit ruled July 29 (Wavetronix LLC v. EIS Electronic Integrated Systems, Fed. Cir., No. 2008-1129, 7/29/09)
           
Traffic Pattern Detection.

Wavetronix LLC  has a patent entitled “System and Method for Identification of Traffic Lane Positions.” Wavetronix brought this patent infringement action against EIS Electronic Integrated Systems, charging that EIS’s Remote Traffic Microwave Sensor (RTMS) X3 monitoring device infringes one independent claim and several dependent claims of the ’916 patent, literally or under the doctrine of equivalents.

Wavetronix appealed the summary judgment of noninfringement granted by Senior Judge Bruce Jenkins of the U.S. District Court for the District of Utah.
The appellate court upheld the noninfringement ruling.

Judge Marilyn Hall Patel of the U.S. District Court for the Northern District of California, sitting by designation, authored the opinion.

 Claim Construed for First Time on Appeal. 
The ’916 patent is directed to a method of performing the initial step of “teaching” a monitoring device the location of the traffic lanes on a given thoroughfare using detection and observation of actual automobile traffic. The district court did not explicitly construe the “probability density function estimation” (PDFE) that is recited in steps (b) and (c) of Claim 1, so the parties asked the appellate court to construe the term.

“[W]e generally refuse to construe claims in the first instance,” Patel said, citing several cases. However, she found that it was appropriate to do so here because since “the district court’s views on the matter have been exhausted,” the parties agreed to the claim construction, and the record is sufficiently developed such that a claim construction could be reached without prejudice to either party.

In construing the PDFE limitation, the court noted that the claim language provided little guidance and that while the specification gave some guidance, its references to PDFE were sometimes inconsistent. “Nowhere does the patent set forth an explicit definition of PDFE,” Patel said. Still, she noted that all of the embodiments in the specification show a comparison of the number of vehicles or vehicle detections across a range. “This ability to compare the data across a range is significant, because it provides information not only about where vehicles are but where they are not—i.e., where traffic lanes begin and end,” Patel stated.

The court went on to construe PDFE as “a finite data set large enough to approximate a function of a continuous variable whose integral over a region gives the probability that a random variable falls within the region.”  Properly construed, PDFE “requires a representation of vehicle frequencies across a range of positions with sufficient detail to provide meaningful information about where traffic lanes begin and end,” it wrote.

Given Construction, No Literal or Equivalents Infringement.

Focusing its infringement analysis on the (“defining . . . traffic lanes . . . from said [PDFE]”) language in step (c) of Claim 1, the court found that the accused RTMS X3 Setup Wizard cannot literally infringe the ‘916 patent. It concluded that the accused system does not involve comparisons across lanes using “peaks” ” representing lane centers and “valleys” representing lane boundaries or any similar method. In the RTMS X3 system, there is only one value per lane, not lane centers or boundaries, the court explained.
After holding as a matter of law that the RTMS X3 does not practice the “defining . . . traffic lanes” step of Claim 1 for purposes of literal infringement, the court went on to also hold as a matter of law that there was no infringement under the doctrine of equivalents. 

The district court’s ruling was affirmed.

The opinion was joined by Judges Pauline Newman and Alvin A. Schall.

Wavetronix was represented by Brent P. Lorimer of Workman Nydegger, Salt Lake City, Utah. EIS was represented by Richard D. Rochford of Nixon Peabody, Rochester, New York.

Read the entire Wavetronix v. EIS Electronic Integrated Systems opinion.
 

“HOTELS.COM” Is Generic Term for Hotel Information And Reservations, Cannot Be Registered as Trademark or Service Mark

July 23, 2009

The U.S. Court of Appeals for the Federal Circuit ruled July 23 that “HOTELS.COM” is a generic term for hotel information and reservations that is not registrable as a trademark or service mark (In re Hotels.com, Fed. Cir., No. 2008-1429, 7/23/09). Affirming a ruling by the Trademark Trial and Appeal Board, the court said that there was substantial evidence to support the board’s determination.

Registration Refused.

Hotels.com L.P. applied to register the service mark “HOTELS.COM” in Class 43, for the services of “providing information for others about temporary lodging; travel agency services, namely, making reservations and bookings for temporary lodging for others by means of telephone and the global computer network.”

The trademark examiner denied registration on the ground that “HOTELS.COM” is merely descriptive of hotel reservation services, and that the applicant’s evidence was insufficient to show acquired distinctiveness under Section 2(f) of the Trademark Act, 15 U.S.C. §1052(f). The examiner also stated that the proposed mark appeared to be generic.

The TTAB affirmed the rejection, but on the ground that “HOTELS.COM” is a generic term for hotel information and reservations. In re Hotels.com, L.P., (T.T.A.B. Mar. 24, 2008).

Hotels.com appealed.

Describing or Naming a Thing?

Noting that the PTO must prove clear evidence of a mark’s genericness, the appellate court pointed out that the question of whether a mark is generic is a question of fact. As rulings of PTO tribunals are reviewed in accordance with the standards of the Administrative Procedure Act under Dickinson v. Zurko, 527 U.S. 150 (1999), “[w]e give plenary review to the TTAB’s legal conclusions, and review its factual findings to determine whether they are arbitrary, capricious, or unsupported by substantial evidence,” Judge Pauline Newman observed.

While “descriptive terms describe a thing” and may acquire distinctiveness and serve as a trademark, “generic terms name the thing” and cannot be a trademark or service mark, Newman continued, quoting McCarthy on Trademarks and Unfair Competition. The difference “is only a fine line between describing and naming,” Newman said, again quoting McCarthy on Trademarks.

“.COM” Suffix Is No Help to a Generic Mark.

Hotels.com insisted that its mark is not generic because its website does not provide lodging and meals for users and thus is not synonymous with the word “hotel.” The company faulted the TTAB for analyzing the term “hotels” separately from the “.com” suffix since the dot-com domain name is a significant aspect of the context of the “HOTELS.COM” mark negating genericness.

Newman was unpersuaded. “Otherwise registrable marks do not acquire generic character by participating in electronic commerce; for as the TTAB pointed out, registrability does not depend on the .com combination,” she stated. Agreeing with the TTAB, Newman said that “the generic term ‘hotels’ did not lose its generic character by placement in the domain name HOTELS.COM.” In reaching this conclusion, the court pointed to authority holding the compound term “SCREENWIPE” generic as applied to wipes for cleaning monitor screens, In re Gould Paper Corp., 834 F.2d 1017 (Fed. Cir. 1987).  Further, the court cited its recent holding in In re Reed Elsevier Props., Inc., 482 F.3d 1376 (Fed. Cir. 2007) that “LAWYERS.COM” is generic for services provided by lawyers.

