**Patent Law** William Fisher (2017.12.20)
  III. Entitlements
    Infringement
      Statutory Provisions
        USA
          35 USC 271(a)
            Except as otherwise provided in this title, whoever without authority makes, uses, offers to sell, or sells any patented invention, within the United States or imports into the United States any patented invention during the term of the patent therefor, infringes the patent
        Japan
          Article 2(3)
            (3) "Working" of an invention in this Act means the following acts:
(i) in the case of an invention of a product (including a computer program, etc., the same shall apply hereinafter), producing, using, assigning, etc. (assigning and leasing and, in the case where the product is a computer program, etc., including providing through an electric telecommunication line, the same shall apply hereinafter), exporting or importing, or offering for assignment, etc. (including displaying for the purpose of assignment, etc., the same shall apply hereinafter) thereof;
(ii) in the case of an invention of a process, the use thereof; and
(iii) in the case of an invention of a process for producing a product, in addition to the action as provided in the preceding item, acts of using, assigning, etc., exporting or importing, or offering for assignment, etc. the product produced by the process.
          Article 68
            A patentee shall have the exclusive right to work the patented invention as a business; provided, however, that where an exclusive license regarding the patent right is granted to a licensee, this shall not apply to the extent that the exclusive licensee is licensed to exclusively work the patented invention.
        China
          Art. 59
            For the patent right of an invention or a utility model, the scope of protection shall be confined to what is claimed, and the written description and the pictures attached may be used to explain what is claimed.
      Forbidden Actions
        Make
          combination patents
            make = components are brought together into one operable assembly
            Edge case: assembly overseas
              Deepsouth Packing (SCOTUS 1972)
                Facts: combination patent on a shrimp deveining machine
                Holding (5/4): Manufacturing all components of a machine covered by a combination patent, then shipping those components overseas for assembly there, is not “making”
              271(f)(1) overturns Deepsouth
                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
          joint infringement
            ordinarily, patentee must prove that a single legal entity practiced each element of the claim -- either literally or through equivalents
            if some elements are practiced by entity #1 and some by entity #2 (e.g., customers), patentee can prevail on joint infringement theory, but only if entity #1 "controls or directs" the conduct of entity #2 or they form a “joint enterprise”
              BMC Resources (CAFC 2007)
              Miniauction (CAFC 2008)
              Akamai v. Limelight (CAFC 2010; SCOTUS 2014; CAFC 2015 en banc)
                Doctrine of inducement (see below) cannot be used to extend liability
                CAFC (at suggestion of SCOTUS) loosens definitions
                  “Directs or controls” includes situations in which E1 conditions E2’s participation in an activity or receipt of a benefit upon performance of a step of a patented method and establishes the manner or timing of that performance
                  “Joint enterprise” requires (only):
                    1. An agreement, express or implied
                    2. A common purpose
                    3. A community of pecuniary interest in that purpose
                    4. An equal right to a voice in the direction of the enterprise
          repair/reconstruction
            repairing a patented product that one has a right to use is not infringing
              rationale: tacit term of the original sale of the patented product
                Possible alternative justification: hostility to planned obsolescence and use-based differential pricing
              Examples:
                Replacing the worn-out fabric of a patented convertible top is “repair”
                Upgrading a patented fish canning machine, including changing the can size from 1 pound to 5 ounces is “repair”
            repairing a patented product that one does not have a right to use is infringing
              rationale: no underlying tacit license is available
              repair perpetuates the underlying unlawful use
                Aro (SCOTUS 1964)
            reconstructing a patented product that one has a right to use is infringing
              rationale: right to reconstruct is not a tacit term of the original sale of the patented product
        Use
          Use of patented products made without authority by someone else is infringement
            patent rights include “right to put into service any invention” – Bauer (SCOTUS 1913); Flat Slabs (1920)
            Aro (SCOTUS 1964)
            NTP v. RIM (CAFC 2005)
          Borderline situations involving meaning of “use”
            Mere possession of a patented machine is not "use", in absence of "threatened or contemplated" use
              Calif. Table Grape Comm. (ED Cal. 2007)
            Demonstration at a trade show may not be "use"
              Medical Solutions (CAFC 2008) does not resolve the issue
            Testing is "use"
              Waymark (CAFC 2001)
            Continued use of infringing product made and sold before patent grant is infringement
              Olssen (1938); Coakwell (Ct Cl 1967)
            Use of a patented product for purposes other than those contemplated by patentee is infringement
              "all uses" theory
            Early cases hold sales demonstrations = use (now covered by “offer to sell”)
        Sell
          first-sale doctrine
            presumed that sale of the patented product to consumers carries with it right to resell
            see Exhaustion Doctrine, below
        Offer to sell
          Domestic offer, foreign sale
            Quality Tubing (SD Tex 1999): offer to sell, made in U.S. is not infringement where neither manufacture nor delivery will occur in U.S.
            Rotec Industries (CAFC 2000): dictum: offer to sell, made in U.S., is infringement, regardless of location of manufacture and delivery
        Import
          Importation of patented products
            271(a): Except as otherwise provided in this title, whoever without authority ... imports into the United States any patented invention during the term of the patent therefor, infringes the patent.
          importation of products made overseas with patented process
            271(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.
            In an action for infringement of a process patent, no remedy may be granted for infringement on account of the noncommercial use or retail sale of a product unless there is no adequate remedy under this title for infringement on account of the importation or other use, offer to sell, or sale of that product.
