patents - university of chicagoblsa.uchicago.edu/upper class/patents-kieff2001.doc · web...

Class: Patents Professor: Kieff Book: Donald S.

Chisum, et al, Principles of Patent Law: Cases and Materials (University 1998 1st Ed) Term: Spring 2001

Table of ContentsI. Introduction------------------------------------------------------------------------------------------------------------------------- 1II. Procuring/Attacking a Patent-----------------------------------------------------------------------------------------------------1III. Disclosure------------------------------------------------------------------------------------------------------------------------- 2

A. Law or Fact 2B. §112¶1-2 2C. Enablement 2D. Best Mode 4E. Definiteness 5F. Written Description 5

IV. Novelty § 102---------------------------------------------------------------------------------------------------------------------7A. Introduction 7B. Loss of Right §102(b) 8C. Novelty §102(a)(e)(f)(g) 9D. Priority/Interferences §102(g) 12

V. Non Obviousness § 103-------------------------------------------------------------------------------------------------------- 14A. Introduction 14B. Graham Framework 14C. Scope of Prior Art 15D. Content of Prior Art 16E. PHOSITA 16F. Secondary Considerations 17G. Biotech 18

VI. Utility § 101–--------------------------------------------------------------------------------------------------------------------19VII. Statutory Subject Matter §101------------------------------------------------------------------------------------------------19VIII. Rights and Limitations of Patent Grant------------------------------------------------------------------------------------21

A. Introduction 21B. Rights Conferred____________________________________________________________________ 21

1. Temporal 212. Geographic 213. Indirect Infringment 22

a) Contributory 22b) Active Inducement 23

C. Limitations_________________________________________________________________________241. Misuse 242. 1st Sale, Implied License, Repair/Reconstruction 253. Experimental Use 264. College Savings 27

IX. Infringement---------------------------------------------------------------------------------------------------------------------27A. Introduction 27B. Claim Interpretation (Procedure and Sources 27C. Doctrine of Equivalents 30D. Prosecution History Estoppel 31E. Means-Plus-Function Claims 32

X. Remedies------------------------------------------------------------------------------------------------------------------------- 33A. Introduction 33B. Damages__________________________________________________________________________ 33

1. Lost Profits 332. Reasonable Royalties 343. Pre- and Post- Judgment Interest 354. Atty's Fees, Enhanced Δ's 35

C. Equitable Relief – Injunctions 36XI. Federal Circuit and Preemption---------------------------------------------------------------------------------------------- 38



I. IntroductionA. Patent is an absolute right to exclude

1. Can license or enjoin2. Can get damages for infringement

B. Vocabulary 1. New, Useful, Nonobvious2. Disclosure, Claims

C. No Right to Use 1. Can have overlapping patents

a) Patent 1: Chair with 4 legsb) Patent 2: Chair with 4 legs and wheels.

2. Patent 2 cannot be used without infringing patent 1.D. Goals/Incentives

1. Invention/innovation2. Disclosure3. Commercialization

E. Issues 1. Monopoly

a) Dead Weight loss from patent monopolyb) Price Discrimination legal, can cure

2. Rent Seekinga) Ineffecient for too many people to seekb) But imperfect substitutes, many people seeking different ways, can multiply benefit and not rent

seek3. Patenting too much

a) Can't patent principles, but can patent some building blocks1) DNA2) Genes

b) Cutting edge issue. FSK thinks current system of novelty, nonobvious, disclosure can cure problems, curb abuse.

II. Procuring/Attacking a patentA. Name of the Game is the Claim

1. Long sentences outlining metes and bounds of patented invention2. Can either be highly specific, with numbers, tolerances, etc.3. Or can be more general, making details in embodiments in spec.

a) You are your own lexicographer.b) TENSION – cannot import limitations into claims from spec. But you do define words using

spec. 4. Claim can limit with intent if purpose is way to get patent.

a) Method for curing baldness using XYZb) Not infringing to use XYZ for sweetening coffee.

1



B. Patent office responds to application – 1. Rejections get APA deference (for facts), but not, it appears, Chevron deference for law issues.2. Appeal – attack rejectsion

a) Show it's an issue of lawb) Or, face standard, pile on factual record and force PTO response to uphold.

C. Inequitable Conduct 1. "Intent to deceive"

a) Gross negligence alone is insufficient (Kingsdown Med. Consultant)b) Intent and materiality are necessary.

2. Incentive to be honest with PTO?a) Inequitable conduct will render patent unenforceable.b) Competitors have incentive to dig, and they WILL find all smut on your patent. Better to spend

a little $ up front, get a more limited patent that will survive an attack in court. c) FSK – Value is not GETTING the patent, it is KEEPING it after a court assault.

III. Disclosure - § 112A. Question of law or fact?

1. Best Mode – fact (substantial evidence)2. Enablement – law with underlying facts – in re Wright, In re Vaeck?3. Description – fact (clear error) – Fiers, Vas-Cath4. Definiteness – law

B. § 112 ¶¶ 1–2 outline the required disclosures to be made in the specification of a patent. The disclosure must satisfy three requirements, with ¶ 2 outlining the definiteness of the claims requirement1. written description requirement2. enablement requirement3. best mode requirementThe disclosure serves the dissemination & notice function of the patent system.

§112 ¶1:The specification shall contain a written description of the invention, and of the manner and process of making and using it, in such full, clear, concise, and exact terms as to enable any person skilled in the art to which it pertains, or with which it is most nearly connected, to make and use the same, and shall set forth the best mode contemplated by the inventor of carrying out his invention

C. Enablement 1. Disclosure must contain enough detail to allow one "skilled in the art" to repeat the invention

without undue experimentation.a) Serves the disclosure requirement, not so much the notice requirement.b) In re Glass shows this – not enough detail to allow others to duplicate.

2. Must also contain enough detail to support broader claims. Notice function, to let others know what you have actually patented. a) More significant in pioneer patents, a la Morse. He had not given enough detail in his

specification to allow him the broad patent claim of motive force at a distance.

2



b) Morse is not really about patenting principles. It also not about "downstream patents." The system doesn't object to blocking use of downstream patents right to exclude, not right to use.

3. Enablement is tested at time of issue of patent. When the patent issues, PHOSITA must be enabled by the patent's disclosure.a) Glass – must have sufficient detail that you can practice without undue experimentation. Glass

didn't provide enough conditions to actually practice it.b) Deposit cases.

1) Patent application relies upon biological material to be given to a public trust for release to interested people.

2) At time of patent application, no one can get material, not enabled.3) Doesn't matter – enablement not tested at time of application.

c) Glass – seems to confuse issue. 112's enablement serves two roles1) Teaching Disclosure – at time patent issues does public get it's part of bargain? a patent

that teaches PHOSITA how to practice the invention.2) Reduction to Practice Disclosure – The disclosure must make clear with detail that the

invention is technologically capable of being practiced.(A)This is true at filing date, and cannot rely on other applications pending, that issue after

filing date, to make this clear. This is what Glass was about!(B) This is more of a written description issue (below) than an enablement issue.

3) So Glass is really just objecting to lack of detail in description.4. Patent may rely on prior art teachings, however, that are obvious. TENSION with detail

requirements from Glass. a) Prior art must be available, not hidden 271(e) prior art.b) be careful.

5. Scope of the Claim supported by Prior Arta) Claims cannot cover things which are not enabled by the disclosure. In other words, a broad

claim that covers ABC is not supported by a disclosure that would only teach PHOSITA how to make A&B, but not C.

b) However, this determination is made based on the state of the Art at time of filing.1) Example, Hogan – claims covered A and C polymers, but the disclosure was old, and only

taught how to make C's. But the claim is measured against the art at filing, not at issue date.c) Problem is, that the front edge problem in (b), determined under 112, is different than the trailing

edge problem of court tests of scope for infringement. Should Hogan be allowed to sue A polymer makers for infringement? See DOE and PHE below on the trailing edge issues.1) Often the limits on the front end will determine limits on the back end.

6. Moral of the story – detail, detail, detail and examples.7. Cases

Cases Facts/Holdings PropositionOReilly v

Morse (162)"use of the motive power" of electromagnetism to print characters at any distances. Court finds claim too broad – claiming a principle.

Enablement - lack of detailMaybe wrong? We allow broad pioneer claims – telephone claims for contrast?DO WE REALLY HAVE A CONTINUING PRINCIPLE?

In re Glass (171)

Patent for vapor deposition of whiskers. No enablement – no examples or details in disclosure that would enable.

Enablement – lack of detailDisclosure must have detail to allow practice.

3



Hogan (184) Long ongoing patent app. Claims broader than disclosure enables b/c technology changed – amorphous v crystalline polymers. Disclosure sufficient at time of filing.

Enablement – Art tested at time of filing, disclosure must enable claim as of art at filing.

D. Best Mode 1. At the time of the filing, the specification must disclose the best mode of invention contemplated by

the inventor. 2 part test – subjective knowledge of the inventor at time of filing of a preferred mode of practice, and an objective test of disclosure of that mode in patent.

2. Subjective Test of Inventor Knowledge on Filing Datea) Inventor is the person listed on the patent application, not the assignee, or the company for whom

the inventor works.1) Glaxo – company knew of and used a superior azeotropic method for manufacturing Zantac

that was not disclosed in patent. Not a best mode violation b/c azeotrope was unknown to inventor himself. Cannot impute knowledge.

2) Criticism – creates artificial Chinese walls, incentives for strategery within Co's.b) No requirement to update best mode with subsequent knowledge during prosecution, even for

continuing applications. c) No requirement to reveal production details.

1) line drawing problem here. 3. Objective Test of Adequate Disclosure

a) Key here is determining whether the details involved are mere manufacturing choices or, in fact, a preferred embodiment.

b) Must look at the whole of circumstances (prior art, scope of invention, evidence as to inventor's belief, all circumstances) in order to determine whether the particular method "substantially improves the operation or effectiveness of invention" (Wahl Instruments), or "relates to the quality or nature of invention" (Great Northern) or is merely a production specification. .

c) Additionally, things routine in the art need not be revealed as well. 4. This is a test of the inventor, where as enablement is a more objective test of the art revealed.5. Cases

Cases Facts/Holdings PropositionGlaxo v

Novopharm (201)Patent attacked for not disclosing a preferred azeotropic method for purifying Zantac. "Inventor" didn't know of this, even though company did. Court literally interprets 112 – Mode not known to inventor, patent valid.

Best Mode – subjective test of inventor's knowledge at time of filing.

Wahl Instruments (214)

Egg timers using thermochromic ink manufactured with form not disclosed in Patent. Best Mode violation? Court says it’s a production specification, not a method substantially improving operation. Therefore, no best mode violation.

Best Mode – Routine Manufacturing Choice is not relevant to best mode, and must not be revealed.

Great Northern v Henry Molded Products (223)

diamonds were crucial to invention. Fails to be objectively disclosed.