Substantial Evidence of Genericness.

The court found that there was indeed substantial evidence to support the TTAB’s decision, first noting that the TTAB looked to dictionary, encyclopedia, and thesaurus definitions show that “hotels” and “.com” name the services provided, respectively, temporary lodging and commercial online services. The court continued by stating:
The TTAB also discussed printouts from various websites providing information about hotels and reservations, as showing that such sites are referred to as “hotel information sites” and “hotel reservation sites.” The TTAB listed several sites that combine “hotels” and “.com,” including www.all-hotels.com (“Hotels, travel, discount hotels—reservations and lodgings”); www.web-hotels.com (“hotel reservations and bookings”); www.dealsonhotels.com (“Low Internet Hotel Rates Guaranteed”); www.123-hotels.com (“Hotel Reservation Site”); www.my-discount-hotels.com (“online discount hotel reservation websites”); www.choicehotels.com (“Hotel Rooms, Accommodations, Discounted Hotel Rates, Motels”); www.hotelstravel.com (“Hotels and Travel on the Net”); and www.hotelres.com (“Hotel Reservations—San Francisco and Silicon Valley Reservations”).

The TTAB found that hotels are the “focus” of the applicant’s services, citing the applicant’s advertisements to “[c]hoose from thousands of hotels in hundreds of cities worldwide” by visiting www.hotels.com; directing the public to “[b]ook online at www.hotels.com” and stating that “hotels.com enables you to quickly and efficiently compare accommodations by: price, quality, location . . . amenities, availability . . . .” … The TTAB found that the word “hotels” “names a key aspect of applicant’s services, i.e., that aspect of applicant’s information services and reservation services that deal with hotels,” and concluded that HOTELS.COM is properly viewed in the same way and having the same meaning as the word “hotels” by itself. … The TTAB found that the composite term HOTELS.COM communicates no more than the common meanings of the individual components, that is, that the applicant operates a commercial website via the internet, that provides information about hotels, but adds nothing as an indication of source. …The TTAB concluded that the combination of HOTELS and .COM does not produce a new meaning in combination. …
The TTAB also cited the use of the components of the term “hotels.com” in various domain names, as in www.all-hotels.com, www.web-hotels.com, www.my-discount-hotels.com, and other websites that provide hotel information and reservation services. The TTAB found “[i]t is clear from the website and promotional materials of applicant as well as the websites of third-parties that consumers who are interested in finding information about hotels or making reservations at hotels, would immediately understand that HOTELS.COM identifies a website that provides such services.” … The TTAB further found that “this evidence demonstrates a competitive need for others to use as part of their own domain names and trademarks, the term that applicant is attempting to register,” and included this finding as support for its conclusion that “hotels” indicates the genus of hotel information and reservation services. Id. This evidence supports a prima facie case of genericness.

Survey Evidence Unpersuasive.

Hotels.com tried to rebut this evidence with surveys showing that “HOTELS.COM” is perceived by the relevant public not as referring to a class or category of the services recited in the Appellant’s application, but, rather, as referring to a brand of such services originating from one and only one source. However, the court agreed with the TTAB that the survey evidence was weak. While the surveys purported to show that 76 percent of respondents found HOTELS.com to be a brand name, Newman cited the TTAB’s point that the framing of the survey questions heavily skewed the results in the applicant’s favor. Further, she noted that the TTAB criticized the surveys for failing to indicate the difference between a brand name and a domain name.

The court concluded that “hotels” and “.com” in combination have a meaning identical to the common meaning of the separate components, and that the mark “HOTELS.COM” is generic.

The TTAB’s ruling was affirmed.

The opinion was joined by Chief Judge Paul R. Michel and Judge Arthur Gajarsa.
Gary D. Krugman of Sughrue Mion, Washington, D.C., represented Hotels.com.
Raymond T. Chen, Solicitor, argued for the Patent and Trademark Office.

Read the entire In re Hotels.com opinion.
 

CAFC Agrees With University of Pittsburgh That Only Two Researchers Listed on Patent Were Inventors

July 23, 2009

The University of Pittsburgh was correctly granted a motion for misjoinder under Section 256 of the Patent Act because it provided clear and convincing evidence that only two researchers listed on its patent relating to fat-derived stem cells were joint inventors of all the allowed patent claims, the U.S. Court of Appeals for the Federal Circuit ruled July 23 (University of Pittsburgh of the Commonwealth System of Higher Education v. Hedrick,  Fed. Cir., No. 2008-1468, 7/23/09).

Adipose-Derived Stem Cells.

Adam Katz and Ramon Llull are University of Pittsburgh researchers who in 1996 began work on adipose (fat) tissue in humans. Katz and Llull found that certain adipose cells called adipocytes could ``transdifferentiate’’ into lineages other cells, including bone, cartilage, and muscle.

Katz and Llull continued their work and were joined in the lab by Marc Hedrick, who came to the university in July of 1997 for a yearlong fellowship. In June of 1998, Hedrick’s fellowship ended, and he returned to the University of California at Los Angeles, where he formed the Regenerative Bioengineering and Research (REBAR) laboratory with Prosper Benhaim and Hermann Lorenz. There, Hedrick and his colleagues worked on the same populations of adipose-derived cells as Katz and Llull were using at Pittsburgh. Min Zhu would join REBAR in June 1999.

In 2000, Pittsburgh filed an international patent application covering fat-derived stem cells that would issue as U.S. Patent No. 6,777,231, The patent listed seven named inventors--Katz, Llull, Hedrick, Benhaim, Lorenz, Zhu, and William Futrell.

However, Pittsburgh later brought this suit for misjoinder under 35 U.S.C. § 256, seeking the removal of all named inventors except Katz and Llull. After Futrell voluntarily dismissed himself from the suit, only the REBAR researchers remained as defendants.

After Senior Judge Consuelo B. Marshall of the U.S. District Court for the Central District of California ruled in favor of Pittsburgh, the REBAR researchers appealed.
 
Conception by Only Two Inventors.

Construing the claim language de novo, the Federal Circuit first agreed with the district court’s reading of the term “adipose-derived” as meaning simply “derived from fat tissue.”

Reviewing de novo the question of inventorship as well, the appellate court found that Pittsburgh produced clear and convincing evidence that the REBAR researchers were not joint inventors of the claimed invention.