            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.
          Principal limitation: Exhaustion (see Defenses, below)
      Claim Construction
        Central vs Peripheral Claiming
          Central
            Inventor identifies the essence of her invention
            The government (typically a court) determines the scope of her monopoly power/property right in the course of infringement litigation
            Primary criterion in determining scope = amount of contribution to technology/society
          Peripheral
            Inventor marks the boundaries of her property right
            In litigation, the government (typically a court) merely enforces the “no trespassing” signs
            Scope of the right determined through threshold struggle between inventor and representative of the state (patent office)
          History
            US system initially uses central claiming
            Beginning in late 19th c., moves gradually toward peripheral pole
            But still retains many elements of central claiming theory -- and those elements may be increasing
        Substance
          Sources
            Intrinsic
              Claims
              Specification
              Drawings
              File wrapper
            Extrinsic
              dictionaries
                Available at the time of patent application
              Non-cited prior art
              Expert testimony
                technical experts
                patent attorney
                patentee
          Canons of Interpretation
            Cf. Llewellyn, Canons
            Read claims through eyes of PHOSITA
              for criticism, see Golden (2008)
                “ Crudely stated, if claims are to be the fundamental determinants of patent scope, the basic approach to construing claims should be one of reasonableness according to (1) established legal principles, (2) a well-informed reading of the patent and its prosecution history, and (3) the mores and understandings of claims' relevant interpretive community. The ordinary artisan perspective is not well designed to implement this approach. Ordinary engineers or scientists typically do not form a well-constituted interpretive community for patent claims. Consequently, their views on claim meaning might be too legally ill-informed and idiosyncratic to permit substantial predictability.”
                “ A better perspective to associate with claim construction is that of _a patent attorney having access to the knowledge of a person of technological skill_. Such an attorney-with-artisan perspective would make use of the artisan's knowledge to help ensure claim construction's technological sensibility. But it would more generally follow rules and techniques for claim construction that are publicly known and anchored in the practices of an active interpretive community. _Claim construction law and practice are already mostly in agreement with this attorney-with-artisan perspective, and substantially in conflict with the ordinary artisan perspective._ Further, use of an ordinary artisan perspective for claim construction has a surprisingly weak historical pedigree. Recognition that an attorney-with-artisan perspective governs claim construction should promote the law's transparency, coherence, and predictability, as well as providing a more sensible reference point for its improvement and critique.”
            Start with the claims
              Plain meaning
                “[W]ords will be given their ordinary and accustomed meaning unless it appears that the inventor used them differently.”
                Miken Composites (CAFC 2008)
                  Facts
                    Patent
                      Figures
                      Claim 1: A bat, comprising: a hollow tubular bat frame having a circular cross-section; and an insert positioned within the frame, the insert having a circular cross-section, the insert having first and second ends adjoining the tubular frame, the insert being separated from the tubular frame by a gap forming at least part of an annular shape along a central portion between said first and second ends,
the frame elastically deflectable across the gap to operably engage the insert along a portion of the insert between the insert first and second ends.
                      Claim 18: A bat, comprising: a hollow tubular bat frame having a small-diameter handle portion and a large-diameter impact portion having a circular cross-section with an inner and outer diameter; at least one insert having a substantially circular cross-section with an outer diameter less than the inner diameter of the frame impact portion, the insert being held within the impact portion; and the impact portion being inwardly elastically deflectable
such to establish a tight interference fit between the insert and the impact portion.
                    Defendant’s carbon bat made differently
                      An internal component is first fabricated by rolling alternate layers of preimpregnated carbon fiber reinforced/epoxy tape, polypropylene shrink tape and nylon shrink tape over a mandrel, curing the component at an elevated temperature, removing the external layers of shrink tape and then dipping the component into a release agent.   Each internal component is comprised of two layers of carbon fiber reinforced epoxy/tape and the placement and quantity of shrink tape layers vary slightly depending on the specific bat.   Dry pre-woven fabrics are then tightly drawn over the internal component, and the entire assembly is infused with resin.
                  holding
                    "insert" = something put inside, not a layer
                      We note first that nothing in the claims or specification indicates, explicitly or implicitly, that the inventor used the term in a novel way or intended to impart a novel meaning to it.   To the contrary, the claims and written description of the ′ 398 patent consistently use the term “insert” in the sense of its ordinary meaning as “something inserted or intended for insertion.”   Webster's II New College Dictionary (3d ed.2005);  see also Webster's Third New International Dictionary Unabridged (1993) (defining “insert” as “something that is inserted or is for insertion”);  ′398 patent col.3 l.5 (“the insert is inserted into the tubular frame 11”);  id. col.4 ll.24-28 (“the insert 18 is coated with the lubricant before being inserted into the tubular frame 11”).
                      Had the patentee, “who was responsible for drafting and prosecuting the patent, intended something different, it could have prevented this result through clearer drafting.”  ...
                      Moreover, the parties have presented no evidence to suggest that the term “insert” in the context of the patent has a particular meaning differing from the ordinary and customary meaning in the field of art encompassed by the ′398 patent.   The term “insert” is a common term used to denote structure.   To contend, however, as Wilson does, that it does not matter whether an insert is placed into a pre-existing frame or whether a frame is built around it ignores that ordinary and customary meaning, notwithstanding Wilson's attempts to categorize the term “insert” as “purely structural.”