Best Mode – 2 part test: Subjective test of inventor's knowledge of a best mode at filing, Objective test of sufficiency of specification's disclosure of the best mode.Production details are routine in art, or do not relate to quality or nature of invention

4



E. Particularly Pointing Out and Claiming (Definiteness) 1. § 112 ¶ 2

The specification shall conclude with one or more claims particularly pointing out and distinctly claiming the subject matter which the applicant regards as his invention

2. Requires claims to have definiteness. Can be a ground for invalidity3. BUT, AAI majority takes ¶2 as serving the NOTICE requirement, and reforms the claim to a

narrower meaning to serve the notice requirement rather than invalidate the patent.a) Nies concurrence rebukes this action, claiming it eviscerates ¶2

4. Moral: In analyzing definiteness, play up the invalidity versus notice/reform tension.5. Cases

Cases Facts/Holdings PropositionAthletic

Alternatives (AAI) v Prince

(250)

AAI's patent for offset stringing – distance varies "between" minimum and maximum distance. Does this require 2 or more distances, or 3 or more distances. Literal claim language and prosecution history unclear. Court goes to 112 – reads narrowly as 3 or more. No infringement.

Definiteness – Invalidity versus Reforming narrowly. Court reads 112 ¶2's definiteness as requiring narrow over broad reading. Alternative, it fails 112 and is invalid!!

F. Written Description 1. It is well-settled that the test for compliance with the description requirement is whether, as an issue

of fact, a person skilled in the art would reasonably conclude from the disclosure whose filing date is being relied on that the inventor had possession as of that date of the later claimed invention, and how the disclosure accomplishes this fact is unimportant. a) Why – to guard against inventor overreaching by insisting that he use sufficient detail that claims

be determined to be encompassed within the original creation.b) What to look for – "broad" claims

2. Need not describe the "heart" or the "gist" of the invention, as required by Easterbrook in Vas-Cath. The claims define the invention, and the description must convey with reasonable clarity that inventor had actually invented what is claimed.

3. Often confused with enablement – there is a lot of similarity. a) But enablement is about teaching and notice. Getting enough detail that PHOSITA can practice

the invention without undue experimentation. b) Written description is all about notice – show that you actually possess invention.c) Description requirements are a lot like Conception. See below

4. Description v definitenessa) Description is to cabin the inventor and shape his behavior in setting forth claimsb) Definiteness is to cabin others, and shape their behavior with notice of the extent of what is

protected. 5. Disclosure in 112 (description) versus in 102(b) (anticipation)

a) Disclosure describing a single embodiment of broadly claimed subject matter would anticipate the claim, but might not alone support description.

6. Biotechnology – a) Descriptions

1) DNA requires precise definition of structure, formula, or sequence. Not the method of acquiring.

5



b) Claims – 1) Biotech involves products in the body – cannot claim straight up, must include limitations

that overcome 102 concern (must be new)(A)"isolated doing XYZ"(B) "in conditions ABC"

2) Cannot describe a claimed compound or structure by its biological function.3) Example –

(A)"an isolated gene encoding human insulin" – invalid. Only describes the function: "encoding human insulin"

(B) "an isolated gene encoding human insulin, wherein the gene hybridizes to [nucleic acid sequence] under moderately stringent conditions"(1) Describes a specific structure and the physical conditions involved in producing.(2) Puts "risk" on inventor – must hybridize to specifically described structure under

specifically described conditions. The claim is definite, the description (we assume) gives a specific DNA sequence, is enabling, and doesn't claim too broadly a la Morse.

c) What is happening1) You want to claim a gene producing a protein;2) Describe it and claim it by with a complementary DNA sequence that will "stick"

("hybridize") to the gene under certain physical conditions (stringency)3) Science says

(A)There are many allelic different genes that still code for the desired protein(B) That these different gene sequences can still "stick" the described DNA sequence and

conditions. Some may have too many codon mismatches to stick under listed stringency.4) Gambles –

(A)Patentee seeks to find conditions and a given DNA sequence that will cover a lot of unnamed sequences coding for the gene, giving the claim breadth

(B) Others hope to find a gene sequence that codes for the desired protein but isn't sticky to the patent's described sequence under the described conditions.

d) How this fits1) Enablement is easy these days – can isolate genes that code for specific proteins. But with

the allelic differences, to simply claim a gene coding for a protein is too broad, and gives an inventor power of exclusion of things/sequences he hasn't yet invented! So enablement cannot weed out these patents.

2) So description must – we require inventors to describe with sufficient detail what the physical conditions are. Then we can test those conditions to see if they actually work, and test if he "possesses" the invention.

3) And it doesn't give overly broad protection, but it doesn't give too narrow protection (it covers some allelic differences)

4) And all of this helps with novelty, by not allowing people to patent shit in our body. Must be conditions such that it is a NEW invention. All in tension.

7. Moral – a) Watch claims broader than what is described. Even though one need not describe "exactly",

must make clear to PHOSITA that you do possess invention.b) Just because it enables, doesn't mean it describes

6



c) Biotech – must give a full DNA sequence to describe, even if it enables. Must have detailed limitations in claims.

8. CasesCases Facts/Holdings Proposition

Vas-Cath v Mahurkar (227)

Utility patent on double-lumen catheters. Description (from design patent) only pictures and diagrams. Finds adequet – conveys to artisans that inventor "possessed" invention at filing date.

Written Description – "Gist" in description irrelevant. Description must give notice that inventor has invention.

Fiers v Revel (321)

3-way interference on patents for β-Interferon. R fails to describe a DNA sequence. Fails description 112.

Written Description (biotech)DNA patents must disclose a complete sequence of claimed stuff in order to show "possession" of invention.DNA patents need limitations – "purified", in "conditions", "stringency X"

Regents UC v Lilly (326)

UC patents on insulin attacked in infringement. Claim fails to give specific DNA sequence.

Written Description (biotech)Description different from Enablement – can enable (known procedure) without describing.

G. Summary of Description 1. Enablement, Best Mode, Written Description, Definiteness2. Strong on offense = weak on defense; weak on offense = strong on defense.

IV. Novelty - § 102A. In the US – first to invent something new. With one year from public use for filing. 102 sets up a mine

field to be navigated.1. a, e, g is novelty. Question is showing the thing is unanticipated by prior art, both publicly

accessible and secret.a) Trigger date is date of invention. This is assumed to be filing date unless patentee can prove

earlier invention date2. b, c, and d is about loss of right. Basically, sit on your rights and you risk losing them.

a) Trigger date is filing date, with a critical date = one year prior to filing date.3. f is derivation did you steal it from someone else who really invented it.4. Question of FACT – reviewed substantial evidence or clear error.

• §102 Chart – of novelty bars to patentability§ Who What Where When

102(a)Third Party Knew or used invention USA Before date of invention

Third Party Described in printed publication; patented USA / Foreign Country Before date of invention

102(b)Inventor / third party Described in printed publication;

patented USA / Foreign Country More than one year before filing date of application

Inventor / third party Offered for sale; sold; publicly used invention USA More than one year before

filing date of application

102(c) Inventor Abandons invention USA ---------

102(d) Inventor Patents invention Foreign Country More than one year before filing date of application

7



102(e)Third Party Describes invention in an application

that is published under 122(b) USA Filed before date of invention

Third Party Describes invention in patent application that ultimately issues as patent USA Filed before date of

invention

102(f) Inventor Derived invention from Third Party USA / Foreign Country Before date of invention

102(g) Third party in an interference Invented invention USA/Foreign Country Before date of invention

B. Loss of Right – § 102(b) 1. Public Use Bar –

a) Invention in "public use" "in this country more than one year prior" to the filing date.b) Public Use = inventor gives or sells for one or more uses by another without any restriction.

Doesn't have to be open and apparent use. Can be private usage, but without restriction1) Egbert – corset springs are "private," but use was unrestricted – public use bar.

c) Use in public can be "private" under 102(b) if use is restricted, under control of inventor, for experimentation or perfection –1) American Nicholson Pvmt – public roadway controlled by inventor, for perfecting = no

public use bar.2. On-Sale Bar -

a) Invention "on sale in this country more than one year prior" to the filing date.b) On sale (from Pfaff) =

1) Subject to commercial offer of sale; and2) Ready for patenting, which means

(A) reduced to practice; or(B) Description that enables

c) Unclear from this test as to whether a description that meets enablement but fails description would be sufficient to invoke on-sale bar.

3. Moral – a) Don't sell, or offer for sell (Pfaff)b) Don't give it away (Egbert)c) Don't lecture on it.d) Control all access and testing (American Pvmt)


Egbert v Lippmann (349)

Infringement on patent for corset springs. Had made and shown to friends > 1 (or 2) years prior to patent application. Irrelevant that corsets are "private" item and that only a few uses. Public use bars patent

Public Use Bar – Public use only requires ONE use. And occurs whenever inventor gives/sells to another without for use without restriction, regardless of public or private nature of use.

City of Elizabeth v American Nicholson

Pavement (355)

Wooden pavement patent. Prototype installed on public highway for testing 6 years prior to filing. Very obvious and public use. BUTexperimenting is not public use.

Public Use Bar – Use by inventor or those under his control for experimenting or perfecting (restrictions on use) is not public use, regardless of public nature of usage. Intent controls.

Pfaff v Wells (S-1) Machine patent. Had been subject to sale more than one year before filing. But not > 1yr prior

On-Sale Bar {102(b)}– Test – subject to commercial offer of sale; ready for

8



to reduction to practice. Court finds on sale bar. patenting (reduction to practice or descriptions that enable)-does it satisfy written descriptions?-

C. Novelty – 102(a), (e), (f), and even (g) 1. The newness of inventions involves determining when the invention was "invented," determining

what the prior art for comparison is, and then comparing it to see if there is anticipationa) When = normally the filing date, but can be pushed back to reduction to practice, or even to

conception if followed by reasonable diligence to reduce to practiceb) Prior Art = printed publication that is sufficiently available anywhere in world, a patent filed

prior to invention that is published or issues in this country.c) Anticipation requires identity of each element of the claims plus enablement

2. Date of Inventiona) It's all about determining IF anticipatory art is, in fact, prior art.b) CR Bard : Normally filing date, pushing back requires showing conception plus reasonable

diligence towards reduction to practice, otherwise will be first reduction to practice.c) Conception: So clearly defined in inventor's head that PHOSITA could reduce to practice

without extensive research or experimentation.d) Evidentiary burden – inventor's testimony of conception requires corroboration. e) Sequence of date proof

1) Publication prior to filing date shifts burden of production to inventor2) Proof of earlier RTP or Conception + Diligence suffices3) Then, remains to prove by clear and convincing evidence (for this inter partes action) that

publication is actually prior to inventionf) Biotech –

1) Genes pretty much require reduction to practice in order to have conception.2) Conception requires a detailed understanding of the structure and properties of the gene,

which cannot be done unless it has been isolated, which is reduction to practice. Amgen.3. Identity of Invention

a) It's all about determining IF prior art does, in fact, anticipate.b) Anticipation by prior art requires that a single prior art piece contain each and every element of

the claim in question (literally or inherently) 3M v J&J1) Inherency (Glaxo v Novopharm, District Court)

(A)"In order for a claim to be inherent in the prior art, it is not sufficient that a person following the disclosure sometimes obtain the result set forth in the claim, it must invariably happen."

