Patents Can be Transferred by Operation of Law, Without an Assignment

Akira v. Link New Technology International, Inc., [2007-1184] (March 31, 2008) [ARCHER, Newman, Linn] The Federal Circuit vacated summary judgment because issues of Japanese intestacy law must be resolved by the district court in order to determine ownership of U.S. Patent No. 5,615,716, and remanded for further proceedings.
SIGNIFICANCE: Patents can be transferred by operation of local law, and local law determines whether they were in fact transferred.
BRIEF: LOF: Whether a party has standing to sue is a question of law reviewed. The Federal Circuit noted that patent ownership may be transferred by assignment, and section 261 addresses such a transfer—requiring assignments to be in writing. However, there is nothing that limits assignment as the only means for transferring patent ownership. Indeed, the case law illustrates that ownership of a patent may be changed by operation of law. The Federal Circuit found that the district court erroneously assumed that intestate succession is an “assignment”. The Federal Circuit said that its case law is clear that state law, not federal law, typically governs patent ownership, and that it has looked to state law when determining ownership of the patent following a patent owner’s death. The Federal Circuit said that applying this principle to the present case would require looking to foreign law, as opposed to state law, to determine ownership of the ‘716 patent—because Yasumasa was a resident of Japan at the time of his death. The Federal Circuit remanded the case for determination of issues of Japanese intestacy law by the district court.

In Context, "And" means "Or"

Ortho-McNeil Pharmaceutical, Inc, v. Mylan Laboratories, Inc., [ 2007-1223] (March 31, 2008) [RADER, Michel, Linn] The Federal Circuit affirmed the district court’s rulings claim construction, inequitable conduct, obviousness, and enablement, and resetting the effective date of Mylan's ANDA under 35 U.S.C. § 271(e)(4)(A).
SIGNIFICANCE: Claim terms must be construed in context. You can't discount the inventor's insights, willingness to confront and overcome obstacles, and yes, even serendipity in the obviousness determination.
BRIEF: At issue was the meaning of “and”. The Federal Circuit held that as used in this claim, and conjoins mutually exclusive possibilities. The Federal Circuit noted that the claim does not use and in isolation but in a larger context that clarifies its meaning. Specifically, and appears in conjunction with the adverbs independently and together. As the district court explained, these terms signal that and links alternatives that occur under the different conditions of independence or togetherness.
The Federal Circuit also rejected the argument that all the inventors did was find a compound form a limited number of alternatives, which was obvious under KSR. The Federal Circuit found that this not only was not true, but that Mylan’s evidence smacked of hindsight. The Federal Circuit said that the inventor’s pathway to the invention, of course, seems to follow the logical steps to produce these properties, but at the time of invention, the inventor's insights, willingness to confront and overcome obstacles, and yes, even serendipity, cannot be discounted.

a Textbook Case Where a Combination of Familiar Elements According to Known Methods that Does No More Than Yield Predictable Results