Conception, the touchstone of inventorship under 35 U.S.C. § 116, is “the formation in the mind of the inventor, of a definite and permanent idea of the complete and operative invention, as it is hereafter to be applied in practice,” Judge Haldane Robert Mayer began, quoting Burroughs Wellcome Co. v. Barr Labs., Inc., 40 F.3d 1223 (Fed. Cir. 1994).  The conception test asks whether the inventor had an idea that was definite and permanent enough that one skilled in the art could understand the invention, with proof of conception being corroborated by evidence, preferably through contemporaneous disclosures, Mayer continued, again citing Burroughs. Then pointing to Price v. Symsek, 988 F.2d 1188 (Fed. Cir. 1993), Mayer said that an inventor need not know that his invention will work for conception to be complete, but need only show that he had the complete mental picture and could describe it with particularity, since the discovery that the invention actually works is part of its reduction to practice. Further, he noted that each joint inventor must contribute to the joint arrival at a definite and permanent idea of the invention as it will be used in practice.

Considering all of these principles, the appellate court concluded that only Katz and Lull were joint inventors of all 10 claims of the ’231 patent. Mayer stated as follows:
The district court correctly applied this law, finding clear and convincing evidence that Katz and Llull conceived of each claim of the invention through contemporaneous corroboration before the arrival of Hedrick at Pittsburgh in July 1997. It found that they had recorded that their cells could transdifferentiate into multiple mesodermal lineages including bone, cartilage, fat and muscle in laboratory notebooks, letters, a January 1997 invention disclosure for their Auto-Cell Separator, the February 1997 document “What’s So Great About Fat?,” and the inference that Katz would have only conducted his muscle induction experiment on the cells to confirm his belief that they could differentiate into muscle instead of adipocytes. They had recorded that their isolated cells transdifferentiated into cells resembling a nerve cell in April 1997, as was recorded in a letter to a colleague requesting his help with electrophysiological techniques. While not scientifically certain that they were observing a nerve cell, they did have the firm and definite idea that nerve cells were present, and ordered further confirming tests. Claims 1, 2, 3, and 4 require an isolated adipose-derived stem cell that can differentiate into two or more mesodermal phenotypes, including specifically a fat cell, a bone cell, a cartilage cell, a nerve cell, a muscle cell, or a combination of these. Thus, the entire invention as described by claims 1, 2, 3, and 4 had been conceived and corroborated through these disclosures.

The district court found that conception of a substantially homogeneous population of the cells as required by claim 5 was satisfied by a September 1997 grant proposal describing efficiently harvesting and isolating these cells. While this writing was dated after Hedrick arrived at Pittsburgh, it does not mention Hedrick among the many other collaborators.

The district court also found that Katz and Llull grasped that their cells could self-renew as he recorded on March 20, 1997, satisfying the requirements added in claim 6. The court found that those skilled in the field at that time knew of no examples of stem cells that could not self-renew for at least 15 passages as the claim requires. Finally, the court found that Katz and Llull had the firm and definite idea that the cells were human, could be genetically modified, secreted hormones, and contained cell-surface bound intracellular signaling moieties by April 1997 as these properties were known at the time to scientists in the field. Thus, they had conceived of the cells with the qualities required by claims 7, 8, 9, and 10, completing conception of the entire claimed invention.

The district court’s ruling was affirmed.

Mayer’s opinion was joined by Judges Randall R. Rader and William C. Bryson.

Glenn J. Pfadenhauer of Williams & Connolly, Washington, D.C. argued for the  University of Pittsburgh. John Allcock of DLA Piper, San Diego, argued for Hedrick, Benhaim, Lorenz, and Zhu.

Read the entire Univ. of Pittsburgh v. Hedrick opinion.
 

CAFC Agrees That Accused Refrigerator Shelves Are Infringing

July 20, 2009

Refrigerator shelves manufactured by a defendant are infringing because they feature structural characteristics that constitute  “a relatively resilient edge portion which temporarily deflects and subsequently rebounds to snap-secure” the glass panel within the meaning of the claim language in the asserted patent, the U.S. Court of Appeals for the Federal Circuit ruled July 20 (Gemtron Corp. v. Saint-Gobain Corp., Fed. Cir., No. 2009-1001, 7/20/09).

Upholding a district court’s summary judgment of infringement and permanent injunction, the appellate court affirmed the district court’s claim construction, found that the accused shelves met the requirements of the claim language, and agreed that defendant Saint-Gobain Corp. was not entitled to a judgment as a matter of law.

Refrigerator Shelving.

Gemtron Corp. has a patent, (U.S. No. 6,679,573) that requires in Claim 23 “a relatively resilient edge portion which temporarily deflects and subsequently rebounds to snap-secure one of said front and rear edges in the glass-piece edge-receiving channel.” Refrigerator shelves in the prior art were constructed by bonding the edge of the glass panel to the frame using adhesive. Gemtron’s invention  avoids the manufacturing costs of adhesives.

In Gemtron’s suit against Saint-Gobain, the appellate court first found that the claim language and the specification supported the district court’s claim construction. Thus, it affirmed the reading of  “relatively resilient end edge portion which temporarily deflects and subsequently rebounds to snap-secure” as meaning that the end edge portion must be sufficiently resilient that it can temporarily deflect and subsequently rebound when glass is being inserted into the frame. This language just requires that the frame of the claimed shelf has the structural characteristic of having been temporarily deflected and subsequently rebounded to snap-secure the glass at the time of manufacture, Judge Richard Linn wrote.

Product-by-Process Argument Rejected.

Linn went on to find that this construction gave no support to Saint-Gobain’s main infringement argument—that the accused shelves cannot infringe because the manufacturing process occurs in Mexico, and that, by the time that the accused shelves are imported into the United States, the frames have cooled and are no longer flexible. Rejecting Saint-Gobain’s argument that this reading transformed the “relatively resilient” limitation of Claim 23 into a product-by-process limitation, Linn stated as follows:

Claim 23 is directed to an apparatus—“[a] refrigerator shelf”—not a process. … Under 35 U.S.C. § 271(a), an accused infringer infringes an apparatus claim if it “makes, uses, offers to sell, or sells” the claimed apparatus “within the United States,” or “imports [the apparatus] into the United States.” Critically, it is the infringing act—making, using, offering to sell, selling, or importing—that must be within (or into) the United States. Even if an infringing product is manufactured outside of the United States, a person infringes if he imports the product, or uses, offers to sell, or sells it in the United States.…

Properly construed, the `relatively resilient’ limitation requires no more than that the frame of the claimed shelf has the structural characteristic of having been temporarily deflected and subsequently rebounded to snap-secure the glass at the time of manufacture. In this case, Saint-Gobain does not dispute that it has imported the accused shelves, and that it has used and sold them in the United States. The end portions of the frames of the accused shelves are “relatively resilient,” as that phrase is used in claim 23, in that they were temporarily deflected and subsequently rebounded when glass was being inserted into the frame during assembly. The accused shelves therefore satisfy the “relatively resilient end edge portion which temporarily deflects and subsequently rebounds to snap-secure” limitation of claim 23, as properly construed. Thus, there is no genuine issue as to any material fact as to infringement by the SG1, SG2, and SG3 shelves, and Gemtron was entitled to a judgment  a matter of law that those shelves infringed.