(B) So, things in the claim that always flow naturally from the prior art's disclosure are inherent.

c) Additionally, the prior art must ENABLE the invention. Paulson 1) Enablement based on what is in the prior art, but is measured based on state of the art at time

of new application.2) Even if art doesn't enable, but contains all other elements, it may be obvious under 103.

d) Anticipation = Infringement: That which would literally infringe if later in time anticipates if earlier in time. Lewmar Marine.

9



e) Genus / Species – prior art disclosing species will anticipate genus. 4. "Known or Used" under 102(a)

a) Public Disclosure/Use – doesn't require open and notorious use (see Egbert), simply that it is not secret or is in the usual course of use of that thing.

5. "Patented or Described in a Printed Publication" under 102(a) and (b)a) Focus of the inquiry is whether the publication is sufficiently accessible, and what is the date

upon which the publication became accessible.b) Printed = that which is available to the public in tangible formc) Indexed and catalogued by accessible means, like subject, and available on shelves is sufficient.

Hall.d) Indexed separately and by author, and not on shelves is NOT sufficient. Cronyn.e) NOTE, the public accessibility concerns in TENSION with making secret prior art available for

both novelty and obviousness bars. 6. Secret Prior Art – 102(e)

a) Patent applications are generally kept confidential by the PTO under § 122(a). Therefore they are not known or publicly accessible. Would seem to fail as prior art, but are allowed to be so under 102(e)1) Recent changes to 102(b) state applications will be published after 18 months2) Unless they aren't pending or are under some secrecy order.

b) Yet such applications can be prior art as of their filing date if the patent eventually issues (or is actually published under 122(a)).

c) Alexander Milburn (454) – 1926 Sup Ct Holmes opinion establishing patent app's as prior art.d) ONLY US patent applications.

1) But Provisional applications? Nothing prohibits in statute, but they cannot issue as patents, so it might seem they should be forbidden. (A)BUT, what if provisional app is published? Hmmm. . .

e) ONLY the disclosure. If there is claim identity, interference time under 102(g)7. Secret Prior Art – 102(g) –

a) 102(g) as it was, was clearly intended only for determining priority in interference contexts between dueling applications for same invention.1) But has been used as a defensive attack on validity in infringement actions.2) An earlier invention by an inventor who never applied for a patent, but who did not abandon,

suppress, or conceal the invention, can serve as prior art under 102(g)3) NOTE – there is no publicity requirement, no publication, no known or used. BUT, unlike

102(a), there is a continuous use requirement.b) Thompson : FN3 - can extend 102(g) to normal infringement under previous 102(g) even though

clearly not intended to do so by the writers of the statute. Only intended for interferences.1) Has changed – now statute specifically requires context of interference. What will this mean

is unsure?

10



8. Derivation – 102(f)"he did not himself invent the subject matter sought to be patented"

a) Seems a lot like the (g) use – you have a prior inventor and no application. But here we are think that the patentee actually GOT the idea from this prior inventor, unlike the independent prior invention of 102(g).

b) Showing derivation1) Prior conception by another2) Communcation of idea (enabling communication) to patentee.

(A)A communication that makes the invention obvious is insufficient (Gambro Lundia). Communication must enable the invention.

(B) Would "disclosure" suffice? as implied by GL?9. Cases

Cases Facts/Holdings PropositionMahurkar v CR

Bard (418)Double-lumen catheter. Catalog shows invention 3mos < filing. Inventor has to prove date of invention < catalog date. Did so.

Novelty - date of Invention – Publication < filing shifts burden of proving earlier date of inventionInvention = conception + reasonable diligence in reducing to practice. Often shown simply by RtoPConception = So clearly defined in inventor's head that can be Reduced to Practice without extensive research or experimentation. – analogous to written description

3M v Johnson & Johnson (423)

Orthopedic casting tape – patent on slipperiness of tape. Prior art mentions similar materials, but in different amounts, forms, and for different purposes. No anticipation

Novelty – identity of inventionTo anticipate, prior art must show each element of claim at issue.That which will literally infringe later will anticipate earlier.

Paulson (425) Portable Computer Patents anticipated by portable calculator patents.

Novelty – identity of inventionTo anticipate, prior art must show each element of claim PLUS enablementEnablement of anticipatory reference is tested with its disclosure in light of CURRENT state of art.

Hall (440) Patent anticipated by a doctoral thesis in Germany. Court finds a single cataloged thesis in FRD sufficient to 102(b) the application.

Novelty – printed publication bar under 102(b). Publication must be sufficiently available to the public interested in the art more than one year before filing date.Part of general index, catalogued, and on shelf = sufficient for 102(b) eligibility

Cronyn (443) 3 Undergrad theses as 102(b) bar. Found not sufficiently available to bar.

Novelty – Printed Publication Bar under 102(b).Dissemination and Public Accessibility are key. Publications not generally indexed by subject, catalogued, or shelved are not sufficiently available.

Thomson (hdout) 102(g)- can use secret proof of prior inventorship as prior art in infringement. Under OLD 102(g).

Alexander Milbourn Co. v Davis-

Bournonville (454)

Patent application C filed prior to W is unknown to W as prior art. Can it bar W? Yes. Predates 102(e)

Secret Prior Art under 102(e) – Prior filed patent applications can be anticipatory prior art as of date of application if

- published under 122(b)

11



Cases Facts/Holdings Proposition- it issues as a patent

Gambro Lundia v Baxter Healthcare

(479)

Hemodialysis patent. Trial court incorrectly says communication must make invention obvious. Court corrects – must enable. Also says must disclose – unsure if they have confused issue.

Derivation – 102(f). Requires prior conception and communication to patentee. Conception requires corroboration, and communication must enable (make obvious not sufficient).

D. Priority/ Interferences – § 102(g) 1. US is first to invent, not first to file. Second to file can get a patent if he was first to invent;

determining priority is in an interference. The general priority rule isa) First to reduce to practice is first to invent; b) If you are second to reduce but first to conceive, and you use reasonable diligence in reducing to

practice from a time JUST BEFORE THE CONCEPTION of the first RPT'er, then you get priority.

c) But if your (continuous) reasonable diligence did not begin until after the second conception, or if you abandon, suppress, or conceal the RTP'd invention, then second inventor (first RTP'er) will win.

2. Conceptiona) Rule

1) Formation in mind of definite and permanent idea of complete and operative invention. Mergenthaler.(A)"definite and permanent": when inventor has a specific, settled idea, a particular solution

to a problem at hand, not just a general goal or research plan. BUT inventor need not know invention will work. Burroughs-Wellcome.

(B) However, a conception that is factually uncertain enough to undermine the idea such that it is no longer "definite and permanent" is not conceived. Smith v Bousquet.

(C) So experimentation is a factual situation on conception. How certain is the idea? Why are you experimenting. The AZT trials in BW did not undermine the idea, and therefore did not undermine conception.

2) Idea so clearly defined in inventor's mind that only ordinary skill would be necessary to reduce to practice, without extensive research or experimentation. Mahuyrkar v CR Bard.

3) In Biochem – one has a mental picture of structure of chemical, its physical and chemical properties, or whatever characteristics sufficiently distinguish it – but not solely by the biological function. Amgen.

b) Conception, as a mental act, requires corroboration.1) Corroboration – evidence of a contemporaneous disclosure that would enable one skilled in

the art to make the invention. BW.2) Sufficiency of corroboration analyzed under rule of reason.

c) §104? What's up with this.

12



3. Reduction to Practicea) Actual RTP –

1) When the invention is physically made & tested, and is shown to be suitable for its intended purpose.

2) OR, testing outside of its intended environment can be sufficient is it is tested in conditions "sufficiently similar" to "intended environment." DSL v Union Switch.(A)Coupler mount assemblies tested on caboose found sufficient to use on actual rail cars.

DSL.3) Must be corroborated. Lab notebooks, independent witnesses, affidavits of observers.

b) Constructive RTP – When the patent application is filed, regardless of whether anything is built.4. Abandonment, Suppression and Concealment

a) Unitary concept focusing on failure of inventor to apply for patent or commercialize or both. Figurative "putting in a drawer and forgetting about it"

b) Factors in determining1) Period of delay2) Existence and nature of any activity in delay period3) Cause of resumption of activity.

-CHISUM ON PATENTS

5. Diligencea) Period in question – a time just prior to the first-RTP'ers conception date till the time of the

second-RTP'ers actual or constructive RTP.b) Need not be showing of constant effort. But must account for ENTIRE period, and show pursuit

of goal in a reasonable fashion.c) Valid excuses for inaction

1) poverty or illness of inventor2) obligations of inventor's regular employment3) excessive workload of inventor's patent attorney.


Fiers v Revel again (485)

3-way interference on patents for β-Interferon. F claiming priority by conception under 102(g). Court rejects method of preparation as sufficient to show conception.

102(g) – since modified.conception analogous to description language above – see CR Bard. Conception more = description, and different from enablement.

Burroughs Wellcome v Barr

Labs (489)

AZT patents. BW used NIH labs to test drugs prior to patenting. Was invention fully conceived before or after testing? Before – one need not know invention will work, only have a particular solution at hand. AZT was certain enough: knew structure, function, synthesis.

Conception – for priority - an idea definite and permanent enough that PHOSITA could understand the invention; it is a particular solution to a problem at hand, not just a general research plan; but inventor need not know that invention will work

Smith v Bousquet (in BW)

A conception that is factually uncertain enough to undermine the specificity of the idea is not definite and permanent enough to be "conceived." NOT a rule that science is indefinite and requires simultaneous conception & reduction to practice.

DSL v Union Switch Coupler mount assemblies for train cars – Reduction to Practice, actual –

13



Cases Facts/Holdings Proposition(507) interference- test of embodiment on cabooses was

not how they were to be used, on regular rail cars. But such test sufficiently simulated actual environment to be a satisfactory actual reducation to practice.

1) embodiment relied upon as evidence actually worked for its intended purpose; or2) tests performed outside the intended environment if conditions are sufficiently similar to the intended environment

V. Non-obviousness – §103A. Introduction A patent may not be obtained though the invention is not identically disclosed or described as set forth in section 102 of this title, if the differences between the subject matter sought to be patented and the prior art are such that the subject matter as a whole would have been obvious at the time the invention was made to a person having ordinary skill in the art to which said subject matter pertains.

1. On top of NEWness requirement, want to prevent those skilled in art from patenting that which was JUST ABOUT to happen based on existing art – that which is obvious.

2. Originated with Hotchkiss – inventor must display "more ingenuity and skill" than that possessed by the "ordinary mechanic."