                        The issue would have been different if the claims contained the language argued in Wilson's briefs;  to wit, “internal structural member,” Wilson Br. at 31, 38, or “multi-wall product,” Reply Br. at 3, but they do not.   It is the language of the claims not the argument that governs.
              "substantially as described" = surplusage
            Roles of the specification
              Guidance may be sought from the specification only if a claim recites a term in need of definition
              Don't read into a claim limitations from the specification
              Subject matter disclosed but not claimed is dedicated to the public
                Unique Concepts (CAFC 1991)
              “Every patentee may be his own lexicographer.”
                explicit definitions
                implicit definitions
                  Nystrom (CAFC 2005)
                    consistent use in specification of "board" as wood confines meaning of "wood" in claim
                disclaimers
                  in specification or prosecution, patentee may disclaim a broad interpretation of a term
                    Cultor (CAFC 2000)
            Roles of extrinsic evidence
              Guidance may be sought from extrinsic evidence only if intrinsic evidence is ambiguous
                Vitronics (CAFC 1996)
            Resolving ambiguity
              Avoid claim interpretations that lead to redundancy (claim differentiation)
              Interpret an ambiguous claim so as to “secure to the patentee his actual invention”
                “[A] claim interpretation that would exclude the inventor's device is rarely the correct interpretation”
                  Vitronics; Elekta Instrument (2000)
              Interpret an ambiguous claim so as to preserve its validity
                e.g., Wright (1910)
                now seen as "last resort"
                  MBO Labs (CAFC 2007)
                competing canon: invalidate ambiguous claim as failing definiteness or enablement requirement
                  Liebel Flarsheim (CAFC 2007)
              Interpret an ambiguous claim against the patentee
                cf. adhesion contracts
            Generous interpretation of pioneering inventions
              Westinghouse v. Boyden Brake (SCOTUS 1898)
                “ To what liberality of construction these claims are entitled depends, to a certain extent, upon the character of the invention and whether it is what is termed, in ordinary parlance, a "pioneer." This word, although used somewhat loosely, is commonly understood to denote a patent covering a function never before performed, a wholly novel device, or one of such novelty and importance as to mark a distinct step in the progress of the art, as distinguished from a mere improvement or perfection of what had gone before.
                  Most conspicuous examples of such patents are the one to Howe, of the sewing machine; to Morse, of the electrical telegraph, and to Bell, of the telephone.
                  The record in this case would indicate that the same honorable appellation might be safely bestowed upon the original air brake of Westinghouse, and perhaps also upon his automatic brake. In view of the fact that the invention in this case was never put into successful operation, and was to a limited extent anticipated by the Boyden patent of 1883, it is perhaps an unwarrantable extension of the term to speak of it as a "pioneer," although the principle involved subsequently, and through improvements upon this invention, became one of great value to the public.
                The fact that this invention was first in the line of those which resulted in placing it within the power of an engineer, running a long train, to stop in about half the time and half the distance within which any similar train had stopped, is certainly deserving of recognition, and _entitles the patent to a liberality of construction which would not be accorded to an ordinary improvement upon prior devices_.
                At the same time, as hereinafter observed, this liberality must be exercised in subordination to the general principle above stated -- that the function of a machine cannot be patented, and hence that the fact that the defendants' machine performs the same function is not conclusive that it is an infringement.
          Method: How one puts these pieces together
            Background
            Phillips (CAFC en banc 2005)
              facts
              Adopt open-ended “holistic” approach to claim interpretation
                "[T]here is no magic formula or catechism for conducting claim construction. Nor is the court barred from considering any particular sources or required to analyze sources in any specific sequence, as long as those sources are not used to contradict claim meaning that is unambiguous in light of the intrinsic evidence. ... The sequence of steps used by the judge in consulting various sources is not important; what matters is for the court to attach the appropriate weight to be assigned to those sources in light of the statutes and policies that inform patent law. In [prior caselaw], we did not attempt to provide a rigid algorithm for claim construction, but simply attempted to explain why, in general, certain types of evidence are more valuable than others."
            Impact of Phillips seems to have been modest
              Wagner and Petheridge (2007)
          Special types of claims
            Means + Function Elements
              examples
                "means whereby said rudder is caused to present to the wind that side thereof nearest the side of the aeroplane having the smaller angle of incidence and offering the least resistance to the atmosphere"
                  Wright patent (1906), claim 11
              112(f)
                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.