Moreover, the court noted that Saint-Gobain’s noninfringement theory was undermined by key video evidence: during the manufacturing process, while the frame is still warm from the molding process, a Saint-Gobain employee pushes on the frame, which temporarily deflects to accommodate the glass, then rebounds to snap-secure the glass piece in a receiving channel in the frame.

Obviousness Rejected.

Finally, as to Saint-Gobain’s argument that Claim 23 was invalid for obviousness under 35 U.S.C. § 103, the Federal Circuit found that the patent specification did not contradict Gemtron’s expert testimony that the shelf of the ’573 patent was, unexpectedly, able to support food loading. Concluding that Gemtron’s expert provided substantial evidence that a skilled artisan would not have expected the results of the combination recited in Claim 23, the court affirmed the ruling that Saint-Gobain was not entitled to a judgment as a matter of law on obviousness.

The district court’s ruling was affirmed.
Chief Judge Paul R. Michel and Judge Alvin A. Schall joined in the opinion.
David L. De Bruin of Michael Best & Friedrich, Chicago, argued for Gemtron.
Arthur I. Neustadt of Oblon, Spivak, McClelland, Maier & Neustadt, Alexandria, Va., argued for Saint-Gobain.

Read the Gemtron vs. Saint-Gobain opinion.

 

TTAB Affirms Refusal to Register Bicycle Spoke Design Covered by Utility Patents, Finding It Functional Under TrafFix

July 16, 2009

The Trademark Trial and Appeal Board on July 16 affirmed the denial of a registration for a bicycle spoke design because it is covered by utility patents, and thus is functional subject matter not registrable as a trademark under Section 2(e)(5) of the Trademark Act (In re Rolf Dietrich, Serial No. 78723912 (TTAB July 16, 2009).

Quoting the U.S. Supreme Court’s ruling in TrafFix Devices Inc. v. Marketing Displays Inc., the board stressed that "[a] utility patent is strong evidence that the features therein claimed are functional," and found that the applicant seeking trademark protection here failed to meet the heavy burden of proving the design is not functional.

Mark Sought for Bicycle Wheel Design Covered by Utility Patents.

Rolf Dietrich has numerous utility patents for bicycle wheels that have paired spokes and other asserted features. Dietrich applied for trademark protection, but the examiner refused on the ground that the configuration is functional under Section 2(e)(5) of the Trademark Act

Traffix Applied to Bar Registration.

The Trademark Trial and Appeal Board affirmed the refusal.

It began by observing the statement in TrafFix Devices Inc. v. Marketing Displays Inc., 532 U.S. 23 (2001) that a product feature is functional and cannot serve as a trademark "if the feature is essential to the use or purpose of the article or if it affects the cost or quality of the article." It further noted TrafFixs point that "[a] utility patent is strong evidence that the features therein claimed are functional" and "[w]here the...patent claimed the features in question, one who seeks to establish trade dress protection must carry the heavy burden of showing that the feature is not functional, for instance by showing that it is merely an ornamental, incidental, or arbitrary aspect of the device."

The board then analyzed the issue of the design’s functionality under the four factors set forth in In re Morton-Norwich Products Inc., 671 F.2d 1332 (CCPA 1982): (1) the existence of a utility patent that discloses the utilitarian advantages of the design; (2) the touting by the originator of the design in advertising material of the utilitarian advantages of the design; (3) facts showing the unavailability to competitors of alternative designs; and (4) facts indicating that the design results from a relatively simple or cheap method of manufacturing the product.

Quoting TrafFix, the board went on to concluded that the patents, which disclose and claim the utilitarian advantages of the underlying aspects of the applied-for design, show that the particular design configuration clearly "affects the...quality" of Dietrich’s wheels. “Given the strong weight to be accorded such patent evidence under TrafFix, we find that the patents are sufficient to establish, prima facie, that the design is functional.”

Following the Morton-Norwich analysis, the board noted that Dietrich’s  website and advertising tout his spoking technology, “regardless of the particular pattern used.”   “The clear implication” is that Dietrich’s entire "wheel system," including the particular spoking arrangement, is covered by applicant's patents, the board said. As to the third factor, it acknowledged alternative designs on the market, but said that Dietrich’s design, “which is protected by various patents, apparently performs better, and it is at least implicitly promoted that way.”  As to the fourth factor, it noted that while Dietrich’s wheel may cost more to manufacture, “a higher cost does not detract from the functionality of that feature.” Here, it stressed TrafFix’s point that a product feature is functional "when it affects the cost or quality of the article." Concluding, it reasoned that, “even at a higher manufacturing cost, applicant would have a competitive advantage for what is essentially, as claimed in the patents, a superior quality wheel.”

The refusal to register was affirmed.

Read the In re Rolf Dietrich ruling.

Read the TrafFix  ruling.

 

CVS Is Barred From Selling “Cool Water” Fragrance Products Whose UPC Codes Have Been Removed

July 14, 2009

The U.S. Court of Appeals for the Second Circuit July 14 affirmed a preliminary injunction that bars retailer CVS Corp. from selling “Cool Water” fragrance products whose unique production codes have been removed, reasoning that these codes play an important role in helping the trademark owner to guard against counterfeits and protect the reputation of the mark (Zino Davidoff SA v. CVS Corp., 2d Cir., No. 07-2872-cv, 7/14/09).

The court said that interference with a trademark holder’s legitimate steps to control quality unreasonably subjects the trademark holder to the risk of injury to the reputation of its mark, and that the product tampering here caused a luxury fragrance to take on the appearance of something suspect that a television gangster would give to his wife. “Mutilated packaging makes the item less appealing to such a purchaser, who runs the risk that the gift will be viewed by the recipient as a sketchy, cheap purchase from an illicit source or of the sort given by Tony Soprano to Carmela.” 

Tampering With `Cool Water’ Bottle Codes.

Zino Davidoff SA, maker of the highly successful “Cool Water” line of fragrances, brought this trademark infringement suit against CVS Corp. after it learned from investigators that the drugstore retailer was selling Cool Water products whose unique production codes had been removed through cutting, grinding, or chemicals.