3. Cuno test - 1941 – invention must be a "flash of creative genius."4. A&P test - 1950 – the whole of the invention must be more than the sum of its parts. "Synergism"

requirement.5. QUESTION OF LAW – reviewed de novo, with UNDERLYING FACTS (Graham factors)

reviewed for clear error or substantial evidence.B. Graham Framework

1. Graham v John Deere . Gives us the Graham factors – Court must make factual inquiries of a) Scope & Content of the Prior Artb) Differences between prior art and claims at issuec) Level of ordinary skill in art

1) Against this bkgd, obviousness of the subject matter is determined2) See D. below for actual test - Dow Chemical Test - 2 part test

(A)Would the prior art have suggested to those of ordinary skill in the art that they should make the claimed composition or device, or carry out the claimed process; and

(B) Would the prior art have also revealed that in so making /carrying out, those of ordinary skill would have a reasonable expectation of success.

2. Secondary Considerations that give light to circumstances surrounding origin of subject matter. Courts must consider this or risk reversal.a) Commercial successb) long felt but unsolved need(s)c) failure of others to do this.

3. This framework first established by Giles Rich in the Kettering Speech (564)

14



Cases Facts/Holdings PropositionGraham v John

Deere (535)Pioneer non-obviousness case after 1952 Act. Overturned Cuno's "flash of creative genius," A&P's "synergism," and Hotchkiss's "more ingenuity and skill than an ordinary mechanic." Created Graham factors.

Nonobviousness - § 103 – Graham factors, determine1) Scope & Content of Prior Art2) Differences between prior art and claims at issue3) Level of ordinary skill in the artAgainst this background, determine obviousness using 103.

C. Scope of the Prior Art 1. Analogous / Non-Analogous Art

a) 102 is the source for prior art, but not all prior art can be used. Only art that is analogous to the subject matter sought to be patented can be used for 103 determination. Fairness inquiry – none of the art is identical, and usually it must be combined, so we must seek to limit art to that which we expect an inventor to be aware of.

b) Test of analogous – In re Clay (570)1) Field Analogous – "product-function" approach – art from the same field of endeavour,

regardless of problem at issue2) Problem Analogous – "problem-solving" approach - art not from within same field of

endeavor, but is "reasonably pertinent to the particular problem" at issue. 2. §§ 102/103 Prior Art

a) The prior art for 103 determination is 102 prior art. Whatever is available for 102 novelty determinations are available for 103.1) 102(f) – OddzOn – Secret prior art on derivation is also available for 103 obviousness

determinations.2) 102(g) – Also available as prior art for 103. Need not have any personal knowledge of prior

art, nor be public in any way. Kimberly-Clark, DuPont v Phillips. (591-92).b) 102(f)/103

1) Scenario – X obtains information about an invention from Y, but it is an incomplete communication. Doesn't enable, but makes it obvious in light of other art. (See Gambro Lundia) So alone, it is insufficient for 102(f) derivation. But it can be 103 use in combo with other art. OddzOn.

c) Common Ownership –103(c)1) When prior art subject matter and claimed invention are owned by the same person or

assigned (or to be assigned) to same person, then 102(f) & (g) prior art CANNOT do a 103 obviousness invalidation.

3. Process to determine WHAT is prior art under 103 –a) First Level – All Prior Art valid under 102 creates "pool" of available art.b) Second Level – Analyze for Analogous / Non-analogousc) Then, must examine content of prior art, as below.

15




In re Clay (570) Patent on gel in oil tank deadspaces challenged on art using gel in underground deposits. Court won't compare art, finds it not analogous.

Prior Art for 103 must be analogous1) Is art from same field of endeavor, regardless of problem?2) If not within the field of endeavor, is it "reasonably pertinent to the particular problem" at issue.

In re Paulson again (573)

Portable Computer patent – hinge patents are analogous because pertinent to problem at issue – how to hinge halves of computer.

OddzOn Products v Just Toys (593)

102(f) prior art can be used in combination with other prior art to make an invention unpatentable under 103. Secret prior art can render obvious.

D. Content of Prior Art – teaching to or teaching away. 1. Dow Chemical Test - 2 part test

a) Would the prior art have suggested to those of ordinary skill in the art that they should make the claimed composition or device, or carry out the claimed process; and

b) Would the prior art have also revealed that in so making /carrying out, those of ordinary skill would have a reasonable expectation of success.

c) This is the "teaching to" idea. Without this "suggestion" there is no obviousness. 2. Source of the "teaching to" suggestions – Pro-Mold

a) From references themselvesb) From knowledge of those skilled in the art that certain references are known to be of special

interest in the particular field.c) From the nature of the problem to be solved, leading inventors to look to references relating to

possible solutions to that problem.3. "Reasonable Expectation of Success"

a) NOT "obvious to try" explicitly. But note that any thing that is 103 obvious would have been obvious to try. "Obvious to try" fails when there is a known process which would have to be tried with a total variance of all parameters.

4. No Hindsighta) Island analogy – If an invention is like an island, the proper test for obviousness is to stand on

the shore and ask if it is obvious where the island is.b) Do NOT ask whether a person standing on the island would find it obvious where the shore is.

5. Teaching Awaya) The opposite of the "suggestions" that create obviousness would be prior art that is not even

silent, but rather discourages PHOSITA from combining references such that they get the claimed subject matter.

6. Cases – none assigned.

E. PHOSITA – Person Having Ordinary Skill In The Art 1. The question is what is the level of skill of PHOSITA? How much does he know?

a) We presume full knowledge of the relevant art

16



b) Learned Hand – "Impute to [inventor] knowledge of all that is not only in his immediate field, but in all fields nearly akin to that field."

2. Workshop Test (Winslow) – kind of art.a) For obviousness, imagine the inventor in his workship with the prior art he is presumed to know

hanging on the walls around him. To solve his problem, he looks around at the art for a solution, and if the solution to his problem would be obvious from the art hanging around him, it fails 103.

b) Antle modifies – emphasize that PHOSITA knows everything that is around him (key is selection of the prior art), but the art involved must be art he would have selected without hindsight.

c) Thus, we presume the inventor has the ability to select the relevant art from his field and other fields pertinent to the problem which would be expected of a man of ordinary skill in the art to which the subject matter pertains.

d) Who is PHOSITA – what is "ordinary" – factors to determine ordinary. (Environmental Designs)e) Educational level of the inventorf) Type of problems encountered in the artg) prior art solutions to those problemsh) rapidity with which innovations are madei) sophistication of the technologyj) educational levels of workers in the field.


Winslow (612) Workshop Test – inventor sitting in workshop surrounded by all analogous prior art hanging on wall, he knows all of it. Then do obviousness determination. - Shows can combine art.

Antle (613) Teaching Test – Would PHOSITA have selected that reference without hindsight? Combining art for 103 requires some element of teaching towards combining.

F. Secondary Considerations (Graham) 1. Secondary Considerations that give light to circumstances surrounding origin of subject matter.

Courts must consider this or risk reversal. This framework first established by Giles Rich in the Kettering Speech (564)a) Commercial successb) long felt but unsolved need(s)c) failure of others to do this.

2. Commercial Successa) Assertion – I am the first commercial success. If my patent is so obvious, why didn't any of my

competitors have commercial success with this product given the significant consumder demand.1) Perhaps specious. Assumes commercial success is due solely to the innovation/invention,

and that commercial success is perceivable before the development, and that given this perceived demand others tried and failed to make the invention, and the patentee is the first to reduce to practice.

17



b) Nexus Requirement – must show a "nexus" between the commercial success and the merits of the invention to make commercial success persuasive. Not as stringent as a "direct result" connection requirement.

3. Long Feld Unsolved Needs & Failure of Othersa) Assertion – People have been clamoring for this invention, and others have failed to find the

solution before me. Therefore my invention can not be obvious or someone would have already invented it in light of the strong demand.

b) Problem –1) Assumes firms can identify a need and are willing to commit to it.2) Identifying the Need – The more narrow the need can be defined (a big HINDSIGHT risk)

the more obvious it becomes. A need for a precise product always makes the product obvious

3) Actual Failures – Need and Failure are done OBJECTIVELY – based on hypothetical total knowledge. Real inventors don't have total knowledge or total access to the art. So there is a disconnect between this objective world and the real world where inventors miss legally obvious inventions.

4. Miscellaneousa) Copying – when a competitor copies a patent after trying to design around the patent is a sign of

nonobviousness.b) Licensing/Acquiesence – Patentees assert that acceptance of a license is implicit recognition of

validity and nonobviousness. Weak.5. Cases – none assigned

G. Biotechnology 1. Two Lessons in cases assigned

a) Obvious to Try a method of isolating DNA falls into the category above of parameter blast trials that cannot invalidate under 103 – Amgen1) If product wasn't known2) No reasonable expectation of success

b) A general knowledge of methodology utilized to isolate nucleic acids encoding desired proteins is not enough to render a claimed nucleic acid sequence obvious in light of knowledge of the partial amino acid sequence of the protein.1) A patent on a chemical entity in structural terms requires that the prior art suggest the

claimed compounds – Deuel. What is not contemplated in the prior art method disclosed cannot say to have been conceived.

2) Reason – degeneracy means there are a vast number of nucleotide sequences that code for a specific protein. Different than isomers and analogs in other areas – The sequence is not obvious from the protein's amino acid sequence because the sequence doesn't lead in reverse to ONE STRUCTURE(A)One nucleic acid gives only one protein.(B) But one protein can have many different coding nucleic acid sequences.

18



2. Cases - Cases Facts/Holdings Proposition

Amgen (680) Gene patent attacked as obvious in light of known methods for isolating DNA from known gene libraries. Finds it not obvious because there was no reasonable expectation of success.

Obviousness a question of law."Obvious to try" does not make a resulting structural claim obvious when result wasn't known, nor was a reasonable expectation of success.

Deuel (694) Biotech – General method of isolating DNA is not relevant to whether specific molecules isolated are themselves obvious unless there is teaching as to a compound that suggests claimed DNA.

VI. Utility - §101A. Introduction

1. § 101 requires a "new and useful" invention. What is this utility requirement?2. What is the proper function of 101 compared to 102/103?

a) A narrowing function, like a funnel? This would see utility as a minor hurdle.b) An equal test – rigorous hurdle for meeting patentability.

3. Question of FACTB. Brana two part test of utility

1. PTO has burden of challenging a presumptively correct assertion of utility in a description2. If PTO provides evidence that PHOSITA would reasonably doubt the asserted utility, burden shifts

to applicant. C. Pharmacological products/intermediates –

1. In vitro and animal testing were previously insufficient to demonstrate utility. Now they are sufficient to show pharmacological activity.

