Federal Circuit Dispenses with Narrow Claim Construction

Ventana Medical Systems, Inc. v. Biogenex Laboratories, Inc., [06-1074](December 29, 2006)[PROST, Lourie, and Dyk] The Federal Circuit vacated judgment of non-infringement of a patent on a system for automated staining of microscope slides, and remanded for further proceedings.
BRIEF: The sole issue on appeal was the meaning of the word “dispensing” reagent in the claims. The district court construed “dispensing” to mean “direct dispensing” meaning that reagent is dispensed directly from the reagent container. The district court said that the written description and figures supported a narrow construction of dispensing because all of the disclosed embodiments dispense reagent directly from the bottom of the reagent container without using any intermediate transfer, and because of disclaimer during prosecution. The Federal Circuit agreed with Ventana that there was nothing in the record to suggest that a person of ordinary skill in the art would . The Federal Circuit found no language in the claims that would limit dispensing to direct dispensing. The Federal Circuit declined to interpret general statements about the prior art to effect a complete surrender of all types of dispensing except direct, particularly where the prior art included direct dispensing, and in any event the inventors were not distinguishing over the prior art. The Federal Circuit also rejected the argument that the claims had to be limited to cover the novel features, saying that patentees are not required to include within each of their claims all of the advantages or features described as significant or important in the written description. “An invention may possess a number of advantages or purposes, and there is no requirement that every claim directed to that invention be limited to encompass all of them.” The Federal Circuit then rejected the argument of prosecution disclaimer, noted that “the doctrine of prosecution disclaimer generally does not apply when the claim term in the descendant patent uses different language. Although the Federal Circuit agreed that statements made by the inventor during continued prosecution of a related application can, in some circumstances, be relevant to claim construction, the Federal Circuit rejected the argument that “dispensing” had been limited by statements in prosecuting subsequent applications. The Federal Circuit found that differences in the claims made statements from subsequent production irrelevant to the current claims.

Obviousness olf a Compound Does not Hinge on Structural Similarity Alone

Eli Lily and Company v. Zenith Goldline Pharmaceuticals, Inc., [05-1396, -1429, -1430](December 26, 2006)[RADER, Schall, Gajarsa] The Federal Circuit affirmed the district’s holding that Lily’s patent on a composition to treat schizophrenia was valid and infringed.
BRIEF: LOF: Anticipation is a question of fact, including whether or not an element is inherent in the prior art. To anticipate a prior art reference must place the inventive compound or composition in the possession of the public. Thus the prior art reference must disclose each and every feature of the claimed invention, either explicitly or inherently. The Chakrabarti reference disclosed millions of compounds considering all of the proposed alternative substituents, and listed several preferred compounds and substituents, none of which resembled the claimed compound. While the reference did disclose a similar general structural formula, not possible combination of the preferred substituents would lead to the claimed compound. The Federal Circuit noted that to make claimed compound one would have to depart from the teaching of the reference, and recombine the components of specific illustrative compound with hindsight. The Federal Circuit concluded that the Chakrabarti reference did not place the claimed compound in the possession of the public. As to obviousness, the Federal Circuit said that for a chemical compound, a prima facie case of obviousness require structural similarlity between the claimed and prior art subject matter, where the prior art gives reason or motivation to make the claimed composition. The Federal Circuit agreed with the district court that the prior art taught away from the substitution required to arrive at the claimed compound. The Federal Circuit said that patentability does not hinge on structural similarity alone. Where the claimed properties differ from the prior art, and if those difference are unexpected and significant, the differences may lead to nonobviousness. Moreover, there was no evidence that a person of ordinary skill in the art would have selected the asserted prior art as a lead compound in view of the teachings of the prior art. The Federal Circuit also found that Lily had shown strong secondary considerations, including longfelt but unmet need, failure of others, industry acclaim, and unexpected results.
Regarding public use, the Federal Circuit held that such use as there was, was experimental, identifying six relevant factual inquiries: 1. the length of the test period; 2. existence of confidentiality agreements; 3. records of testing; 4. monitoring and control of test results; 5. the number of tests; 6. the length of testing compared to testing of similar inventions.
The Federal Circuit also affirmed the finding of no inequitable conduct.