Embedded within the code is a variety of information about that particular unit, such as the time and place of production, the production line, and ingredients used, and Davidoff uses the UPC system to fight counterfeiting. Given the high expense involved in placing a unique number on each unit, counterfeiters generally either omit this number from their packaging or repeatedly use sets of fake numbers on a series of counterfeit units. The coding system allows Davidoff investigators and U.S. Customs and Border Protection officers to readily spot fakes, and it helps Davidoff identify defective goods.

In light of Davidoff’s evidence, the district court granted Davidoff a preliminary injunction.

CVS appealed.

From a Luxury Good to `the Sort Given by Tony Soprano to Carmela.’

CVS argued that the injunction should not have been issued since the goods it sells with the codes removed are gray-market goods–genuine Davidoff goods sold by Davidoff through authorized channels in other countries and subsequently imported by others into the United States. CVS argued that, because these goods are sold in their original packaging with the Davidoff trademarks clearly visible and unaltered, the removal of the codes does not negate their genuineness or constitute infringement.

This argument “misses the point,” Judge Pierre N. Leval said, noting that the issue is not whether the sale of gray-market goods infringes this trademark, but instead whether the removal of Davidoff’s codes interfered unlawfully with Davidoff’s trademark rights. “In our view,” he said, “the district court correctly found that Davidoff was likely to succeed on the merits in its contention that CVS’s sales of its products with the UPC removed constituted trademark infringement.”

The court observed its holding in Polymer Tech. Corp. v. Mimran, 37 F.3d 74, (2d Cir. 1994), that goods are not genuine if they do not conform to the trademark holder’s quality control standards, and that, under Original Appalachian Artworks Inc. v. Granada Elecs. Inc., 816 F.2d 68 (2d Cir. 1987), goods are not genuine if they differ materially from the product authorized by the trademark holder for sale. It went on to find Davidoff likely to succeed in its trademark infringement claim not only on the basis of CVS’s interference with its quality control, but also because CVS is selling under Davidoff’s mark goods that are materially different from the genuine trademarked product.

Interference with the trademark holder’s legitimate steps to control quality unreasonably subjects the trademark holder to the risk of injury to the reputation of its mark, the court explained. Here, it quoted authority stating that “[o]ne of the most valuable and important protections afforded by the Lanham Act is the right to control the quality of the goods manufactured and sold under the holder’s trademark,” El Greco Leather Prods. Co. v. Shoe World Inc., 806 F.2d 392 (2d 7 Cir. 1986).

Leval continued:

In attaching its mark to its goods over time, a holder assures consumers that the goods conform to the mark holder’s quality standards. Reputation for quality, whether good or bad, becomes associated with a mark in the minds of consumers. Many consumers are willing to pay more to buy goods bearing a mark which experience has taught the consumer represents an assurance of high quality.

Davidoff argued that its codes serve as a control of quality in two ways: (1) permitting the easy detection of counterfeits, and (2) improving the ability to identify defective products, effectuate a targeted recall, and remedy production defects. Under Warner-Lambert Co. v. Northside Dev. Corp., 86 F.3d 3 (2d Cir. 1996), a trademark holder is entitled to an injunction against one who would subvert its quality control measures upon a showing that (i) the asserted quality control procedures are established, legitimate, substantial, and nonpretextual, (ii) it abides by these procedures, and (iii) sales of products that fail to conform to these procedures will diminish the value of the mark.

Leval agreed with the district court’s conclusion that the Davidoff code system is effective in detecting counterfeits and identifying defective products, and that Davidoff provided ample evidence to satisfy all three Warner-Lambert elements. In his analysis, he rejected CVS’s argument that Davidoff had not shown any sales to involve inferior products, reasoning as follows:

For at least two reasons, CVS’s argument is meritless. First, such proof is unnecessary. In El Greco, we clearly articulated that, for purposes of analyzing trademark infringement involving interference with quality control procedures, “the actual quality of the goods is irrelevant; it is the control of quality that a trademark holder is entitled to maintain.” … The mark holder is entitled to protection against acts that subvert its ability to protect the reputation of its marks by exercising quality controls.

Second, it is untrue that none of CVS’s sales of product with code removed involve inferior product. Characteristically, sellers of luxury goods, such as fragrances, go to great length and expense to present the trademarked merchandise in appealing packaging. For a seller to damage the packaging by cutting away portions or applying acids to blur markings detracts from the value of the product. The evidence showed that removal of the UPC required tampering – the cutting of packaging, the application of chemicals to wipe away the labeling, and the grinding of the bottles – all of which is visible to a consumer. It is a logical inference that consumers may regard a product whose packaging has been tampered as inferior and perhaps suspicious. Mutilation of packaging to conceal markings may lead the consumer to suspect that the item is stolen merchandise, or is defective and has been diverted from a recall, or is otherwise untrustworthy. Furthermore, fragrances are often purchased to be offered as romantic gifts. Mutilated packaging makes the item less appealing to such a purchaser, who runs the risk that the gift will be viewed by the recipient as a sketchy, cheap purchase from an illicit source or of the sort given by Tony Soprano to Carmela. In short, trademarked goods whose luxury packaging is damaged are materially different from those that are intact. …

The preliminary injunction was affirmed.

Judges Robert A. Katzmann and Debra Ann Livingston joined the opinion.

Davidoff was represented by Lisa Pearson of Kilpatrick Stockton, New York. CVS was represented by Megan Muoio of Allyn & Fortuna, New York.

Read the Zino Davidoff v. CVS Corp. opinion.

 

Suit Over “Krupnik” Beverage Marks Was Improperly Dismissed For Lack of Venue as Claims Are Not Subject to Forum Selection Clauses

July 13, 2009

A suit charging a Polish company with infringing the “Krupnik” beverage trademarks and other violations of U.S. law was improperly dismissed by a federal district court for lack of venue because these claims are not “resulting from” licensing agreements with forum selection clauses specifying venue in Poland, the U.S. Court of Appeals for the Second Circuit ruled July 13 (Altvater Gessler-J.A. Baczewski Int’l (USA) Inc. v. Sobieski Destylarnia S.A., 2d Cir., No. 07-2273, 7/13/09).

Applying its ruling in Phillips v. Audio Active Ltd., the court found that the forum selection clauses were not controlling since the plaintiff’s claims here for trademark infringement and dilution “do not sound in contract and are not based on rights originating from the licensing agreements.”    

Venue at Issue in Suit Over “Krupnik” Liqueur Marks.

Altvater Gessler-J.A. Baczewski Int’l (USA) Inc. is a beverage company which has trademark rights in “KRUPNIK” for a honey liqueur.