2. Expressed Sequence Tagsa) Partial DNA sequences that are valuable for expressing a specific protein, but that do not reveal

the gene or protein.b) PTO allowed patents on EST's in 1997 based on utility as probes for larger DNA sequences.c) Heller & Eisenberg – tragedy of the anticommons – blocking of downstream patents by partial

sequence patents on building block materials1) FSK finds unconvincing. All pioneer patents are roadblocks to USE, but never to

downstream patents. 2) Counter – speed of market perhaps unprecedented. Slowing more damaging, risks pileup

monopolies of patents in few hands?D. No cases assigned

VII. Statutory Subject Matter - §101 A. Introduction

1. The kinds of things that can be patented under 101 fall in four classes: processes, machines, manufactures, or compositions of matter.

2. Supreme Court broadened in Chakrabarty – "anything under the sun made by man," "products of human ingenuity."

19



3. Limits – no laws of nature, ideas, or things that exist in nature. These can also be characterized as failing under basic utility, novelty barriers.a) But note!! Generic algorithms and ideas often ARE patentable when they get applied to specific

problems, a la State Street, the Option Pricing algorithm. b) Raises the same question as utility above, which is whether this is really a test of its own.c) Living things CAN be patented. Chakrabarty.

B. Cases distinguished by Chakrabarty that represent old ways of thinking on this. 1. Funk – discovery of a bacteria on a root nodule capable of inoculating certain plants.

a) Not a living thing ban, b) Instead – Purely a discovery of something existing in nature.c) In Chakrabarty, creation of something not found in nature.d) Can patent things found in body (DNA) if you add conditions, isolation.

2. Flook – a) Not a ban on extending patent protection into new technologiesb) Ban on abstract ideas – no usefulness.

C. State Street – Margin issues of patentability of applied ideas. 1. Seminal case – overturned judicial restriction on business methods patents. Reaffirmed

mathematical algorithm ban.2. Business methods that involve something useful, concrete, and tangible are patentable. 3. AND court finds financial information is such a thing, and an idea tha manipulated this information

usefully is patentable. 4. Alappat – oscilloscope rasterizer transforms data into visual waveform on a screen. Patentable5. Arrhythmia – Manipulation and analysis of EKG heart data to determine if patient suffering

arrhythmia – patentable. 6. MORAL

a) BM is not a viable exception. The barrier is the algorithm exception. To overcome that, we need an idea that manipulates/represents something tangible (money, heart beats, visual waveform) and has a use.

b) The patent is limited. The algorithm is only patentable within the limitations of the specific concrete application at hand.

D. Cases Cases Facts/Holdings Proposition

Diamond v Chakrabarty (772)

Oil-eating bacteria rejected as non-statutory matter – living things unpatentable. Court finds it nonnaturally occurring composition of matter, and patentable. Living v non-living irrelevant rather, products of nature and products of human ingenuity.

Statutory Subject MatterA product of human ingenuity, markedly different from anything found in nature, meets the statutory requirement of the Code.Relevant distinction is product of nature v product of human ingenuity.

State Street Bank v Signature Financial Group (12-Supp)

Business Method Patents are okay. Business Methods are okay. No such thing – all can be examined under 101,102,103,112 issues.Algorithms alone are still unpatentable. They fail utility – in abstract are not useful.Useful, concrete, and tangible subject matter is patentable. And financial info meets this.

20



VIII. Rights & Limitations of Patent GrantA. Introduction

1. § 154 gives patent rights to patentee2. § 271 gives right of action against infringers3. Rights of exclusion: making, using, selling, offering for sale, and importing.4. Infringement can be literal or under the Doctrine of Equivalents5. Causes of action for infringement can be direct or indirect.

B. Rights Conferred 1. Temporal – 20 years from date of filing.

a) Fixes Lemelson-esque submarine patents from long-term prosecutions.b) Like the plastic interference patents.c) Pre-issuance Activity

1) There are no rights prior to issuance of a patent. National Presto. Increasing production of accused product upon learning of application led to no liability.

2) BUT, §154(d) gives Provisional Rights to pending applications that eventually issue as a patent(A) Infringer must have actual notice of a published application (under 122)(B) No injunctive relief, but can get "reasonable royalty".

d) Post-expiration activity1) Again, generally no rights after patent expires, and attempts to extract $ for patent after

expiration is frowned upon (see Brullote)2) What about preparatory activity to ramp up for patented activity to begin immediately upon

expiration of patent?(A)Joy Technologies – Fed Cir lifted a District Court injunction against contracts for

building plants that would perform the patented activity, but wouldn't be completed until after patent expired.

(B) BUT, Paper Converting Machine – Fed Cir found infringement when D made parts for patented machine, tested partial machine, and delivered parts to customer for assembly after patent grant.

3) AND, Kearns Wiper Cases implies that Court lacks any power to grant injunction after expiration of patent for activity during patent term.

2. Geographic Scope of Patent Grant.a) 154 gives rights in US. Activity in foreign country alone not covered – isn't infringing. But

import and export activities are covered.b) Foreign Activity and EXPORT control – 271(f)

1) Congress, in 1984, passed 271(f) – (f)(1) Whoever without authority supplies or causes to be supplied in or from the United States all or a substantial portion of the components of a patented invention, where such components are uncombined in whole or in part, in such manner as to actively induce the combination of such components outside of the United States in a manner that would infringe the patent if such combination occurred within the United States, shall be liable as an infringer.

(2) Whoever without authority supplies or causes to be supplied in or from the United States any component of a patented invention that is especially made or especially adapted for use in the invention and not a staple article or commodity of commerce suitable for substantial noninfringing use, where such component is uncombined in whole or in part, knowing that such component is so made or adapted and intending that such

21



component will be combined outside of the United States in a manner that would infringe the patent if such combination occurred within the United States, shall be liable as an infringer.

2) Designed to repeal the Deepsouth ruling. No more can a patented machine be shipped in parts outside US for assembly and use. Standard is active inducement, and if the activity had occurred in US would it have been infringement.

c) Foreign Activity and IMPORT control – 271(g)1) Obviously, the use of a patented invention is infringement, period, regardless of where it

came from. But there are two new issues surrounding importation: the act of importation itself, and the importation of an unpatented product that is made by a patented process.

2) Importation itself - § 154(a) amended to add exclusion of importation of patented items to bundle of rights. So importing is an act of infringement.

3) Product of Patented Process:(A)271(g) prohibits the inmportation of a product (even if unpatented) of a patented process.

The exception is if it is materially changed by subsequent process before importation. (g) Whoever without authority imports into the United States or offers to sell, sells, or uses within the United States a product which is made by a process patented in the United States shall be liable as an infringer, if the importation, offer to sell, sale, or use of the product occurs during the term of such process patent. . . . A product which is made by a patented process will, for purposes of this title, not be considered to be so made after--

(1) it is materially changed by subsequent processes; or (2) it becomes a trivial and nonessential component of another product.

(1) Congress chose "materially changed" language over restricting infringement to products made "directly" from patented process. Thought it was too restrictive, and could be interpreted too broadly by courts.

(B) Lilly v Cyanamid – the court found the change in an intermediate compound (6) to final antibiotic a material change. (1) Test is the substantiality of the change. And a substantial change in physical,

chemical properties, and utility qualifies.(2) Lilly wanted material change only if there are other principal uses of the patented

product OTHER than the resulting end product. (3) Concurrence – purpose of statute is protection, and this decision makes patents on

chemical intermediates worthless. Advocates a Lilly-like interp. No other commercial utility other than final product = no material change.

d) CasesCases Facts/Holdings Proposition

Eli Lilly v American Cyanamid (905)

A change in intermediate's chemical structure to yield drug with different properties is a "material change" that avoids 271(g)'s import restriction on product of patented process

271(g) – illegal to import the product of a patented process unless the product is materially changed before import.2-part test on no material change: 1)Not commercially viable to make a product but for the patented process; or 2) Add'l steps do not Δ phys/chem. prop's in manner which Δ's basic utility of product.

3. Indirect Infringementa) Contributory Infringement - §271(c)

271(c) Whoever offers to sell or sells within the United States or imports into the United States a component of a patented machine, manufacture, combination or composition, or a material or apparatus for use in practicing a patented process, constituting a material part of the invention, knowing the same to be

22



especially made or especially adapted for use in an infringement of such patent, and not a staple article or commodity of commerce suitable for substantial noninfringing use, shall be liable as a contributory infringer.

1) First Case to recognize, was Wallace v Holmes – Patent on lamp+chimney, infringer sold a lamp without chimney, but chimney was readily available separately.

2) Elements(A)There must be underlying actual infringement to support contributory infringement. Aro

Mfg.(B) Selling "parts" that are a "material part" of an infringing product is one element.

(1) Question is, if there are some other uses, but the primary use is in infringing product, is it contributory? Saxe v Hammond would imply no.

(2) 271(c) says if it is a staple article, or has a "substantial noninfringing use" than it is not contributory.

(3) The noninfringing use must not be farfetched or illusory(4) AND EVEN if there is a significant noninfringing use, the knowledge that the

component IS TO BE USED by owner of infringing product will(C) Must show that the alleged contributory infringer knew that the combination for which

his component was especially designed was BOTH patented and infringing. Aro Mfg II.(1) "knowing the same . . . adapted for use in an infringement of such patent."

b) Active Inducement - § 271(b)271 (b) Whoever actively induces infringement of a patent shall be liable as an infringer.

1) Must show two elements(A)Direct Infringement(B) Intent to cause the infringing acts (Bausch & Lomb)

(1) BL seems to require specific intent, but it is unclear from other cases what level of knowledge of infringement would suffice.

(2) Designing the product purposefully for use in a patented method? Probably sufficient.

2) Defenses - (A)Disclaimers about not using product in a certain way can insulate,(B) Except- if product specifically designed for infringing use, may not protect

(1) Or if other evidnce overcomes the disclaimer, like the CB antenna case (Wells v LaPoint) where Customer Service told customers to do what is warned against in order to get patented results.

c) CasesCases Facts/Holdings Proposition

Aro Manuf. v Convertible Top

(926)

Convertible Top replacements. Unless consumer use of replacement tops is direct infringement, the manufacture and sale of tops cannot be contributory infringement.

Contributory Infringement –Requires an underlying DIRECT infringement.

HP v Bausch & Lomb (929)

BL's indemnity against infringement to purchaser is not active inducement without specific intent.

Active Inducement-Requires specific actual intent to cause the acts which constitute the infringement.Indemnity CAN create inference of intent when primary purpose is to overcome patent law's deterrent effect on

23



would be infringers.

C. Limitations 1. Misuse Defense & 271(d)

(d) No patent owner otherwise entitled to relief for infringement or contributory infringement of a patent shall be denied relief or deemed guilty of misuse or illegal extension of the patent right by reason of his having done one or more of the following: (1) derived revenue from acts which if performed by another without his consent would constitute contributory infringement of the patent; (2) licensed or authorized another to perform acts which if performed without his consent would constitute contributory infringement of the patent; (3) sought to enforce his patent rights against infringement or contributory infringement; (4) refused to license or use any rights to the patent; or (5) conditioned the license of any rights to the patent or the sale of the patented product on the acquisition of a license to rights in another patent or purchase of a separate product, unless, in view of the circumstances, the patent owner has market power in the relevant market for the patent or patented product on which the license or sale is conditioned.

a) Antitrust shaped certain limitations on patent licensing1) Walker Process cases – fraudulent procurement.