Agrizap, Inc. v. Woodstream Corp., [2007-1415, -1421 ] (March 28, 2008) [MOORE, Bryson, Wolle] The Federal Circuit affirmed the denial of Woodstream's (JMOL) that it made no fraudulent misrepresentation, but reversed the denial of Woodstream's JMOL motion for invalidity for obviousness, and declined to reach the denial of Woodstream's JMOL for invalidity for anticipation, unenforceability for inquitable conduct, and Agrizap's JMOL for infringement.
BRIEF: Agrizap is the holder of the U.S. Patent No. 5,949,636 patent, which relates to a method and apparatus for electrocuting pests, such as gophers, rats, and the like. Woodstream approached Agrizap about marketing the Rat Zapper, the commercial embodiment of the ’636 patent. The two parties engaged in negotiations, signing a mutual confidentiality agreement that permitted either party to disclose certain secret and proprietary information for the purposes of assessing Woodstream’s interest in purchasing Agrizap’s products and forming a business relationship with Agrizap. Without Agrizap’s knowledge, Woodstream sent samples of the Rat Zapper to offshore Chinese manufacturers. Upon learning of Woodstream’s actions, Agrizap sought written assurance that Woodstream’s actions fell within the terms of their confidentiality agreement. Woodstrean responded but did not directly address the confidentiality agreement. This prompted Agrizap, to which Woodstrean responded referring to the confidentiality agreement. Woodstream decided that it would manufacture the the product itself, deciding to go through Agrizap in the short term to give Woodstream access to the technology."
At the end of negotiations, the parties established an oral marketing agreement whereby Agrizap would fulfill Woodstream’s purchase orders at a lower wholesale price. The products would still be named "Rat Zapper," but would use Woodstream’s Victor brand label. Woodstream agreed to distribute the Rat Zappers to large retail stores, such as Home Depot, Ace, and Lowe’s. Agrizap agreed not to compete with Woodstream in these venues. Woodstream later released its Electronic Mouse Trap (EMT) and Electronic Rat Trap (ERT). Upon learning of the ERT in 2004, Agrizap terminated its relationship with Woodstream, claiming that Woodstream purposely withheld information that it was using the Rat Zapper technology to develop its ERT. Agrizap further claimed that, as a result of its reliance on Woodstream’s statements, it suffered damages. But for stream’s misrepresentation, Agrizap would not have given Woodstream exclusive access to certain large retailers in the market, i.e., Home Depot and Ace Hardware, which allowed Woodstream to establish itself in those markets years earlier than it could have otherwise. Agrizap sued for fraudulent misrepresentation and patent infringement. Agrizap won on its fraudulent misrepresentation claim, and on infringement of one claim. The district court denied JMOL on the misrepresentation claim, but granted JMOL of no infringement.
The Federal Circuit found that Agrizap offered sufficient evidence of fraudulent misrepresentation and that the district court properly denied JMOL. Woodstream failed to show that Agrizap did not adequately prove (1) a representation; (2) which is material to the transaction at hand; (3) made falsely, with knowledge of its falsity or recklessness as to whether it is true or false; (4) with the intent of misleading another into relying on it; (5) justifiable reliance on the misrepresentation; and (6) the resulting injury was proximately caused by the reliance.
Regarding the Jury's determination of obviousness, the Federal Circuit said that when the jury is given an essentially black box verdict form—that is, a form that merely asks the jury to answer "yes" or "no" as to whether a claim is obvious, such as was done in this case3—we presume all factual disputes were resolved in favor of the verdict. The Federal Circuit noted that even though a special verdict asks a jury whether a patent claim is obvious provides more insight than one which simply asks whether the patent is invalid, the former still does not provide any detail into the specific fact findings made by the jury. The ultimate conclusion of obviousness is a question of law, and the Federal Circuit's duty is to ensure that the law has been correctly applied to the facts, and review de novo the conclusion on obviousness. During prosecution, Agrizap corrected inventorship of the patent, thereby disqualifying its earlier patent as prior art. However, this did not disqualify the commercial embodiment of that patent, the Gopher Zapper, from being considered as prior art. Considering this as prior art, the Federal Circuit found the claimed invention obvious.
The Federal Circuit observed that it was in the unusual position that the prior art before it was the same as before the PTO. The PTO’s rejection in light of this identical prior art was by no means dispositive of the issues that need to be resolved to determine the validity of the asserted claims. The PTO was never presented with the objective evidence of nonobviousness, including the commercial success of the Rat Zapper, copying by Woodstream, and a long felt need in the market for electronic rat traps, which was presented to the jury. However even presuming the jury found that the objective evidence of nonobviousness favored Agrizap, this evidence is insufficient to overcome the overwhelming strength of Woodstream’s prima facie case of obviousness. The Federal Circuit said it was "a textbook case of when the asserted claims involve a combination of familiar elements according to known methods that does no more than yield predictable results."