Gessler brought this suit for trademark infringement, unfair competition, trademark dilution, deceptive trade practices, and other claims against Sobieski Destylarnia S.A., a successor in interest to Gessler’s former licensee, a company called Polmos. Gessler filed the suit after discovering Internet advertisements using the “krupnik” name and claiming that Sobieski was manufacturing the liqueur based on Gessler’s secret recipe.

However, the district court dismissed the suit for improper venue under Fed. R. Civ. P. 12(b)(3) after concluding that the claims fell within the forum selection clauses specifying Poland as the venue for all claims “resulting from” the Gessler-Polmos licensing agreements.

Gessler appealed.
 
Defendant Fails Third Prong of Phillips Test.

The appellate court observed that a case dismissing claims on the basis of forum selection is decided under Phillips v. Audio Active Ltd., 494 F.3d 378 (2d Cir. 2007). To obtain dismissal based on a forum selection clause under Phillips, the party seeking enforcement of the clause must demonstrate that: (1) the clause was reasonably communicated to the party resisting enforcement; (2) the clause was mandatory and not merely permissive; and (3) the claims and parties involved in the suit are subject to the forum selection clause.

Judge John R. Gibson of the U.S. Court of Appeals for the Eighth Circuit, sitting by designation, found that “Sobieski runs into trouble with the third element” in reading the “resulting from” language too broadly. He noted that Phillips overturned the dismissal of a copyright suit involving a similar venue clause after concluding that the plaintiff’s rights did not “originate” from the underlying recording contract. Gibson quoted Phillips’s statement that: “[Plaintiff] does not rely on the recording contract to establish his ownership of the relevant copyrights, but on his authorship of the work . . . . [His] copyright claims do not arise out of the contract because [he] has asserted no rights or duties under that contract . . . .” Further noting Phillips’s point that the recording contract was “only relevant as a defense,” he said that the court there did “not understand the words ‘arise out of’ as encompassing all claims that have some possible relationship with the contract.”

The Second Circuit continued as follows:

We find Phillips to be controlling here. Although the forum selection clauses advanced by Sobieski employ the language “resulting from” as opposed to “arising out of,” the two phrases have very similar meanings. In fact, Webster’s Third New International Dictionary uses the term “arise” when defining “result.” Here, as in Phillips, Gessler’s claims do not sound in contract and are not based on rights originating from the licensing agreements. In fact, Gessler’s claims “may begin in court without any reference to the contract.” …

Accordingly, Gessler’s claims are not subject to the forum selection clauses. The district court erred in dismissing the claims against Sobieski and the other defendants based on the forum selection clauses.

Having concluded that Sobieski failed to show that Gessler’s claims are subject to the forum selection clauses at issue, the court declined to address the other Phillips elements.

The dismissal for lack of venue was reversed.

The opinion was joined by Judges Richard C. Wesley and Peter W. Hall.

Altvater Gessler was represented by Christopher L. Deininger of Bubb, Grogan & Cocca, Morristown, N.J. Sobieski Destylarnia was represented by Jamie D. Underwood of Adduci, Mastriani & Schaumberg, Washington, D.C.

Read the Altvater Gessler v. Sobieski Destylarnia opinion.
 

Shinnecock Indian Nation Is “institution” Under Section 2 of Trademark Act

The Shinnecock Indian Nation is an “institution” under Section 2(a) of the Trademark Act, 15 U.S.C. § 1052(a), and thus is shielded from an applicant’s attempt to register the falsely suggestive “SHINNECOCK BRAND FULL FLAVOR” and “SHINNECOCK BRAND LIGHTS” marks for cigarettes, the U.S. Court of Appeals for the Federal Circuit ruled July 1. In re Shinnecock Smoke Shop, Fed. Cir., No. 2009-1100, 7/1/09. Agreeing with the Trademark Trial and Appeals Board’s decision to refuse registration because the marks falsely suggested a connection with the non-sponsoring Shinnecock Indian Nation, the court relied on the statute’s text and its “plain meaning.”

Title 15, Section 1052(a) of the U.S. Code protects against marks that “falsely suggest a connection with persons, living or dead, institutions, beliefs, or national symbols.” Senior Judge Raymond C. Clevenger wrote that “the ordinary meaning of `institution’ suggests the term is broad enough to include a self-governing Indian nation.” Clevenger added the following:

Our construction is also in line with Board precedent that has specifically included Indian tribes under Section 1052(a)'s protection in the past, see In re White, 73 USPQ2d 1713, 1718 (T.T.A.B. 2004) (finding that "each federally recognized Apache tribe is necessarily either a juristic person or an institution"), and with the Board's general practice of construing the statute in question as broadly applicable, see In re Urbano, 51 USPQ2d 1776, 1779 (T.T.A.B. 1999) (finding that SYDNEY 2000, "the entire organization which comprises the Olympic Games, as a whole, qualifies as an 'institution' within the meaning of Section 2(a) of the Trademark Act"); In re N. Am. Free Trade Assoc., 43 USPQ2d 1282, 1285 (T.T.A.B. 1997) (same for the North American Free Trade Agreement). We agree with the Board's conclusion that the Shinnecock Indian Nation is an "institution" under section 1052(a).

Applicant Jonathan K. Smith was represented by Scott Michael Moore of Moore International Law Offices, New York, N.Y. The U.S. Patent and Trademark Office, Alexandria, Virginia, was represented by Thomas V. Shaw, associate solicitor. Clevenger’s opinion was joined by Judges Haldane Robert Mayer and Alvin A. Schall.

 

Federal Circuit Agrees to Rehear Legality of PTO Claim Rules En Banc

July 2009

The U.S. Court of Appeals for the Federal Circuit on July 6 agreed to rehear the case of plaintiffs challenging the legality of the U.S. Patent and Trademark Office’s proposed rules to limit the number of continuation applications and claims that can be filed by patent applicants (Tafas v. Doll, Fed. Cir., No. 2008-1352, 7/6/09).  In granting the petition for rehearing in a case with broad impact on the scope of future U.S. patent applications, the appellate court’s decision order said that the “March 20, 2009 opinion, Tafas v. Doll, 559 F.3d 1345, is vacated and the appeal is reinstated.”

In this case, inventor Triantafyllos Tafas and drug maker GlaxoSmithKline challenged the PTO’s rules package issued in August of 2007 that placed limitations on the number of continuation applications and claims that applicants could file. (72 Fed. Reg. 46,716). The agency took the action largely to reduce the backlog of applications currently on file.

The U.S. District Court for the Eastern District of Virginia granted Tafas and GlaxoSmithKline a summary judgment enjoining enforcement of the new rules, but the Federal Circuit on March 20, 2009 vacated that ruling in part and upheld three of the four new rules.

  • New Final Rule 78.

