Archive for July, 2010

Rader’s Dissent in Bilski – Keeping It Real

Monday, July 19th, 2010

Discussing a particularly convincing dissent, commentators frequently are compelled to close with: “But it was a dissent.” The most influential dissent in recent months may well be Judge Rader’s dissent in In re Bilski, 545 F.3d 943, 1011 (Fed. Cir. 2008). It was cited twice in the opinion of the court in the recent Supreme Court decision which held that the “machine or transformation” test was overly limiting on processes and that the Bilski claims were directed to an abstract idea (unpatentable under s. 101).

This is exactly how Rader would have disposed of Bilski when the appeal was before the Federal Circuit. He opens his dissent:

“This court labors for page after page, paragraph after paragraph, explanation after explanation to say what could have been said in a single sentence: ‘Because Bilski claims merely an abstract idea, this court affirms the Board’s rejection.'”

The Supreme Court’s Bilski decision has been criticized for providing little in the way of guidance as to exactly when an invention falls into the “abstract idea” category. Judge Rader spends more time on this problem than did the Supreme Court:

“[A]bstract ideas can never qualify for patent protection because the Act intends, as section 101 explains, to provide ‘useful’ technology. An abstract idea must be applied to (transformed into) a practical use before it qualifies for protection. …When considering the eligibility of ‘processes,’ this court should focus on the potential for an abstract claim. Such an abstract claim would appear in a form that is not even susceptible to examination against prior art under the traditional tests for patentability. Thus this court would wish to ensure that the claim supplied some concrete tangible technology for examination. Indeed the hedging claim at stake in this appeal is a classic example of abstractness. Bilski’s method for hedging risk in commodities trading is either a vague economic concept or obvious on its face. …In any event, this facially abstract claim does not warrant the creation of new eligibility exclusions.”

The Supreme Court could not have agreed more. The problem is that Bilski’s claim does not seem all that abstract. It is certainly not in the same league as abstract ideas like The Golden Rule or “The love you take is equal to the love you make.” These abstract ideas are philosophical propositions that no one would expect an Examiner to be able to examine, even though their value to society can be debated ad infinitum. But some claims to new methods of directing or organizing human behavior to achieve (e.g., a business or a healthcare outcome) can certainly be searched against a body of prior art, although it may be difficult to do so. The Supreme Court did not rule out patents on this type of invention. It will remain for future decisions to put legal flesh on the bones of “some concrete tangible technology.” We now know that it has to be more real than a “useful, tangible and concrete result.” Just how much more real remains to be seen.


Fed. Cir. Holds Provisionals Are U.S. Filings For 102(E)

Thursday, July 8th, 2010

In case you wondered if this was a settled question in the ever-shifting world of section 102, yesterday, In re Giacomini, (Rader, C.J.), (copy at end of post) the panel held that the effective U.S. filing date of a U.S. patent asserted to be prior art against a “later-filed patent” was the filing date of the corresponding U.S. provisional application claiming the same invention.

The court did not find merit in Applicants’ argument that the outcome should be controlled by In re Hillmer, 359 F.2d 859 (CCPA 1966) in which the court held that the date of  a foreign-filed priority application was not the effective filing date of a U.S. patent asserted to be prior art under 102(e). If nothing else, the decision underscores the necessity of fully disclosing the invention generically and specifically  in a provisional filing, even if enablement and WDR may be necessarily “iffy” for early-stage technologies.

in re giacomini

Are Abstract Ideas Not Actually Abstract?

Friday, July 2nd, 2010

The following post is from Jim Hallenbeck of Schwegman, Lundberg & Woessner.

The disposition of Bilski rested on a holding that Bilski’s claims were directed to an abstract idea – hedging.  (Decision at end of post.)

The root case for “abstract” is Le Roy v. Tatham, 55 U.S. 156, 174-75, 185-86 (1852).  This case is cited in Bilski on page five of Justice Kennedy’s majority opinion.  Here are a few excerpts:

The word “principle” is used by elementary writers on patent subjects, and sometimes in adjudications of courts, with such a want of precision in its application as to mislead. It is admitted that a principle is not patentable. A principle, in the abstract, is a fundamental truth; an original cause; a motive; these cannot be patented, as no one can claim in either of them an exclusive right. Nor can an exclusive right exist to a new power, should one be discovered in addition to those already known. Through the agency of machinery, a new steam power may be said to have been generated. But no one can appropriate this power exclusively to himself under the patent laws. The same may be said of electricity and of any other power in nature, which is alike open to all and may be applied to useful purposes by the use of machinery.  Le Roy, 55 U.S. at 174-75.

That the main merit — the most important part of the invention — may consist in the conception of the original idea — in the discovery of the principle in science or of the law of nature stated in the patent, and little or no pains may have been taken in working out the best mode of the application of the principle to the purpose set forth in the patent. But still, if the principle is stated to be applicable to any special purpose, so as to produce any result previously unknown in the way and for the objects described, the patent is good. It is no longer an abstract principle. It becomes to be a principle turned to account, to a practical object, and applied to a special result. It becomes then not an abstract principle, which means a principle considered apart from any special purpose or practical operation, but the discovery and statement of a principle for a special purpose — that is, a practical invention, a mode of carrying a principle into effect. That such is the law [he observes] if a well known principle is applied for the first time to produce a practical result for a special purpose has never been disputed, and it would be very strange and unjust to refuse the same legal effect when the inventor has the additional merit of discovering the principle as well as its application to a practical object.  Le Roy, 55 U.S. at 185-86.