A Computer-Implemented Invention Claimed by Means-Plus-Function Must Disclose More Than A General Purpose Computer or Microprocessor

Aristocrat Technologies Australia PTY Limited v. Ingernational Game Technology, [2007-1419](March 28, 2008) [BRYSON, Lourie, Schall] The Federal Circuit affirmed the district court's determination that U.S. Patent No. 6,093,102 directed to an electronic slot machine that allows a player to select winning combinations of symbol positions was invalid for indefiniteness.
BRIEF: The key question in this case is the definiteness of the claim term "game control means" or "control means" that is used several times in claim 1. The parties agreed the term "control means" is a means-plus-function term that invokes 35 U.S.C. § 112 ¶ 6. As such, the scope of that claim limitation had to be defined by the structure disclosed in the specification plus any equivalents of that structure; in the absence of structure disclosed in the specification to perform those functions, the claim limitation would lack specificity, rendering the claim as a whole invalid for indefiniteness under 35 U.S.C. § 112 ¶ 2.
The trial court explained that in a means-plus-function claim “in which the disclosed structure is a computer or a microprocessor programmed to carry out an algorithm, a corresponding structure must be a specific algorithm disclosed in the specification, rather than merely ‘an algorithm executed by a computer.’” Because the specification of the ’102 patent lacked any specific algorithm or any step-by-step process for performing the claimed functions of controlling images on the slot machines' video screen, paying a prize when a predetermined combination of symbols comes up or defining the pay lines for games, the court held the asserted structure to be insufficient to satisfy section 112 paragraph 6.
The Federal Circuit said that in cases involving a computer-implemented invention in which the inventor has invoked means-plus-function claiming, it has consistently required that the structure disclosed in the specification be more than simply a general purpose computer or microprocessor. The 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. The Federal Circuit said that for a patentee to claim a means for performing a particular function and then to disclose only a general purpose computer as the structure designed to perform that function amounts to pure functional claiming. Because general purpose computers can be programmed to perform very different tasks in very different ways, simply disclosing a computer as the structure designated to perform a particular function does not limit the scope of the claim to "the corresponding structure, material, or acts" that perform the function, as required by section 112 paragraph 6. The Federal Circuit concluded the patent does not disclose the required algorithm or algorithms, and a person of ordinary skill in the art would not recognize the patent as disclosing any algorithm at all. Accordingly, the means-plus-function limitations of claim 1 lacked sufficient disclosure of structure under 35 U.S.C. § 112 ¶ 6 and were therefore indefinite under 35 U.S.C. § 112 ¶ 2.

Patentee Failed to Rebut Presumption that Doctrine of Equivalents was Unavailable

A G Design & Associates LLC, v. Trainman Lantern Company, Inc., [2007-1481 ](March 24, 2008)[PROST, Rader, Schall] NON-PRECEDENTIAL The Federal Circuit vacated and remanded a preliminary injunction against TLC's infringement of U.S. Patent No. 7,118,245 on a trainman’s lantern.
BRIEF: The Federal Circuit reviews a grant of a preliminary injunction for an abuse of discretion. An abuse of discretion may be established by showing that the court made a clear error of judgment in weighing relevant factors or exercised its discretion based upon an error of law or clearly erroneous factual findings. The Federal Circuit found that prosecution history estoppel likely precludes a finding of infringement under the doctrine of equivalents in the present case, and thus it did not have to decide whether the district court’s application of the doctrine of equivalents was otherwise correct.
The Federal Circuit noted that in response to a rejection based on prior art during prosecution, AG made a narrowing amendment adding several claim limitations to claim one of the ’245 patent, including "a plurality of ports" formed in the reflector. Accordingly, equivalents are presumptively not available with respect to the limitation of "a plurality of ports" formed in the reflector. AG argued that the amendment in question was only tangentially related to the equivalent in question. The Federal Circuit said that this argument conflated Festo prosecution history estoppel tangential rebuttal analysis with the doctrine of equivalents function-way-result test. In our view, the relevant equivalent in question is the accused device’s reflector without a plurality of ports.

A Disavowal, If Clear and Unambiguous, Can Lie in a Single Distinction Among Many