                  Only possible with respect to combination patents
                  “Statutory equivalents” interpreted in much the same fashion as judicial equivalents (see below)
                  Statutory equivalents must be in existence at the time the patent is granted
                    Al-Site (CAFC 1991)
                  Popularity has declined because of narrowness of scope
            Product by process claims
              Construed as product patents
              But the process elements serve as limitations
                Abbott (CAFC 2009 en banc)
        Procedure
          Claim construction = Question of Law; no 7th amendment right
            _Markman_ (SCOTUS 1996)
          _Markman_ Hearings
            Claim construction made by judge, not jury, in hearing separate from determination of infringement at trial
            possible placement
              before close of discovery
              after close of discovery, before trial (85%)
                combined with summary judgment proceedings
                separate from summary judgment proceedings
              at conclusion of presentation of evidence, before jury instructions
          PTAB decisions (post-AIA)
            PTAB now obliged to determine “the proper meaning of a claim” -- not, as before, the “broadest reasonable interpretation”
              35 USC 301(d)
              Duty applies to _inter-partes_ review, _ex parte_ reexaminations and _ex parte_ post-grant reviews
          Standard of Review
            Old Rules
              _de novo_
                _Cybor_ (1998)
              reversal rates as of 2007 (Schwartz data)
            New Rules
              _Teva Pharmaceuticals_ (SCOTUS 2015)
              District Court constructions based on intrinsic evidence: _de novo_
              District Court constructions based on extrinsic evidence: “clear & convincing” (more deferential)
                Thus far, this greater degree of deference has made a difference in only one CAFC decision
              PTAB constructions: for now, same standards
              Impact on litigation strategy in the future:
                If District Court judge appears favorable to patentee, present extrinsic evidence
                If District Court judge appears unfavorable, rely exclusively on intrinsic evidence
      Types of Infringement
        Literal
          all-elements rule
            element = any limitation found in the claim language
            Roughly speaking, a limitation is a characteristic or aspect identified in a claim
            CAFC acknowledges that what qualifies as a limitation depends on the level of generality one selects -- but has not provided guidance concerning the choice of level of generality
              e.g., Corning Glass (CAFC 1989)
        Equivalents
          Element-by-element approach
          State of mind
            bad intent on part of defendant is unnecessary
          Tests
            Most commonly used: “Function-way-result”
              D’s product must perform substantially the same function in substantially the same way to achieve the same result as P’s product
            Less commonly used: Are the differences between the two products “Insubstantial”
            Older cases explicitly applied a more lenient test to “pioneering” inventions
              e.g., Perkin-Elmer (CAFC 1987)
              This variant of the doctrine is largely moribund today
          Application to technological advances
            a factor in the analysis is whether PHOSITA, at the time of the infringement, knew of the interchangeability of P's and D's components
              Warner (1997)
            However, DOE can be used to reach equivalent technologies not in existence at the time of the patent grant
              this doctrine is in tension with the enablement principle
              For criticism of the doctrine, see Sarnoff (2004)
          Limits of DOE
            Prior art
              Wilson (CAFC 1990)
                Opinion
                Holding
                  “ Infringement may be found under the doctrine of equivalents if an accused product "performs substantially the same overall function or work, in substantially the same way, to obtain substantially the same overall result as the claimed invention." ...
                  “Even if this test is met, however, there can be no infringement if the asserted scope of equivalency of what is literally claimed would encompass the prior art. ... ..
                    “ [A] patentee should not be able to obtain, under the doctrine of equivalents, coverage which he could not lawfully have obtained from the PTO by literal claims. ...
                    “The doctrine of equivalents exists to prevent a fraud on a patent, ... not to give a patentee something which he could not lawfully have obtained from the PTO had he tried. Thus, since prior art always limits what an inventor could have claimed, it limits the range of permissible equivalents of a claim.”
                  “This issue--whether an asserted range of equivalents would cover what is already in the public domain--is one of law, which we review de novo, ... but we presume that the jury resolved underlying evidentiary conflicts in Wilson's favor...”
                Applied
                  Dimpled golf ball
                  The specific question before us, then, is whether Wilson has proved that a hypothetical claim, similar to claim 1 but broad enough to literally cover Dunlop's balls, could have been patentable. As we have explained above, Dunlop's balls are icosahedral balls with six great circles, five of which are intersected by dimples. The balls contain 432 to 480 dimples, 60 of which intersect great circles in amounts from 4 to 9 thousandths of an inch. In order for a hypothetical claim to cover Dunlop's balls, its limitations must permit 60 dimples to intersect the great circles by at least 9 thousandths of an inch. Thus, the issue is whether a hypothetical claim directed to an icosahedral ball having six great circles intersected by 60 dimples in amounts up to 9 thousandths of an inch could have been patentable in view of the prior art Uniroyal ball.
                  On the Uniroyal ball, the extent to which the dimples intersect the great circles is from 12 to 15 thousandths of an inch. Stated as a percentage of dimple radius, the intersection permitted in the hypothetical claim is 13% or less, and the dimples on the Uniroyal ball intersect by 17% to 21%. The number of dimples which intersect the great circles is also similar for the hypothetical claim and the prior art Uniroyal ball. The pertinent hypothetical claim limitation reads on any ball having 60 or less intersecting dimples. This limitation reads on the prior art Uniroyal ball, which has 30 intersecting dimples. If viewed in relative terms, the hypothetical claim limitation reads on any ball which has less than 14% of its dimples intersecting great circles. Roughly 12% of the dimples on the Uniroyal ball intersect great circles.
                  We hold that these differences are so slight and relatively minor that the hypothetical claim--which permits twice as many intersecting dimples, but with slightly smaller intersections--viewed as a whole would have been obvious in view of the Uniroyal ball. As Dunlop puts it, there is simply "no principled difference" between the hypothetical claim and the prior art Uniroyal ball. Accordingly, Wilson's claim 1 cannot be given a range of equivalents broad enough to encompass the accused Dunlop balls.