(A)Argus Chemical – the level of conduct that makes a patent unenforceable is less, however, then that necessary to support a §2 Antitrust claim.

2) Handgards cases – bad faith enforcement3) PRE – sham litigation suits that are objectively baseless and subjectively ill intentioned.

b) Patent Misuse arose similarly, but as an equitable defense to attempts to extend patent grant's scope. 1) Went to extreme, and swallowed almost all forms of contributory infringement2) '52 Act attempted to push back the misuse doctrine.

c) The Supreme Court in Dawson Chemical found that the combination of 271(c) and (d) limited the use of the patent misuse doctrine.1) 271(c) outlines what constitutes contributory infringement (see above); with special emphasis

on selling a material part of an invention, knowing it is especially adapted for infringement, and is NOT a staple of commerce with substantial noninfringing use.

2) 271(d) then statutorily excludes from misuse any behavior by the patentee that would be CI if done by another. Therefore, a patentee can sell or license things not a staple of commerce that are especially adapted for use in the patented invention.

3) PLUS – recent addition of 271(d)(5) excludes tying from misuse unless there is "market power in the relevant market."

d) This overrules the extremely expansive misuse doctrine under Mercoid1) Which said, any attempt to control the market for an unpatented good using the patent is

misuse, even if the goods have no use outside the patented invention (pure CI under 271(c) if done by others!!).

e) What about Restrictions on use of a patented item?1) The patent right to exclude is absolute, and can be waived in whole or in part. Which means

restrictions on use are not per se illegal. Instead they must be evaluated under applicable antitrust, K and patent misuse doctrines.(A)Misuse doctrine also does not per se find restrictions on use invalid. (B) The appropriate test is whether the usage restriction extends beyond the patent grant and

has anticompetitive effects that when evaluated under the Rule of Reason, are unreasonable. Mallinckrodt at 971.

24



(1) For example, attempting to forbid repair or resale on an unconditional sale. See below.

f) Repair versus Reconstruction/Reconditioning1) In an unconditional sale of a patented item, a buyer has a right to use as he pleases, even to

resell. He also has a right to "repair" the item.2) BUT, there is a prohibition against reconstruction of the item.

(A)Reconstruction usually involves making a "spent" item usable. Involves substituting vital, spent parts that represent the patented invention? Repeat-O-Type Stencil.

g) All of these cases involve substantial overlap of Contract, Antitrust, and Patent. The licenses in question only raise misuse issues because they are conditioned upon the power of the patent. Most of the infringement issues are also breaches of K. Raises the question of how to plead?

h) Extending royalties beyond patent period.1) Court generally won't enforce royalties or payments beyond the patent grant. See Brullote. 2) But there is a strong case to be made that a pre-arranged licensing agreement that goes

beyond the patent period inherently prices only for the patent grant, with payment period simply extending beyond – assuming sophisticated players.

3) Plus, in cases where the K explicitly accounts for the patent grant, and separates it from other payments – Aronson – the court accepts it. K issues overlap with preemption, see below.

i) CasesCases Facts/Holdings Proposition

Dawson Chemical v Rohm & Haas (941)

RH has patent on method of applying herbicide, won't license without purchase of herbicide itself. Misuse? No- propanil a nonstaple good. Allowed to control it.

Misuse, AntitrustRollback on misuse. 271(c) and (d) combine to allow patent holder to control nonpatented nonstaple goods that are capable only of infringing use in patented invention. Misuse can only apply to staple goods.

Mallinckrodt v Medipart (962)

Is reconditioning of "single-use" patented hospital device infringement, and is that inducement of hospitals to infringe? Remand – if the single use restriction valid? If so, is the MP repairing (allowed) or reconditioning (prohibited).

For alleged patent misuse that is not per se (tying?, price fixing), the court must determine if the restriction is beyond the patent grant's right to exclude; if so, use Rule of Reason to determine if unjustifiable anticompetitive effectsRepair allowed, reconditioning not allowed.

ProCD? (1476)Brullote (1484) Pay per use on hop-picking machine. Still

charging after patent expired. Court finds bad – extending beyond patent grant.Dissent – this fails basic K principles.

Moral – make K explicit to show $ allocated for the grant itself, and what is for use outside of patent grant.

Aronson v Quick Point Pencil Co.

(1490)

Patent sought on keyholder. Royalties continued even though patent rejected. Upheld b/c royalty amount contingent on patent. Pure K issue.

Again, make explicit what the patent grant itself is worth.

25



2. 1st Sale, Implied License, Repair/Reconstructiona) These are implied contractual grants of authority to infringe.b) First Sale – the patentee's first sale of patented article includes implied term giving buyer's

license to use and sell the article1) Once the article is released in to the stream of commerce, the patentee can no longer exclude

others from that particular article.2) The implied contract terms may be overcome by explicit contract terms restricting use or

subsequent sale, and those terms are evaluated under K law for validity. Mallinckrodt, ProCD, Repeat-O-Type.

3) Not to be confused with implied license, which is a term of art. First sale is an implied default rule in the explicit contract of sale.

c) Implied License – equitable doctrine under which the patentee's acquiescence, conduct, or the general equities may permit a court to imply a license granting some/all of patentee's authority.1) Equitable doctrine estopping patentee from asserting existing rights to exclude. Asserts that

patentee's conduct has waived his patent rights against this particular infringer.d) Repair/Reconstruction – a buyer with the first sale license to use and sell has the authority to

repair, but not reconstruct the article.1) Addition for First Sale. The question is when does repair become so extensive that it is

reconstruction?2) RepeatOType – creating a new product from a spent product is reconstruction. Further,

buying new products and modifying without replacing the claimed elements certainly isn't reconstruction.

3. Experimental Use - §271(e)a) Non-commercial experimental use of a patented article is generally not infringement. BUT

Roche Products found experimentation on a patented drug to prepare for generic drug introduction after patent expires was found to be infringement. Screwed drug co's under FDA requirements for extensive testing – meant patent extended longer than grant.

b) Congress passed Hatch-Waxman Act, which created 271(e).1) e1: Not infringment to make, use, sell solely for uses reasonably related to FDA approval

processes2) ANDA – streamlined application process for FDA approval of generic versions of already

approved drugs.3) e2: Special Cause of action for Patent Owner – if someone files an ANDA seeking

approval to market BEFORE patent expiration.(A)So if you seek ANDA to market on day after patent grant expires, you get e1 protection

on all use, sale, etc related to FDA approval.(B) BUT if you want to market before patent expires, patentee can file infringement before

you even do anything that infringes – applicant is asserting patent's invalidity or unenforceability. The ANDA must include some legal and factual basis for why the patent is not valid or won't be infringed by the generic product.(1) Eli Lilly v Medtronic , Scalie comments

4) Extension of patent grant from delays and rigors of FDA approval process.c) Intermedics – acts outside the 271(e) infringement exemptions that are de minimus, and acts that

don't rise independently to infringement, are not enough to eradicate the exemption.

26



d) Result, things like trade show demonstrations, displays to medical experimenters, etc. are okay as either inside 271e or de minimus violations outside.

4. Government Infringements - §271(h)a) College Savings – 271h tossed out as violating 11th Amendment.

5. Cases Cases Facts/Holdings Proposition

HP v Repeat-O-Type Stencil (1001)

Print cartridges bought new and modified to be refillable. They were sold without restriction. Actions were not reconstruction because they weren't SPENT. Modifications more "kin to repair." No explicit K to restrict use in this case, like in Mallinckrodt.

Repair/ReconstructionWhen a product is sold without restriction, buyer has implied license to with as he pleases under patents – can use &sell, and can repair. BUT cannot make a new device or reconstruct one that is spent.

IX. InfringementA. Introduction

1. §271 gives the variety of causes of action on infringement. 2. The name of the game is the claim. We must determine whether the claims are infringed. It is like

reverse anticipation. Do the claims read on the allegedly infringing article.3. The patent is presumed VALID under §282. The burden of proving all aspects of invalidity is by

Clear and Convincing Evidence.4. First, must determine what the claims mean.5. Second, must compare each element of the claim to the alleged article, and see if it is contained

therein.6. Thirdly, determine if any elements not present are present in an equivalent form7. Fourth, what defenses against the infringement are present.

a) Attack the patent and its interpretation1) Validity2) Prosecution History Estoppel

b) Attack the conduct of the patentee1) Inequitable conduct2) Misuse3) First Sale, Implied License, Repair/Reconstruction4) Experimental Use.

c) Notice - § 2871) Infringer must have either actual notice or constructive notice by marking.

d) Sun Tzu side bar – See battle from above, with issues of validity and infringement together as one coherent strategy.1) Don't let poor claim construction strategy hurt validity and infringement later, don't let

arguments on one hurt the other.B. Claim Interpretation

1. Introductiona) The claims must be given a meaning. This is a matter of law (Markman) done by the court.

They should be given their ordinary meaning in the art, unless ambiguous or unless the patentee has chosen to be his own lexicographer.

27



b) The spec should be consulted as to ambiguity, then the File history. Extrinsic evidence can then be consulted to give meaning, but not to change the claims.

2. Procedure: Judge, Jury, and Appellate reviewa) The Court interprets claims. Markman I. Finds it a matter of law, de novo review.

1) Considers it a Statutory Construction analogy, not a K analogy.(A)Query – is the interp good against the world? Beyond normal estoppel/preclusion? FSK

thinks so.b) There is no right to a jury trial on claim construction under the 7th Amendment. Markman II.

1) Court finds patent infringement is law, but there is no clear guidance on whether a part of the suit can/should go to jury.

2) Court uses functional considerations, and finds judges better suited to the construction of written instruments.

c) Level of review – 1) Markman I says law, de novo2) Markman II leaves it somewhat open. "Mongrel practice." between fact and law.

(A) If law – de novo(B) If fact by judge – clear error(C) If jury fact – substantial evidence.

3) Currently done law, but door is open.d) Cases

Cases Facts/Holdings PropositionCardinal Chem v

MortonSupreme Court disapproved of Fed Cir practice of not determining validity when noninfringement found. Validity is more important public policy, shall reach this issue if propertly raised.

Markman I (1035) - claim interpretation is a matter of law for the court., subject to de novo review.-use the claims, the specification, and the prosecution history. The claims are to be read in light of the specification; extrinsic evidence may be used to understand claims, but not to vary their meaning.

Markman II (1051) -no 7th amendment right to jury on claim interpretation – finds no real authority, says functionally, judges better suited.

3. Procedure: Evidentiary Sourcesa) Markman I outlined sources as "Claims, Specification, and Prosecution History"; in that order.

1) Claims are to be read "in view of" specification own lexicographer. Serves as dictionary.2) Claims can be "construed" with prosecution history. Doesn't enlarge or diminish claims.3) Extrinsic evidence can be used to show state of prior art – what does the art think this word

means.b) Vitronics further'd –

1) first look to intrinsic (claim, spec, PH), if unambiguous, no extrinsic ev. Claims get ordinary meaning in the art.