Computer Docking Station Corp. v. Dell, Inc., [2007-1169, -1316] (March 21, 2008) [RADER, Michel, Plager] The Federal Circuit affirmed summary judgment that defendants did not did not infringe claims 17-20, 22, 24, and 26-28 of Computer Docking Station’s U.S. Patent No. 5,187,645 because the patentee disavowed an interpretation of "portable computer" that would encompass computers with a built-in displays or keyboards. The Federal Circuit also affirmed the denial of attorneys fees to defendants, finding that the case was not exceptional.
SIGNIFICANCE: An applicant can make a disavowal of claim scope even if it is just one of several distinctions that the applicant drew.
BRIEF: The ’645 patent claims a portable microprocessor system with sufficient processing power, memory, and network compatibility for business applications. The computer can be connected to peripherals either individually or through a docking connection. The specification explains that a keyboard and visual display are "options available with the system." At issues was the claim requirement that of a single connector "for making all connections from the microprocessor to said specific computer peripheral devices". In distinguishing over the prior art, which disclosed a laptop computer and a docking module that facilitates operation on a desktop, the Computer Docking Station expressly defined their invention in different terms, and amended the claims.
The district court construed "portable computer" and "portable computer microprocessing system" in the preambles of the asserted claims to mean "a computer without a built-in display or keyboard that is capable of being moved or carried about." The district court determined that the prosecution history and the specification distinguished the claimed invention from a laptop computer, and further that applicant's arguments to distinguish over the prior art amounted to a clear and unmistakable disavowal of computers with built-in displays or keyboards. Thus the district court construed the phrase "said single connector for making all connections from the microprocessor to said computer peripheral devices" to require "that all individual peripheral device connections on the housing that connect to the microprocessor also pass through the single connector." Based on these claim interpretations, CDSC sought entry of final judgment of non-infringement, and appealed.
The Federal Circuit gave a cogent review of the canons of claim construction:

The words of the claims define the scope of the patented invention. . .
. "It is well-settled that, in interpreting an asserted claim, the court
should look first to the intrinsic evidence of record, i.e., the patent itself,
including the claims, the specification and, if in evidence, the prosecution
history." . . . Claim terms are generally given their ordinary and
customary meaning, which is "the meaning that the term would have to a person of
ordinary skill in the art in question at the time of the invention." . . .
However, the person of ordinary skill is deemed to read the claim terms in the
context of the entire patent, including the specification and prosecution
history. . . . Occasionally specification explanations may lead one of
ordinary skill to interpret a claim term more narrowly than its plain meaning
suggests. Nonetheless, this court will not countenance the importation of claim
limitations from a few specification statements or figures into the claims . . .
particularly if those specification extracts describe only embodiments of a
broader claimed invention . . . By the same token, "the specification ‘is
always highly relevant to the claim construction analysis. Usually, it is
dispositive; it is the single best guide to the meaning of a disputed term.’" .
. . The specification may show that "the patentee has disclaimed subject
matter or has otherwise limited the scope of the claims."

The Federal Circuit added that that statements made during prosecution may also affect the scope of the claims. The Court said a patentee could do so, for example, by clearly characterizing the invention in a way to try to overcome rejections based on prior art. The Federal Circuit said that doctrine of prosecution disclaimer "protects the public’s reliance on definitive statements made during prosecution" by "precluding patentees from recapturing through claim interpretation specific meanings [clearly and unmistakably] disclaimed during prosecution," observing that "[c]laims should not be construed 'one way in order to obtain their allowance and in a different way against accused infringers.'"
The Federal Circuit said that prosecution disclaimer does not apply to an ambiguous disavowal. The Federal Circuit gave several examples where prosecution disclaimer does not apply, including where the applicant simply describes features of the prior art and does not distinguish the claimed invention based on those features, or where the specification expressly defines a claim term and "remarks made to distinguish claims from the prior art are broader than necessary to distinguish the prior art, the full breadth of the remark is not ‘a clear and unambiguous disavowal of claim scope as required to depart from the meaning of the term provided in the written description.’"
The Federal Circuit found that "portable computer" and "portable computer microprocessing system" as used in the preambles of the asserted claims limited their scope because the clearly recite a necessary and defining aspect of the invention, specifically its portability. The written description and applicants’ statements during prosecution emphasized this feature of the invention. The Federal Circuit then determined that the applicant's owns statements precluded presence of a key board or display, noting that in overcoming a rejection based on a lap top computer, applicant argued that its system provided all of the interfaces for these devices at a set of interface connectors on the rear bezel of the housing. The applicants also contrasted the advantages of their invention:

Rather than requiring a portable display and keyboard, the present invention
concentrates on portability of an exceptionally large memory capacity in hard
disk drive. . . . For the same sized unit as a conventional lap-top computer,
the invention does require that peripherals be made available at each location,
a requirement that would lead one away from the present invention. However, even
that requirement can be an advantage over laptop computers in that than
requiring a portable display and keyboard, the present invention concentrates on
portability of an exceptionally large memory capacity in hard disk drive. . . .
For the same sized unit as a conventional lap-top computer, the invention does
require that peripherals be made available at each location higher quality
peripherals will more likely be used since they need not be transported. Thus,
lap-top machines make concessions in memory, display and other areas in favor of
portability. The Applicants’ system, on the other hand, is a portable full
service microprocessing system which concedes portability of peripherals.