            Material disclosed but not claimed
              Johnson (CAFC en banc 2002)
              rationale: purpose of the doctrine is to protect P against evasion through use of unanticipatable substitutes; it should not apply when P was aware of substitutes
            Prosecution History Estoppel
              Principle: Patentee is bound by representations made during patent prosecution and may not use doctrine of equivalents to recover territory she gave up in the course of patent prosecution
                Schriber-Schroth (SCOTUS 1940): an applicant “may not, by resort to the doctrine of equivalents, give to an allowed claim [the] scope which it might have had without the [narrowing] amendments.”
              History
                CAFC (1983-2000): Inconsistent Standards
                  Some panels adopt “Flexible Bar” approach: Patentee permitted to reclaim ground surrendered during prosecution if she could show that the surrender was unnecessary to obtain the patent
                    E.g., Hughes Aircraft (1983)
                  Others adopt “Complete Bar” approach
                    E.g., Kinzenbaw (1984)
                Warner (SCOTUS 1997)
                  Adopt rebuttable presumption that a limitation added in the course of patent prosecution was necessary to obtain the patent
                  Did not resolve the intra-circuit split
                Festo (CAFC en banc 2000): “Complete Bar” Rule
                  PHE applies to all amendments related to statutory requirements for patentability
                    §102, §103, §101, §112
                  Voluntary amendment has the same effect as compelled amendment
                    Serves policies of notice and certainty
                Festo (SCOTUS 2002): “Forseeable Bar” Rule
                  1. A narrowing amendment made to satisfy any requirement of the Patent Statute may give rise to an estoppel
                    E.g., utility; novelty; nonobviousness; written description; enablement; best mode
                  2. Estoppel does not apply, however, when:
                    Equivalents were unforseeable at time of amendment, or
                    Rationale for amendment bears only “tangential relation” to the equivalent at issue, or
                    Patentee could not reasonably be expected to have described the insubstantial substitute
                      PHOSITA standard
                  Patentee bears the burden of proof on issue #2
              Current doctrine
      Secondary Liability
        Contributory Infringement
          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 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.
          scienter requirement
            necessary that the defendant knew that the combination for which he was supplying a part was both patented and infringing
              Aro (1964) (5/4)
              but see Sandisk (ND Cal 2000): necessary only that the defendant knew of the patent and of the activity alleged to be infringing
              rare exception to general pattern of strict liability
          defense: substantial noninfringing uses
            Bard (CAFC 1990)
            cf. Sony; Grokster -- incorporating this principle into the interpretation of contributory infringement in copyright law
          Licensee triangles
        Inducement
          271(b) “Whoever actively induces infringement of a patent shall be liable as an infringer”
          Examples
            distributing brochures advertising sale of infringing equipment;
            instructing in the use of patented process;
            purchase of articles made through unauthorized use of a patented process;
            indemnifying infringer;
            inducing licensee to breach
license agreement
            But: inaction is not inducement
              e.g., failure to take action to prevent corporate affiliates from engaging in infringing behavior is not inducement
                Tegal (CAFC 2001)
          scienter requirement
            Plaintiff must prove that defendant was aware of (a) the patent and (b) the acts induced by defendant constitute infringement
              Global-Tech (SCOTUS 2011)
            Defendant’s good-faith belief that the patent is invalid is not a defense
              Commil (SCOTUS 2015)
    Duration
      Default Term
      Special Rules for Drugs
    Licenses and Assignments
      Estoppel
      Permissible Duration of License Fees
    Defenses and Limitations
      Statute: 35 USC 282(b)
        The following shall be defenses in any action involving the validity or infringement of a patent and shall be pleaded:
        **(1)** Noninfringement, absence of liability for infringement or unenforceability.
        **(2)** Invalidity of the patent or any claim in suit on any ground specified in part II as a condition for patentability.
        **(3)** Invalidity of the patent or any claim in suit for failure to comply with—
          **(A)** any requirement of section 112, except that the failure to disclose the best mode shall not be a basis on which any claim of a patent may be canceled or held invalid or otherwise unenforceable; or
          **(B)** any requirement of section 251.
        **(4)** Any other fact or act made a defense by this title.
      Invalidity
        Procedure
          35 USC 282(a)
            A patent shall be presumed valid. Each claim of a patent (whether in independent, dependent, or multiple dependent form) shall be presumed valid independently of the validity of other claims; dependent or multiple dependent claims shall be presumed valid even though dependent upon an invalid claim. The burden of establishing invalidity of a patent or any claim thereof shall rest on the party asserting such invalidity.
          Claim-by-claim challenge
          Defendant bears the burden of establishing invalidity by clear and convincing evidence
            Microsoft (SCOTUS 2011)
          Illustration: Nonobviousness
        Collateral Estoppel
          Triplett (SCOTUS 1936)
            Finding of invalidity does not bind patentee in subsequent infringement suit against another defendant
          Blonder-Tongue (SCOTUS 1971)
            Final judgment of invalidity *does* bind patentee in subsequent infringement suit against another defendant -- provided that patentee had a full and fair opportunity to litigate the issue
      Sovereign Immunity
        11th Amendment
          The Judicial power of the United States shall not be construed to extend to any suit in law or equity, commenced or prosecuted against one of the United States by Citizens of another State, or by Citizens or Subjects of any Foreign State.