28



(A)ALWAYS look at specification (B) MAY look at PH

2) Extrinsic only to help interpret, not to vary or contradict claim, not may it contradic import of spec.

3) Raises the question of how this recipe can ever NOT have some extrinsic evidence. Appears you can look at extrinsic, just not rely on it.

c) Southwall and Autogiro1) form of prosecution history estoppel, without saying estoppel (has consequences for level of

deference, who decides) – 2) The PH can be used to show what is excluded from meaning. Office actions can give an idea

from analysis of prior art what is NOT meant, what is excluded, from the meaning of the claims.

d) Claim Differentiation – canon of interpretation. Shouldn't interpret claims to mean same thing, they should have different meanings.1) BUT, may just be trying to get clear coverage in light of interp problems, and say same thing

many different ways.e) Preamble (words before comprising) – only acts as limitation when it serves to give meaning to

claim, not when it gives purpose. 1) Unclear where that line is.

f) CasesCases Facts/Holdings Proposition

Vitronics v Conceptronics

(1089)

Oven reflow soldering patent. Meaning of "solder reflow temperature" – Reverses DCt for using extrinsic evidence to change meaning in patent.

Claim Construction – look first to claims, spec, file wrapper. If unambiguous, not allowed to use outside evidence. Extrinsic Evidence can be used to help interpret, but cannot vary or contradict claim, nor even the spec.Claims – ordinary meaning of words in the art unless acting as own lexicographer.

Southwall and Autogiro

May use Prosecution History in claim construction to help determine what is NOT meant. Examination of claims in light of prior art can show what is excluded from claim meaning. Different from PHE no estoppel, not an amendment.

4. Final Words – a) The role of extrinsice evidence remains unclear in how it can NOT come in even under a

restrictive view, and why it shouldn't be relevant under all views.b) Prior art cited in the intrinsic evidence is notice to all about the meaning of the claims. It serves

a definitional function.c) Experts other than the inventor may be required to tell court what the terms mean. Usually

useful.d) How does ambiguity in the claim term reflect a possible validity 112 issue? If the term is

ambiguously defined in a way contrary to what those in the art would say, does the claim fail? Or does the court have a duty to interpret narrowly under AAI v Prince?

29



C. Doctrine of Equivalents 1. Introduction

a) Even if an accused article doesn't infringe literally, it can infringe if it is equivalent to the claimed invention.1) The fight is over how to weigh "equivalent"

b) The ability to stretch claim to cover an equivalent is tempered by Prosecution History Estoppel, which equitably limits the equivalent extension so as not to cover equivalents that were disclaimed/amended away in the prosecution history in order to achieve patentability.

c) Equitable test, question of fact, done by Jury – substantial evidence on review.2. The Supreme Court in Warner-Jenkinson adopted Nies's dissent from the Fed Cir opinion that the

"all-elements" test is the starting point for all DOE analysis. a) In other words, whatever ultimate "test" is used, it must be applied to find equivalents in each

element of the claim.b) BUT – what exactly is an element, and how much flexibility should be given in determining

what is a material element 1) 6-sided box versus box with side 1, side 2, side 3, . . . , side 6.2) Does a 5-sided box infringe both ways of claiming under DOE? Not clear that it does, which

seems odd. c) Equivalency cannot embrace a structure that is specifically excluded, or necessarily excluded (by

the claim language itself) from the scope of the claims? How does this apply?1) Maxwell test – disclosed but unclaimed stuff could be clearly equivalent but specifically

excluded by not being claimed.2) Dolly – Court found failed triple identity test – not same way.

(A)Patent recited "stable rigid frame formed in part by [four chair panels]"(B) Accused device had no separate frame, made stable with the four panels alone.(C) Stabilizing without the frame is necessarily excluded by language "in part."

3) AND just to REALLY CONFUSE THINGS – the court has reiterated the all elements requirement, but still pulled back from it, stating there is no ONE-TO-ONE requirement. Festo lower court found a single two-way sealing ring equivalent to claim of 2 one-way sealing rings. Seems to totally violate all-elements and embrace a structure specifically excluded.

d) Equivalency cannot vitiate a claim element.1) You cannot expand the claim such that a limitation/element in the claim become

meaningless.2) Warner II remand found pH = 5 does not vitiate the limit pH = 6-9.

(A)Really a question of, are you stretching claim so far as to make it's limits meaningless.3. There are two "tests" of equivalents – both are acceptable depending on case.

a) Insubstantial Differences: Are the diffences between accused product and patented article substantial.

b) Triple Identity : Same function in the same way with the same result. 4. There is no INTENT requirement for DOE. In other words, independent experimentation is not a

defense to infringement under DOE and more than literal infringement. Graver Tank implies otherwise.

30



5. Known Interchangeability – at time of infringement, the state of the art determining whether something is intervhangeable with an element of the claimed invention is relevant in showing equivalents.

6. All advantages rule – Vehicular Tech v Titan Wheelsa) Semi-PHE style argument. It is a step-sister to claim interpretation doctrine listed above. If the

specification or the prosecution history specifically have referred to something in the prior art that is NOT covered by the claim language asserted, then the claim is interpreted as NOT including that function.

b) As a corollary to the intepretation, then, is that DOE cannot be used to cover that function in an item. This is not PHE because there is no amendment.

c) This may be just the same as Wilson Sporting Goods.d) Newman's impassioned dissent claims this is unsupportable, and anything outside Wilson or

PHE is WRONG.7. Cases

Cases Facts/Holdings PropositionWarner-Jenkinson v

Hilton Davis I (1127)

Dye purification patent recites pH limit - 6.0–9.0. Is a pH of 5 equivalent? Does DOE exist? Yes to the latter, remand to determine the former, and whether there is Prosecution History Estopper (PHE) blocking it.

DOE exists. In order to avoid definitional and notice problems, DOE must be applied to each element of the claim, not the "gist" of the invention. – all elements rulePHE – Amendment in file without explanation creates rebuttable presumption that it related to patentability and burden is on patentee to rebut and overcome PHE on DOE for that claim element.

D. Prosecution History Estoppel 1. Warner II remand – cites Warner-Jenkinson - if there was an amendment in the file history that is

not explained, the presumption is that it was for reasons related to patentability, and the burded shifts to the patentee to establish that the amendment was for reasons not related to patentability.a) As a result, the prosecution history estops patentee from asserting DOE over that elementb) And patentee can rebut, reclaiming DOE if he can show amendment not related to patentability

2. The Court is split on the extent of PHE. Final word appears to be Festoa) PHE not just limited to amendments overcoming prior art – ANY reason related to patentability

will allow PHE to block DOE on that element. Clear.b) Voluntary amendments treated same as required amendments. No differences.c) PHE blocks ALL DOE on that element. There is no acceptable range of DOE for an element

that was amended for reasons related to patentability. HIGHLY SPLIT.d) Unexplained amendments get no DOE. Clear.

3. Concerna) Two patent app's, A claims range 6-9, B claims 5-9.

1) B amends to 6-9.2) C accused of infringement under DOE with article at 5.3) Can A use DOE, but B be blocked by PHE?4) ACTUALLY, probably okay

(A)If B's amendment was for patentability reasons, he is blocked under FESTO.

31



(1) If A tries to claim equivalence, then ideally the same reasons that prompted B's amendment will block DOE – Wilson's, perhaps enablement (althought not sure), just not PHE.

(B) If not related to patentability, B is not blocked. And likely A would not be blocked either.

b) Also – is 112 related to patentability? Likely.4. Other DOE limits –

a) Maxwell – disclosure w/o claiming is a dedication to the public. Cannot claim equivalents if you disclosed it but narrowed your claims so as not to claim what was disclosed.

b) Wilson Sporting Goods – DOE cannot claim something disclosed in the prior art.1) Create a phantom claim encompassing the accused article and the patent claim2) Then ask if it would be patentable over the prior art.3) If not, cannot get infringement under DOE.

c) All-elements test of DOE acts as its own limit.d) All advantages rule – Vehicular Tech v Titan Wheels

1) Semi-PHE style argument. It is a step-sister to claim interpretation doctrine listed above. If the specification or the prosecution history specifically have referred to something in the prior art that is NOT covered by the claim language asserted, then the claim is interpreted as NOT including that function.

2) As a corollary to the intepretation, then, is that DOE cannot be used to cover that function in an item. This is not PHE because there is no amendment.

3) This may be just the same as Wilson Sporting Goods.4) Newman's impassioned dissent claims this is unsupportable, and anything outside Wilson or

PHE is WRONG.5. Cases

Cases Facts/Holdings PropositionWarner Jenkinson Remand (1153)

pH 6.0-9.0 added to avoid >9pH prior art. Court implements rebuttable presumption of SCt that unexplained amendment is for patentability reasons, and bars equivalents. Remands. Further, finds that pH5 equiv to 6 does not vitiate the claim's meaning.

Lack of PH showing reason for amendment = presumption of patentability reasons and bars equivalents. Can be rebutted by showing in trial court – pre Warner cases can use extrinsic evidence.

Festo Corp PHE arises from amendment for ANY reason related to patentability.PHE on an element disqualifies ALL DOE. As does unexplained amendment.

E. Means Plus Function Claims: § 112 ¶ 6 An element in a claim for a combination may be expressed as a means or step for performing a specified function without the recital of structure, material, or acts in support thereof, and such claim shall be construed to cover the corresponding structure, material, or acts described in the specification and equivalents thereof.

1. A claim may recite a means for performing a function, i.e., "means for fastening." a) To be valid, the specification must recite structures for performing the function – nails, screws,

staples.b) Now, the claim gets the function as performed by the structures specified, AND, any structure

equivalent to the structures specified.

32



2. Different from DOEa) 112¶6 literal infringement requires two things: identity of the function, and then equivalents to

the structure/s in the spec.b) DOE is about equivalents to the claim itself, and is not for literal infringement.c) Can you DOE on a 112¶6 claim?


Cole v Kimberly Clark (1200)

"Perforated means for tearing" is not a means plus function under 112¶6 because it recites a structure for performing the means – perforations, for tearing.

Means plus function claims – cannot recite any structure. Use of "means for" does not create presumption of 112¶6 claim.

Dawn Equip v Kentucky Farms

(1212)

112 ¶6 requiresidentity of function in claim equivalence of structure in specification.

DOE equivalence versus 112¶6 equivalence.112¶6 has built-in equivalence: any conceivable means for performaing the exact function in the claim, and that is equivalent to the required example of structure in the specification. But this is a LITERAL infringement.DOE is done purely based on the claim.

F. Complex Technologies????????????????????????

X. RemediesA. Introduction

1. § 283 – Injunctions are allowed. Permanent ones after infringement are given as a matter of course.2. § 284 – Damages Upon finding for the claimant the court shall award the claimant damages adequate to compensate for the infringement, but

in no event less than a reasonable royalty for the use made of the invention by the infringer, together with interest and costs as fixed by the court.