Final Rule 78 places a limit of two continuation applications. Under this rule, additional continuation applications would not be entitled to the filing date of the parent applications absent a “showing that the amendment, argument, or evidence sought to be entered could not have been submitted during the prosecution of the prior-filed application.” The Federal Circuit’s 2-1 panel ruling in March found that Final Rule 78’s added requirements were inconsistent with Section 120 of the Patent Act, 35 U.S.C. § 120. Under Section 120, continuation applications meeting four stated requirements “shall” be entitled to the benefit of the parent's filing date. The Federal Circuit found that the additional requirements that the PTO sought to impose were inconsistent with the statute, and, thus, invalid under Patent Act Section 2(b)(2), 35 U.S.C. § 2(b)(2).      

  •  New Final Rule 114.

This new rule sets a limit of one request for continued examination (“RCE”) that patent applicants may submit. See 37 C.F.R. § 1.114. As RCEs are not affected by Section 120, the appellate court found that New Final Rule 114 did not conflict with the statute.

  • Final Rules 75 and 265.

New Final Rule 75 limits applicants to five independent claims and 25 total claims unless an examination support document (“ESD”) is filed; Final Rule 265 sets forth the requirements for an ESD. See id. §§ 1.75, 1.265. The Federal Circuit found that the PTO did not exceed its authority in promulgating these two rules.

The Federal Circuit further held that the district court did not have to defer to the agency’s interpretation of the limits of its rulemaking authority. The Federal Circuit said that the PTO does not have substantive rulemaking authority, only the authority to issue rules that, under 35 U.S.C. §2(b)(2)(A),  “govern the conduct of proceedings” before the office, i.e., procedural rules. However, it found that the disputed rules in this case are not substantive because they do not “effectively foreclose[] [applicants] from obtaining patent rights to which they are entitled” under the ruling in JEM Broadcasting Co. v. Federal Communications Commission, 22 F.3d 320 (D.C. Cir. 1994).
Judge Randall R. Rader dissented from the majority’s “rigid application of a sentence out of context in JEM” and insisted that the PTO’s new rules are indeed substantive. Given the wide ranging impact of this case and the negative response to the ruling among many in the patent bar, the appellate court, with the exception of Judge Alan D. Lourie, took a poll and decided to address this appeal en banc.    

En Banc Questions.

Tafas’s brief for en banc rehearing was filed by Steven J. Moore of Kelley Drye & Warren, Stamford, Connecticut, who argued that the majority:
(1) misapplied significant binding Supreme Court and Federal Circuit precedent concerning the correct standard for classifying administrative rules as “substantive” versus “non-substantive”; (2) failed to fully consider as evidence that the Final Rules significantly and adversely affect individual rights and obligations under the law; (3) failed to correctly address the threshold question of whether the PTO has jurisdictional authority under the Administrative Procedure Act in 35 U.S.C. §2(b)(2) to enact the Final Rules; and (4) misapplied Chevron deference to its improper determination that Rules 75, 265 and 114 were not “inconsistent with existing law.”    

Similarly, GlaxoSmithKline’s attorney, Carter G. Phillips, of Sidley Austin, Washington, D.C., asked two questions:

  • Whether the panel majority erred in rejecting the test for determining whether a Patent and Trademark Office (PTO) rule is “substantive,” as set forth in the controlling precedent of Chrysler Corp. v. Brown, 441 U.S. 281 (1979); Animal Legal Defense Fund v. Quigg, 932 F.2d 920 (Fed. Cir. 1991); and Cooper Technologies Co. v. Dudas, 536 F.3d 1330 (Fed. Cir. 2008); and
  • Whether the panel majority erred in holding that the challenged final rules, 72 Fed. Reg. 46,716 (Aug. 21, 2007), fall within the PTO’s limited, non-substantive rulemaking authority. 

According to the Federal Circuit’s per curiam order, the PTO’s additional brief shall be filed within 30 days, by August 5, and the additional briefs of Tafas and GlaxoSmithKline are due within 20 days of the date of service of the PTO’s brief.  

To read Tafas’s brief for en banc rehearing, click here

To read GlaxoSmithKline’s brief for en banc rehearing, click here
 

Blackboard’s Educational System Patent Is Held Invalid by CAFC

July 2009

Blackboard Inc.’s patent for interactive online learning is invalid for anticipation under Patent Act Section 102(b) and invalid for indefiniteness under Patent Act Section 112, 2, the U.S. Court of Appeals for the Federal Circuit ruled July 27 (Blackboard Inc. v. Desire2Learn Inc., Fed. Cir., No. 2008-1368, 7/27/09).

Educational Methods, System.

Blackboard Inc. sued competitor Desire2Learn Inc. for infringing its patent 6,988,138 related to educational course management software that allows interaction between students and teachers over the Internet.

The U.S. District Court for the Eastern District of Texas entered partial summary judgment of invalidity as to Claims 1-35 for indefiniteness under 35 U.S.C. 112, 2.

After a jury found Claims 36-38 neither invalid for anticipation under 35 U.S.C. § 102(b) nor invalid for obviousness under 35 U.S.C. § 103, Desire2Learn moved for a judgment as a matter of law (JMOL). However, the district court denied the motions.
Desire2Learn appealed the ruling that Claims 36-38 are not invalid. Blackboard  cross-appealed the summary judgment that Claims 1-35 are indefinite as well as the denial of costs for certain discovery expenses.

Without `Single Login’ Feature, Claims 36-38 Anticipated.

Desire2Learn insisted that the ’138 patent was anticipated by two prior art inventions—the Serf system and the Course Info 1.5 software. In rejecting Desire2Learn’s JMOL motions, the district court agreed with Blackboard that the asserted claims required that the recited method permit access to multiple courses and roles through a single login.
However, the Federal Circuit held that “those claims do not contain a ‘single login’ limitation and that the district court’s contrary interpretation of the claim language in its JMOL ruling was error.” The single login limitation was key, for even Blackboard’s own expert acknowledged that the feature allowing access to multiple courses and roles through a single login was the only difference between the claimed invention and the prior art systems. Judge William C. Bryson found that while the claim language and patent specification provide for assigning multiple roles to a single user, nothing requires each user to gain access to all of those multiple roles with a single login. Thus, after rejecting Blackboard’s argument that Desire2Learn waived its right to challenge the claim construction, the appellate court “agree[d] with Desire2Learn that claims 36-38, as properly construed, are invalid for anticipation as a matter of law by CourseInfo 1.5 and Serf.” 

Claims 1-35 Indefinite Absent `Access Control Manager’ Structure.