        States
          Florida Prepaid (SCOTUS 1999)
            11th Amendment gives states, their instrumentalities, and their employees acting in official capacity immunity against infringement liability
        Native American Tribes
          Federal courts have long recognized the right of tribes, as “domestic dependent nations” to refuse to be sued in almost all cases
            Inter pares administrative review of patent validity may be included
              Covidien LP v. University of Florida Research Foundation Inc, Case Nos. IPR 2016-01274; -01275, and -01276 (PTAB January 25, 2017)
                “On the whole, considering the nature of inter partes review and civil litigation, we conclude that the considerable resemblance between the two is sufficient to implicate the immunity afforded to the States by the Eleventh Amendment. Although there are distinctions, such as in the scope of discovery, we observe that there is no requirement that the two types of proceedings be identical for sovereign immunity to apply to an administrative proceeding. Further, we note that there are several similarities between civil litigation and inter partes review that are not unlike those compared in Vas-Cath for interferences.”
          Seeking to capitalize on this immunity, Allergan recently assigned to the Saint Regis Mohawk Tribe a set of patents pertaining to Restasis; Tribe issues licenses to Allergan to exploit the patents; Tribe is paid $13M + possible $15M
            Objective: prevent generic firms (e.g., Mylan) from challenging the validity of the patents in inter partes review
            Open questions
              Sham?
              Waiver?
              Will Congress abrogate the immunity or forbid such assignments?
      Conduct by Defendant
        Reverse Equivalents
          Original Doctrine
            Westinghouse (1898)
              Westinghouse pioneered and repeatedly improved the technology for train air brakes -- and obtained a patent on each improvement
                Images
              Boyden’s brake significantly improved the efficiency of a mechanism for allowing a train engineer, in an emergency, to transfer compressed air from the main “train pipe” to the auxiliary reservoir underneath each train car, thus accelerating the application of the brakes in cars located a long distance from the locomotive
              Holding: “But even if it be conceded that the Boyden device corresponds with the letter of the Westinghouse claims, that does not settle conclusively the question of infringement. We have repeatedly held that a charge of infringement is sometimes made out, though the letter of the claims be avoided. The converse is equally true. The patentee may bring the defendant within the letter of his claims, but if the latter has so far changed the principle of the device that the claims of the patent, literally construed, have ceased to represent his actual invention, he is as little subject to be adjudged an infringer as one who has violated the letter of a statute has to be convicted, when he has done nothing in conflict with its spirit and intent.”
          CAFC expresses strong skepticism
            Scripps (CAFC 1991)
            Tate Access Floors (2002)
              “The Supreme Court referred to the reverse doctrine of equivalents in Graver Tank & Manufacturing Co. v. Linde Air Products Co., 339 U.S. 605, 608-609 (1950).   It applies “where a device is so far changed in principle from a patented article that it performs the same or a similar function in a substantially different way, but nevertheless falls within the literal words of the claim.”   In such a case, the reverse doctrine of equivalents “may be used to restrict the claim and defeat the patentee's action for infringement.”
              “**Not once has this court affirmed a decision finding noninfringement based on the reverse doctrine of equivalents**.   And with good reason:  when Congress enacted 35 U.S.C. § 112, after the decision in Graver Tank, it imposed requirements for the written description, enablement, definiteness, and means-plus-function claims that are co-extensive with the broadest possible reach of the reverse doctrine of equivalents.   See .... Hilton Davis Chem. Co. v. Warner-Jenkinson Co., 62 F.3d 1512, 1569 (Fed.Cir.1995) (en banc) (Nies, J., dissenting) (noting that the reverse doctrine of equivalents was originally used by the courts to reduce the scope of broad “means” claims to “cover only what the inventor discloses and equivalents thereof”).
              “Even were this court likely ever to affirm a defense to literal infringement based on the reverse doctrine of equivalents, the presence of **one anachronistic exception, long mentioned but rarely applied**, is hardly reason to create another.”
        Experimental Use
          USA
            Common-law exemption
              Origin: dicta in Whittemore v. Cutter (Story, J.,1813)
                "it could never have been the intention of the legislature to punish a man, who constructed [an infringing device] merely for philosophical ex- periments, or for the purpose of ascertaining the sufficiency of the ma- chine to produce its described effects."
              Constriction
                Roche Products v. Bolar Pharmaceuticals (CAFC 1984)
                  Experimentation on pharmaceutical products does not fall within “experimental use”
                Madey (CAFC 2002)
                  “In Embrex, we followed the teachings of Roche and Pitcairn to hold that the defense was very narrow and limited to actions performed “for amusement, to satisfy idle curiosity, or for strictly philosophical inquiry.”  Embrex, 216 F.3d at 1349.   Further, use does not qualify for the experimental use defense when it is undertaken in the “guise of scientific inquiry” but has “definite, cognizable, and not insubstantial commercial purposes.”   The concurring opinion in Embrex expresses a similar view:  use is disqualified from the defense if it has the “slightest commercial implication.”  Moreover, use in keeping with the legitimate business of the alleged infringer does not qualify for the experimental use defense...
                  “Our precedent clearly does not immunize use that is in any way commercial in nature.   Similarly, our precedent does not immunize any conduct that is in keeping with the alleged infringer's legitimate business, regardless of commercial implications.   For example, major research universities, such as Duke, often sanction and fund research projects with arguably no commercial application whatsoever.   However, these projects unmistakably further the institution's legitimate business objectives, including educating and enlightening students and faculty participating in these projects.   These projects also serve, for example, to increase the status of the institution and lure lucrative research grants, students and faculty.