Considering that the abstract idea in Bilski is hedging, which in view of Le Roy v. Tatham equates an abstract idea to a law of nature or mathematical formula, hedging is essentially viewed by the Court as equal to a law of nature – a basic principle.  Laws of nature and mathematical formulas are actually not abstract in the sense of being loosely defined, which is how I initially read “abstract ideas” in Bilski.  Instead, the opposite is true.  A claim to an abstract idea is actually very specific, such as a claim to the Pythagorean Theorem, addition, electromagnetism, or even gravity.  Those are very specific things just as hedging is very specific – or concrete, but I will get back to that.  A thesaurus is quite helpful in finding a single word with the same meaning as abstract that is more easily understood.  Conceptual.  An abstract idea is accurately considered to be conceptual as in, “The claim of Bilski was directed at the concept of hedging.”  With this definition in mind, the abstract idea holding makes more sense.  But, it turns out that abstract ideas are not actually abstract at all.


Just Medium Rare

Friday, July 2nd, 2010

This Post was written by Ronald Schutz of Robins, Kaplan, Miller & Ciresi and published with his permission.

Slip that inequitable conduct claim back on the summary judgment “barbie”-the standard for establishing such claims as a matter of law is not quite done. In Leviton Manufacturing Co., Inc. v. Universal Security Instruments, Inc. a majority of the Federal Circuit vacated the district court’s award of summary judgment for inequitable conduct and vexatious litigation as well as the court’s one million dollar award for attorney’s fees and costs. The Leviton court found that the district court should have held an evidentiary hearing before entering its judgment because material questions of fact regarding intent to deceive continued to exist. In a searing dissent, Judge Prost recognized that Federal Circuit precedent reserves summary disposition for the “rare case” of inequitable conduct, but argued that the facts in Leviton looked raw enough to her to more than meet precedential standards.  The result? When it comes to summary judgment for inequitable conduct claims, both sides of the patent law bar are in for a grilling.

The inequitable conduct claims in Leviton arose from the behavior of an individual attorney representing the patent holder. Within a six month period, that attorney submitted two different patent applications on Leviton’s behalf with nearly identical claims but attributed the inventions to different inventors. The attorney failed to disclose the first invention (the “Germain application”) as prior art in the second application (the “‘766 patent”), claiming that parent patents in the ‘766 patent gave it an earlier priority date. However, the ‘766 patent application failed to disclose the involvement of its parent patents in twelve separate litigation actions involving allegations of patent invalidity, unenforceability and inequitable conduct. The attorney also was responsible for other factual omissions which occurred during reexamination of the ‘766 patent at the PTO. The attorney’s conduct came to light as part of an action for infringement of the ‘766 patent brought by Leviton.

Following contentious discovery in that infringement action, Leviton sought to dismiss its infringement claims. The district court dismissed the case in chief with prejudice and granted leave for one of the alleged infringers to file a motion for fees and costs. Adopting the magistrate’s recommendation on the issue, the district court found that Leviton had committed inequitable conduct as a matter of law and had engaged in a strategy of vexatious litigation, justifying the million dollar award of fees and costs.

On appeal, the Federal Circuit agreed with the district court that both the failure to disclose the Germain application and the litigation pending against the parent patents of the ‘766 patent were material omissions as a matter of law. However, in order to prove inequitable conduct, an alleged infringer must show intent to deceive along with the showing of materiality and the Federal Circuit found that the district court erred when it made its summary judgment on the issue of intent. Specifically, the Federal Circuit found that it was improper for the district court to infer intent without an evidentiary hearing because the explanation that Levtion’s attorney gave for not disclosing the Germain application was not unreasonable as a matter of law. Judge Prost disagreed and explained that “the circumstances surrounding Leviton’s withholding of the Germain application are as egregious as possible short of an explicit admission of intent to deceive the PTO.”

The Federal Circuit also refused to infer intent from the material omission regarding pending litigation, especially because the Leviton attorney ultimately did submit information to the PTO regarding pending claims. The court said that while that information did not demonstrate good faith, it might be evidence of it. Again, Prost disagreed and said that because of certain critical admissions made during the attorney’s deposition, there was “simply no other inference to be drawn from the evidence.”

It’s going to be a long hot summer no matter which side of an inequitable conduct claim you’re on. In addition to awaiting the Federal Circuit’s en banc opinion in Therasense, Leviton’s outcome means there’s still no clear instructions on how to prepare (or defend against) such claims at summary judgment so that they are both satisfactorily rare and well done. Certainly, proving intent to deceive is one key ingredient and we anticipate that both plaintiffs and defendants will use the opinion in their favor to argue what should constitute the necessary intent. In Leviton’s wake, pre-disposition evidentiary hearings may be the new medium well.

Whether affirmatively moving for summary judgment on inequitable conduct or defending against a claim alleging it, courts will most likely look to the outcome or non-existence of such a hearing on a motion for summary judgment to determine just exactly which side’s goose has been properly cooked.