When the damages are not found by a jury, the court shall assess them. In either event the court may increase the damages up to three times the amount found or assessed. Increased damages under this paragraph shall not apply to provisional rights under section 154(d) of this title.

The court may receive expert testimony as an aid to the determination of damages or of what royalty would be reasonable under the circumstances.

a) Damages must be adequate to compensate. There are two ways to accomplish this: lost profits, or at a minimum, a reasonable royalty.

b) Additionally, damages may be expanded up to treble at court's discretion upon a finding of willfulness.

B. Damages 1. Lost Profits

a) Panduit outlines the four part test for lost profits. Patentee must prove1) demand for the patented product2) absence of acceptable noninfringing substitutes3) his manufacturing and marketing capability to exploit demand4) amount of profit he would have made

b) Demand1) Low threshold

33



2) Either significant sales by infringer or patenteec) Absence of noninfringing substitutes

1) Highly Litigated.2) Must show either (State Industries)

(A)Consumers generally willing to buy patented product for its advantages; or(B) Specific purchasers of infringing product bought it for its infringing characteristics

3) Highly Speculatived) Manufacturing and Marketing Capability

1) Easy determination – could patent owner expand capacity to meet demand2) Can be shot by patentee's expressed desire to NOT do so, but rather to license.

e) Determining Profit1) Lost Profits = Lost Revenues – Incremental Costs

(A)Requires determining fixed costs (those regardless of production) and excluding them from determination.

(B) Panduit lost on this aspect because they couldn't show their fixed costs, and therefore couldn't determine profits!

2) Or, can show lost profits by showing price reductions caused by the infringing product.f) Cases

Cases Facts/Holdings PropositionPanduit v Stahlin

Bros. (1275)P cannot show his profit b/c didn't show what his fixed costs were.

Lost Profits Test: patentee must prove1- demand for the patented product2- absence of acceptable noninfringing substitutes3- his manufacturing and marketing capability to exploit demand4- amount of profit he would have made

2. Reasonable Royaltiesa) If lost profits cannot be proven, the patent owner is entitled to a reasonable royalty at a

minimum. There are two methods for determining RR.1) Hypothetical Negotiations

(A)Amount patent owner and infringer would have agreed upon in a willing negotiation if both were reasonably trying to reach an agreement.

(B) Clearly extrinsic evidence would help. Look at GP factors on p 1292.2) Analytical Method.

(A)Attempting to allocate part of the infringer's profits to the patent owner as a reasonable royalty.

(B) Can use actual or projected profits as the baseline. TWM(C) Then, assume a standard industry profit margin, and take the rest for the patent owner.(D)MAY even take more than actual profits if projections are excessive.

b) Note – cannot take more than what would compensate. So, for example, if a contributory (or direct) infringer fully compensates the patent owner, the patent owner cannot get more Δs from the other infringer.

34



c) CasesCases Facts/Holdings Proposition

Georgia Pacific (1291)

GP Factors for RR on page 1292. Reasonable Royalty2 Ways- Willing Negotiation: mimic negotiation between willing parties-Analytical Method: allocate reasonable portion of infringer's profits.

TWM v Dura (1301) Reasonable Royalty –Analytical MethodSuggests taking infringer's net profit, subtract out a reasonable industry standard profit, and give remainder to patentee.

3. Pre- and Post-judgment Interesta) Prejudgment Interest

1) Historically only in "extraordinary circumstances"2) Now, after Devex Corp., and the codification in 1952 Act in § 284, considered standard.

Awarded as necessary to ensure full compensation for infringement.3) Calculation of Interest depends on the interest rate, the method of accrual, and the principal

to which it is applied.(A)Court has significant discretion in choosing an interest rate. Rates ranging from T-Bill to

Corporate Prime have been used. T-Bill may be too low, as it accounts for no risk of default, and is unreasonable interpretation of what Corp would do with $. Corporate Prime may be too high, as it awards for too much risk not actually taken. But Posner has suggested it is the best substitute.

(B) Method of accrual(1) Compound or Simple(2) Most courts do compound. But there is the issue of taxes(3) Taking out taxes complicates, and can overtax the patentee.

(C) Principal(1) Whether lost profits or reasonable royalty, the compensatory part gets it(2) Enhanced Δ's DO NOT(3) Atty fees might.

b) Postjudgment1) Statutory – from date of judgment to date of payments.2) Based on T-Bills, no discretion.

4. Attorneys Fees, Enhanced Damages, and Willfulnessa) Attorney's Fees

1) Fourt part standard(A)Case must be exceptional(B) District Court may exercise discretion(C) Fees must be reasonable(D)Fees only to prevailing party.

35



2) Exceptional –(A)Willful and deliberate infringment or prolongation of litigation in bad faith.(B) Actual notice of the patent often the key.(C) Conduct prior to patent issuance – knowledge of pending applications – can be used.

3) Alleged infringer can also get Atty's fees(A) Inequitable conduct before PTO

(1) intent to withhold or misrepresent material info during prosecution(2) Intent and Materiality required(3) No negligence allowed, even gross.

(B) Misconduct in litigationb) Enhanced Δ's – can get treble damages.

1) Need clear and convincing evidnce of willful infringement2) Totality of the circumstances test that Δs should be increased.3) Attorney Opinion is good insulation against willfulness.

(A)But, as in Judin, it can backfire if it is so clearly incompetent and designed for bad faith purposes like avoiding liability in face of known infringemen.

c) Court has discretion. Even if circumstances all met, court can still decide no enhancement. Court must make sure to provide reasons either way, with record to support so review of discretion can take place.

d) CasesCases Facts/Holdings Proposition

Judin v US (hdout) optical scanner patent – sued US for post office usage. Didn't get sample of devices, nor investigate with PO, nor reverse engineer. Filed Suit. Rule 11 violations found. Must investigate before suit. Failed to look into key claims, which required investigation. Remand for sanctions

Rule 11 Sanctions – Investigate before suitClaims that will be in issue must be investigated with actual sample before suit.

Johns Hopkins v Cellpro (hdout)

Patent for stuff that separates out immature stem cells. CellPro knew of patents for years, found to have infringed willfully. Treble Δs. CP relied upon atty opinion that patents were invalid.

Willfullness is question of fact to be proven by clear and convincing evidence.Atty opinions on potential infringement generally insulate from willfulness if thorough and competent and followed.

C. Equitable Relief – Injunctions 1. Preliminary Injunctions

a) Four part test in Smith v Hughes similar to normal PI tests1) Reasonable likelihood of success – a valid, infringed patent.

(A)Presumption of validity is good, but likely needs to be bolsterd affirmatively.2) Irreparable Harm – which is presumed if there is a valid and infringed patent

(A)Don't delay in bringing suit!3) Balance of hardships against patent owner

(A)Effect on patent owner's business, market share, sales, reputation(B) Effect on infringer's sales, likelihood of layoffs.(C) Shouldn't matter how long is left in term.

36



4) Impact on the public interestb) Cases

Cases Facts/Holdings PropositionSmith Int's v Hughes

Tool.Smith admitted ongoing infringement of Hughes patent. Court refused PI until extent of infringement shown. FedCir overturned.

preliminary injunctions"where validity and continuing infringement have been clearly established . . . immediate irreparable harm is presumed."4 part test – reasonable likelihood of success on the merits = valid, infringed patentirreparable harm = presumed if valid and infringedbalance of hardshipsimpact on public interesst

2. Permanent Injunctionsa) General rule is that Perm inj will generally follow a judgment of infringement. Unless there is a

sound reason for denying the injunction.b) Exceptions?

1) Might transtion for a year with mandatory royalties - Schneider v SciMed2) Equitable considerations might create compulsory licensing.

(A) Infringer produces product, patentee doesn't.(B) Public Policy reasons?

3. Stays of Injunctionsa) Court must look to a counter of the PI test: likelihood of success by infringer and the equities

against him. Kodak sets out the four part test1) likely to succeed on merits of appeal

(A)Difficult hurdle. Unlikely to believe a "strong showing" can be made – this is the court that found against him.

(B) Best chance is strong equity showing with a somewhat strong showing here2) Irreparable injury without stay

(A)Relevant factors – layoff employees, become insolvent, suffer corporate death(B) Irrelevant factors – market share loss, reputational damage

3) No substantial harm to other interested parties with stay(A)Effect of stay on Patentee's ability to execute the judgment

4) Stay will do no harm to the public interest(A)Public Access to infringing product. How significant.

b) CasesCases Facts/Holdings Proposition

Polaroid v Eastman Kodak (1356)

Film and camera patents.EK likely not to win, balance goes against them.

Stay of Permanent Injunction – will they succeed, and balance of equities. Fleshed out to 4pt test1) likely to succeed on merits of appeal2) Irreparable injury without stay3) No substantial harm to other interested parties with stay4) Stay will do no harm to the public interest

37



XI. Federal Circuit and PreemptionA. Unified Forum

1. Getting around juriesa) Could you avoid a jury altogether in a patent suit?b) Theoretically yes. Sue for infringement early, and ask only for an injunction. Civil trial. No 7th

amendment right. Likely succeed?c) Lockwood – Fed Cir found right to jury trial for DJ action. But decision vacated by SupCt after

settlement during cert. Unclear what would happen now.B. Preemption

1. Stiffel – states cannot extend patent protection directly in terms of time or subject matter.a) Nor can they give protection that clashes with the objectives of patent lawsb) Copying an unprotected article in commerce is okay. Giving protection to it is bad. "confusion"

as to source for unprotected article irrelevant.2. Kiwanee – trade secrecy law doesn't conflict with patent law. Not preempted

a) Analyzed under objectives of patent law. Here, issue of disclosure is key.b) Court finds no increase in disclosure of any invention.c) Nature of protection is different enough that there is no conflict, and choosing one over other is

not clear – get different benefits with different drawbacks.1) Is this different from Stiffel?

d) Douglas dissent – this gives permanent patent protection!!1) Misses point of differences in protection, different needs served.

3. Benito Boats – No copying by wax molding of boat hulls law IS preempted.a) Finds the protection patent-like.

4. Moral – Patent like protection for unpatentable things, or protection that conflicts with patent law is bad.a) But protection that is different, or doesn't seem to drain away need for patent protection, is okayb) Unfair competition – narrowedc) Trade Secrecy – okay.

5. Tort Claimsa) Dow Chemical – tort claims for interference with contract may implicate conduct before the

patent office. Not a problem1) Can even adjudicate questions of federal patent law2) BUT claim must have something extra, some additional elements not found in the patent law

cause of action in order to avoid preemption.b) State law claims based on bad faith publicizing of an invalid patent require showing of bad faith

in order to avoid preemption – Hunter Douglas, Zenith v Exzec.

38

patents - university of chicagoblsa.uchicago.edu/upper class/patents-kieff2001.doc · web...

Documents