                  “In short, regardless of whether a particular institution or entity is engaged in an endeavor for commercial gain, so long as the act is in furtherance of the alleged infringer's legitimate business and is not solely for amusement, to satisfy idle curiosity, or for strictly philosophical inquiry, the act does not qualify for the very narrow and strictly limited experimental use defense.   Moreover, the profit or non-profit status of the user is not determinative.”
            Regulatory-review exemption
              Overturn Roche with respect to testing pharmaceutical products for regulatory approval
          Germany
            section 11.1
              “the effect of a patent shall not extend to acts done privately and for non-commercial purposes.”
              a narrow, private-use exemption
            section 11.2
              “the effect of a patent shall not extend to […] acts done for experimental purposes relating to the subject matter of the invention.”
              construed to support a broad "experimenting on" exemption
                Clinical Trials I
              construed to support a reasonably broad regulatory-review exemption
                Clinical Trials II
                however, this does not extend to testing for the purpose
of introducing a generic version at the expiration of the patent term
              does not support an "experimenting with" (research tool) exemption
            section 11.2b
              recently adopted regulatory review exemption, encompassing generics
              implementation of Article 10(6) of EC Directive 2004/27
          UK
            60(5)(a)
              an activity that otherwise “would constitute an infringement of a patent for an invention shall not do so if […] it is done privately and for purposes which are not commercial.”
              narrow private-use exemption
            60(5)(b)
              an activity that otherwise “would constitute an infringement of a patent for an invention shall not do so if […] it is done for experimental purposes relating to the subject-matter of the invention.”
              construed to support a broad experiment-on exemption
                including commercial activity
              no research tool exemption
            60(5)(i)
              recently adopted regulatory review exemption, encompassing generics
              implementation of Article 10(6) of EC Directive 2004/27
              broader than the analogous German provision
                Syed: specifically, § 60(5)(i) seems to provide an exemption to
                  (1) producers of generic replications of chemical drugs or close substitutes of biologics, as well, as perhaps, of rival innovator follow-ons,
                  (2) when the replications or substitutes are for drugs already approved by any EU member state,
                  (3) for activities involved in “conducting a study, test or trial which is necessary for and is conducted with a view to” or “required for” obtaining regulatory approval,
                  (4) when such activities use a patented invention.
                    broader coverage than merely drugs
                    in this respect, like the US
          Japan
            implicit exemption for "private" or "familial" uses of the patented technology
              implicit in Article 68
              likely does not extend to university research
            article 69(1)
              a patentee’s exclusive rights “shall not be effective against the working of the patented invention for experimental or research purposes.”
              seems to support a general "experimenting on" exemption
              seems not to support a general research-tool exemption
                US scholarship to the contrary notwithstanding
              recently (1999) construed to support a regulatory-review exemption for drugs
        Prior User Right
          USA
            35 USC 273
              (a)In General.—A person shall be entitled to a defense under section 282(b) with respect to subject matter consisting of a process, or consisting of a machine, manufacture, or composition of matter used in a manufacturing or other commercial process, that would otherwise infringe a claimed invention being asserted against the person if—
                (1) such person, acting in good faith, commercially used the subject matter in the United States, either in connection with an internal commercial use or an actual arm’s length sale or other arm’s length commercial transfer of a useful end result of such commercial use; and
                (2) such commercial use occurred at least 1 year before the earlier of either—
                  (A) the effective filing date of the claimed invention; or
                  (B) the date on which the claimed invention was disclosed to the public in a manner that qualified for the exception from prior art under section 102(b).
              effective date: 2011/9/16
                applies to all suits filed on or after that date
            defendant, who uses a process (or a product in a process) commercially in US more than 1 year prior to filing (or disclosure) by patentee, may continue to do so
              generalize the prior-user defense that has been available for Business Method Patents since 1999
            Likely impact
              previously, inventor of a new process, considering relying on trade-secret protection instead of patent protection, ran a risk: someone else would invent and patent the process, forcing first innovator to stop
              reduction of that risk (to one-year interval) will increase marginally reliance on trade secrecy, rather than patents
          Other countries
            Many have more generous prior-user rights -- e.g., lacking one year grace period
      Conduct by the Patentee
        Inequitable Conduct
          Applicant have a duty to disclose to PTO all known information pertaining to patentability
          Breach of this duty renders the entire patent unenforceable
          In 2009 and 2011, the CAFC tightened considerably the requirements for establishing this defense
            Defendant must plead IC with particularity
              Exergen (CAFC 2009)
                “ In sum, to plead the "circumstances" of inequitable conduct with the requisite "particularity" under Rule 9(b), the pleading must identify the specific who, what, when, where, and how of the material misrepresentation or omission committed before the PTO. Moreover, although "knowledge" and "intent" may be averred generally, a pleading of inequitable conduct under Rule 9(b) must include sufficient allegations of underlying facts from which a court may reasonably infer that a specific individual (1) knew of the withheld material information or of the falsity of the material misrepresentation, and (2) withheld or misrepresented this information with a specific intent to deceive the PTO.
            Defendant must prove, by clear and convincing evidence:
              (a) the withheld material (or falsely submitted) was material
                _Therasense_ (CAFC en bank 2011): defendant must show either (i) that the examiner would not have allowed a claim if the material had been disclosed or (ii) “affirmative acts of egregious misconduct”
              (b) patentee intended to deceive the PTO
                _Therasense_: requires proof of both (i) knowledge and (ii) deliberate conduct
            Impact
        Delay
          1. Temporal Limit on Recovery of Damages
            35 USC 286
              Except as otherwise provided by law, no recovery shall be had for any infringement committed more than six years prior to the filing of the complaint or counterclaim for infringement in the action.