Action Before the Critical Date is, Well, Critical

Plumtree Software, Inc., v. Datamize, LLC., [06-1017](December 18, 2006)[DYK, Newman, Friedman]
SIGNIFICANCE: To be on sale, there must be an express offer to perform the method before the critical date, or the method must actually be performed before the critical date.
BRIEF: The Federal Circuit sustained the district court’s denial of a motion to dismiss for lack of subject matter jurisdiction, but vacated and remanded summary judgment that the patent in suit was invalid under the on sale bar. As to jurisdiction, the Federal Circuit reiterated its test for declaratory judgment jurisdiction: There must be both an explicit threat or other action by the patentee, which creates a reasonable apprehension on the part of the declaratory plaintiff that it will face an infringement suit, and (2) present activity which could constitute infringement or concrete steps taken with the intent to conduct such activity. With respect to the on sale bar, Under Pfaff Plumtree had to show that the product was the subject of a commercial sale or offer for sale, and that the invention was ready for patenting. At issue was the first prong of the Pfaff test – whether there was a commercial offer for sale of the claimed method. The Federal Circuit said that Plumtree could show a commercial sale or offer for sale if either (1) before the critical date there was a commercial offer to perform the patented method (even if the method was not performed until after the critical date, or (2) before the critical date, the patented method was actually performed for a promise of future consideration. The Federal Circuit found that there was a commercial offer, but that the record did not provide a basis to conclude that the patented method was required to be performed. Nor was there evidence that the claimed method was actually practiced before the critical date. The Federal Circuit reversed summary judgment of invalidity.

You Still Need Proof to Win a Patent Infringement Case

Hermann Douglas v. Wal-Mart Stores, Inc., [06-1473](December 18, 2006)[Mayer, Rader, Gajarsa][NON-PRECEDENTIAL] The Federal Circuit affirmed summary judgment in favor of Wal-Mart on Douglas claims of patent infringement, copyright infringement, trade dress infringement, false advertising, unfair competition, and trademark infringement. Douglas owned a patent on an auto control pillow, and sued Wal-Mart alleging a neck massage pillow sold by Wal-Mart infringed his patent. Douglas failed to prove any of his causes of action.

Inducement Requires Specific Intent to Cause Infringement

DSU Medical Corporation v. JMS CO., Ltd, [04-1620, 05-1048, -1052](December 13, 2006)[RADER, Schall, Linn] The Federal Circuit affirmed a finding of invalidity of one patent, but infringement of a second patent on a guarded, winged-needle assembly, and an award of $5 million damages.
BRIEF: One of the issues on appeal was whether the Court should have granted a new trial because the jury did not find ITL, who manufactured a component of the assembly that was found to infringe, liable for contributory infringement. The Federal Circuit started with the Supreme Court’s instruction that “One who makes and sells articles which are only adapted to be used in a patented combination will be presumed to intend the natural consequences of his acts; he will be presumed to intend that they shall be used in the combination of the patent. The Federal Circuit found that the record showed that ITL supplied the component, that the component had no substantial non-infringing usees, and that ITL intended to make the component. In fact, the Federal Circuit found, ITL acted with knowledge of the patent and knowledge that the component was specially adapted for use in an infringing manner. However, the district court found, and the Federal Circuit agreed, that there was no direct evidence that the components were actually assembled into an infringing structure. As a result the Federal Circuit found no abuse of discretion in denying the motion for a new trial.
The Federal Circuit considered the question of the required level of intent for inducement of infringement en banc, and held that the patentee has the burden of showing that the alleged infringer’s actions induced infringing acts and that he know or should have known his actions would induce actual infringement. The Federal Circuit explained that this required a knowledge of the patent. DSU challenged the jury instructions which required intent to cause direct infringement, and not merely intent to cause actions where constitute direct infringement. The Federal Circuit concluded that “inducement requires evidence of culpable conduct, directed to encouraging another’s infringement, not merely that the inducer had knowledge of the direct infringer's activities. While ITL had knowledge of the patent, it had opinions of counsel that it was not infringing, and thus there was support for the jury verdict that ITL did not intend to cause infringement. DSU complained that it wasn’t awarded damages on its price erosion theory, but the verdict contained a general category of lost profits damages, and without further detail the Federal Circuit said that there was no basis to speculate that price erosion damages were not included.

Unjust Enrichment Claim Not Appealing to the Federal Circuit

Thompson v. Microsoft Corp., [06-1073](December 8, 2006)[LINN, Mayer, Bryson] The Federal Circuit transferred the case to the Sixth Circuit.
BRIEF: Thomspon sued Microsoft for unjust enrichment, and the claim was dismissed as preempted by the Patent Act. Thompson appealed to the Federal Circuit, but the Federal Circuit found that the case did not arise under the patent laws as contemplated by 28 USC 1338, and transferred the appeal to the Sixth Circuit.

Invevitable Confusion is Not

Teledyne Technologies, Inc. v. Western Skyways, Inc., [2006-1366, -1367](December 6, 2006)[MICHEL, Linn and Prost] The Federal Circuit affirmed the TTAB’s decision denying cancellation of the mark GOLD SEAL for aircraft engines. Factual findings of the TTAB must be upheld I supported by substantial evidence – i.e., more than a mere scintilla, it must be enough that a reasonable mind might accept as adequate to support a conclusion. The Federal Circuit found that Teledyne put all of its eggs in the inevitable confusion basket, in failing to explain its three year delay in taking action, and that there was substantial evidence to support the conclusion that confusion was not inevitable.