In these arguments the Federal Circuit agreed that applicant had disavowed a keyboard or screen. The Federal Circuit observed that the applicants distinguished their invention from the prior art in multiple ways. Nonetheless a disavowal, if clear and unambiguous, can lie in a single distinction among many. The Federal Circuit said that Examiner's statement of a different reason for allowance did not erase the applicants’ clear disavowal of laptops, noting that it has found prosecution statements relevant to claim construction even though the examiner did not rely on them.
LOF: The Federal Circuit reviews an exceptional case determination under § 285 for clear error.
LOF: The Federal Circuit reviews a denial of attorney fees under 35 U.S.C. § 285 for an abuse of discretion. The Federal Circuit found no error in finding the case was not exceptional, in part because the disavowal was not so apparent at the start of the claim construction process, and affirmed the denial of attorneys fees.

Attorney have a Duty Not Only to Zealously Advocate, but also to Aid the Court in the Fair and Efficient Administration of Justice

LSI Industries, Inc., v. Imagepoint, Inc., [2007-1292, -1293, -1294, -1295] (March 19, 2008) [LINN, Rader, Wolle]. NON-PRECEDENTIAL The Federal Circuit reversed summary judgment of non-infringement because of errors in claim construction.
BRIEF: The Federal Circuit began with a criticism of defendant's counsel, complaining "The record reveals that counsel made little effort to simplify the case, but instead presented the district court with a firestorm of issues and arguments, fueled by the voluminous reexamination record and an aggressive use of statements in that record to support multiple contentions that subject matter was disavowed." The Federal Circuit noted that while counsel was successful in persuading the district court to adopt constructions for each of the disputed terms that, in most instances, inappropriately imported limitations from the specifications and prosecution histories into the claims, the victory was short-lived, however, and warranted reemphasizing that an attorney has a duty not only to zealously advocate on behalf of his client, but also to aid the court in the fair and efficient administration of justice. The Federal Circuit went on to reverse the claim construction of several elements because the construction improperly imported limitations from the specification or general arguments made by the applicant, and remanded the case.

New Rules Published for Claims Containing Alternative Language

On March 10, 2008, the U.S. Patent and Trademark Office published new rules regarding the examination of claims with alternative language. These rules can be found at http://www.uspto.gov/web/offices/com/sol/notices/73fr12679.pdf.

35 USC 121 Only Protects Divisional Applications, Not C-I-P's, From Double Patenting

Pfizer Inc., v. Teva Pharmaceuticals USA, Inc., [2007-1271] (March 7, 2008) [DYK, Michel, Kennelly] The Federal Circuit reversed the district court, and held that the asserted claims of U.S. Patent No. 5,760,068 were invalid based on double patenting, but affirmed validity, enforceability and infringement of U.S. Patent Nos. 5,466,823 and 5,563,165.
BRIEF: After a restriction requirement in the application that resulted in the '823 patent, Pfizer Pfizer filed a divisional application, which ultimately issued as the ’165 patent, that included the restricted-out composition claims, and a continuation-in-part application ("CIP"), which ultimately issued as the ’068 patent, that included the restricted-out method claims. Teva challenged the '068 as invalid for double patenting, and Pfizer responded that the patent was protected by the safe harbour of 35 USC 121. The Federal Circuit observed that Section 121 explicitly refers to "divisional applications," and held that the safe harbor, by its literal terms, protects only "divisional application[s]" (or the original application) and patents issued on such applications. The Federal Circuit also said that there is no suggestion, however, in the legislative history of section 121 that the safe-harbor provision was, or needed to be, directed at anything but divisional applications. The Federal Circuit concluded that the protection afforded by section 121 to applications (or patents issued therefrom) filed as a result of a restriction requirement is limited to divisional applications.