Blackboard cross-appealed the ruling that Claims 1-35 of the ’138 patent are invalid for indefiniteness.
Bryson noted the district court’s finding that Blackboard failed to disclose any structure for the “access control manager” that performs the “means for assigning” function stated in the patent claims, and thus never satisfied the requirements for means-plus-function claiming under 35 U.S.C. § 112, 6. Consequently, Claims 1-35 were found indefinite under Section 112, 2.

Quoting the en banc ruling in In re Donaldson Co., 16 F.3d 1189 (Fed. Cir. 1994), Bryson observed that “if one employs means-plus-function language in a claim, one must set forth in the specification an adequate disclosure showing what is meant by that language.” If the specification does not contain an adequate disclosure of the structure that corresponds to the claimed function, the patentee will have “failed to particularly point out and distinctly claim the invention as required by the second paragraph of section 112,” which renders the claim invalid for indefiniteness, he continued, again quoting Donaldson.

The appellate court affirmed the finding of invalidity for indefiniteness. Looking at the specification, it found Blackboard’s statement completely inadequate. Bryson said that it “is not a description of structure,” but “simply an abstraction that describes the function of controlling access to course materials, which is performed by some undefined component of the system.”

He continued:

The ACM is essentially a black box that performs a recited function. But how it does so is left undisclosed.

The specification contains no description of the structure or the process that the access control manager uses to perform the “assigning” function. Nor has Blackboard ever suggested that the “access control manager” represents a particular structure defined other than as any structure that performs the recited function.

For support, Bryson noted that Aristocrat Technologies Australia Pty Ltd. v. International Game Technology, 521 F.3d 1328 (Fed. Cir. 2008), found a general reference to “a standard microprocessor-based gaming machine with appropriate programming”  insufficient to show structure for a function in a means-plus-function claim. In that case, the court said that “[t]he point of the requirement that the patentee disclose particular structure in the specification and that the scope of the patent claims be limited to that structure and its equivalents is to avoid pure functional claiming.” Without so limiting a claim, “the patentee has not paid the price but is attempting to claim in functional terms unbounded by any reference to structure in the specification,” the Aristocrat court reasoned.

Likewise, Bryson noted that Net MoneyIN Inc. v. VeriSign Inc., 545 F.3d 1359 (Fed. Cir. 2008), held the reference to a “bank computer” insufficient to provide structure supporting the claimed function. While the patentee there argued that a skilled artisan would know how such a computer would be programmed, the court rejected that argument and explained that when a computer is referenced as support for a function in a Section 112, 6 claim, there must be some explanation of how the computer performs the claimed function.

Rejecting Blackboard’s argument that sufficient structure was disclosed for purposes of Section 112, 6 given the knowledge of a skilled artisan, the court concluded as follows:

A patentee cannot avoid providing specificity as to structure simply because someone of ordinary skill in the art would be able to devise a means to perform the claimed function. To allow that form of claiming under section 112, paragraph 6, would allow the patentee to claim all possible means of achieving a function. …

That ordinarily skilled artisans could carry out the recited function in a variety of ways is precisely why claims written in “means-plus-function” form must disclose the particular structure that is used to perform the recited function. By failing to describe the means by which the access control manager will create an access control list, Blackboard has attempted to capture any possible means for achieving that end. Section 112, paragraph 6, is intended to prevent such pure functional claiming. …  We thus agree with the district court that the ’138 patent discloses insufficient structure to perform the function of “assigning a level of access to and control of each data file based on a user of the system’s predetermined role in a course.”

The indefiniteness ruling as to Claims 1-35 was affirmed, and the denial of the JMOL as to Claims 36-38 based on anticipation was reversed. Having found Claims 36-38 invalid for anticipation, the court declined to address whether those claims are obvious or infringed. Based on the invalidity rulings, the court dismissed Blackboard’s appeal on costs as moot.

Joel M. Freed and Michael S. Nadel of McDermott Will & Emery, Washington, D.C., argued for Blackboard.
Harold C. Wegner of Foley & Lardner, Washington, D.C., argued for Desire2Learn on invalidity. George E. Quillin of Foley & Lardner, Washington, D.C., argued for Desire2Learn on costs.

The opinion was joined by Judge Kimberly A. Moore and Senior Judge Richard D. Cudahy of the U.S. Court of Appeals for the Seventh Circuit, sitting by designation. 

Read the entire Blackboard v. Desire2Learn opinion.

 

Shinnecock Indian Nation Is “institution” Under Section 2 of Trademark Act

July 1, 2009

The Shinnecock Indian Nation is an “institution” under Section 2(a) of the Trademark Act, 15 U.S.C. § 1052(a), and thus is shielded from an applicant’s attempt to register the falsely suggestive “SHINNECOCK BRAND FULL FLAVOR” and “SHINNECOCK BRAND LIGHTS” marks for cigarettes, the U.S. Court of Appeals for the Federal Circuit ruled July 1. In re Shinnecock Smoke Shop, Fed. Cir., No. 2009-1100, 7/1/09. Agreeing with the Trademark Trial and Appeals Board’s decision to refuse registration because the marks falsely suggested a connection with the non-sponsoring Shinnecock Indian Nation, the court relied on the statute’s text and its “plain meaning.”

Title 15, Section 1052(a) of the U.S. Code protects against marks that “falsely suggest a connection with persons, living or dead, institutions, beliefs, or national symbols.” Senior Judge Raymond C. Clevenger wrote that “the ordinary meaning of `institution’ suggests the term is broad enough to include a self-governing Indian nation.” Clevenger added the following:

Our construction is also in line with Board precedent that has specifically included Indian tribes under Section 1052(a)'s protection in the past, see In re White, 73 USPQ2d 1713, 1718 (T.T.A.B. 2004) (finding that "each federally recognized Apache tribe is necessarily either a juristic person or an institution"), and with the Board's general practice of construing the statute in question as broadly applicable, see In re Urbano, 51 USPQ2d 1776, 1779 (T.T.A.B. 1999) (finding that SYDNEY 2000, "the entire organization which comprises the Olympic Games, as a whole, qualifies as an 'institution' within the meaning of Section 2(a) of the Trademark Act"); In re N. Am. Free Trade Assoc., 43 USPQ2d 1282, 1285 (T.T.A.B. 1997) (same for the North American Free Trade Agreement). We agree with the Board's conclusion that the Shinnecock Indian Nation is an "institution" under section 1052(a).

Applicant Jonathan K. Smith was represented by Scott Michael Moore of Moore International Law Offices, New York, N.Y. The U.S. Patent and Trademark Office, Alexandria, Virginia, was represented by Thomas V. Shaw, associate solicitor. Clevenger’s opinion was joined by Judges Haldane Robert Mayer and Alvin A. Schall.

 
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