          2. Laches is no longer available
            Traditional Doctrine summarized in Aukerman (CAFC en banc 1992)
              1. Laches is cognizable under 35 U.S.C. § 282 (1988) as an equitable defense to a claim for patent infringement.
              2. Where the defense of laches is established, the patentee’s claim for damages prior to suit may be barred.
              3. Two elements underlie the defense of laches:
                (a) the patentee’s delay in bringing suit was unreasonable and inexcusable, and
                (b) the alleged infringer suffered material prejudice attributable to the delay. The district court should consider these factors and all of the evidence and other circumstances to determine whether equity should intercede to bar pre-filing damages.
              4. A presumption of laches arises where a patentee delays bringing suit for more than six years after the date the patentee knew or should have known of the alleged infringer’s activity.
              5. A presumption has the effect of shifting the burden of going forward with evidence, not the burden of persuasion.
            SCA Hygiene
              Traditional doctrine reaffirmed by CAFC en banc in 2015 (6/5) despite SCOTUS’ repudiation of laches in the comparable context in copyright law (Petrella)
              SCOTUS overturns CAFC
                Laches cannot be interposed as a defense against damages where the infringement occurred within the period prescribed by §286.
        Equitable Estoppel
          Elements
            1. Patentee misleads defendant into reasonably inferring that patentee does not intend to enforce the patent against him or her
            2. Defendant relies
            3. Due to this reliance, defendant will be materially prejudiced if plaintiff is allowed to proceed
          Effect: entire patent is permanently unenforceable against this defendant
            Bars both legal and injunctive relief
          Preserved by SCOTUS in _SCA Hygiene_ (2017)
            “We note, however, as we did in _Petrella_, that the doctrine of equitable estoppel provides protection against some of the problems
that [the defendat] highlights, namely, unscrupulous patentees inducing potential targets of infringement suits to invest in the production of arguably infringing products.”
        Implied License
          Irrevocable license to use the patent in specific ways may be inferred from the patentee’s conduct, even in the absence of reliance
            Wang Labs (CAFC 1997)
      Exhaustion
        Traditional Rules: broad scope for exhaustion
          Domestic
            Principle: authorized sale of a patented
product to consumers carries with it
right to use and resell that product
            Cases
              Adams v. Burke (US 1873)
                patent on improved coffin lids
                patentee limits geographic area in which assignee may sell coffins
                held: No permissible limits on use of lawfully purchased products
              General Talking Pictures (US 1938)
                patentee of amplifiers used in projectors granted license to ATC, but only to make and sell projectors to homes, not theatres
                ATC sold projectors in violation of that restriction
                  [distinguished by SCOTUS in Lexmark on the basis of this factor]
                held: patentee could prevail in infringement suit against defendant purchaser, who had notice of the restriction but bought amplifiers for use in theatres
              Univis (US 1942)
                price-fixing scheme -- in which patentee on bifocals sought to set prices charged by (a) manufacturer, (b) wholesalers, and (c) retailers -- held unlawful
                General principle: “[T]he authorized sale of an article which is capable of use only in practicing the patent is a relinquishment of the patent monopoly with respect to the article sold. . . . Sale of a lens blank by the patentee or by his licensee is thus in itself both a complete transfer of ownership of the blank, which is within the protection of the patent law, and a license to practice the final stage of the patent procedure.”
                  “The reward [Univis] was demanded and received is for the article and the invention which it embodies . . . . He has thus parted with his right to assert the patent monopoly with respect to it and is no longer free to control the price at which it may be sold either in its unfinished or finished form.”
                  "double-dipping" rationale
          Parallel Importation
            Intermediate position: exhaustion applies to sales of goods overseas unless patentee forbids reimportation when products are first sold
              Curtiss Aeroplane, 266 F. 71 (CA2 1920)
        1986-2008: Contraction
          Domestic
            exhaustion can be overridden by
contract or notice
              Mallinkrodt (CAFC 1992)
                "single use" notice on medical device
                held: patentee has infringement claim against firm that refurbishes the devices in violation of the notice
                Univis distinguished on the ground that this restriction did not violate antitrust laws or other public policies
              R Braun Med. (CAFC 1997)
                conditional sales do not result in exhaustion of patentee's right to control uses of the product
          Parallel Importation
            Jazz Photo (CAFC 2002)
              appears to adopt national exhaustion & reject international exhaustion
              but ruling may be limited to products used and repaired prior to reimportation
            Fuji Photo (CAFC 2005)
              more clearly rejects international exhaustion principle
              rationale: foreign sales cannot be "authorized" under a U.S. patent
                because that would imply extraterritorial application of U.S. patents
        2008-present: Expansion
          Quanta (SCOTUS 2008)
            Facts
              LGE held both product patents on computer chips and process patents on method of making those chips
              LGE granted Intel a license to make chips -- with a restriction:
                purchasers of chips may not combine them with non-Intel parts
              Quanta bought chips from Intel and combined with non-Intel parts
            CAFC:
              Exhaustion not applicable to process patents
              Conditional sales; no exhaustion
            SCOTUS Holding
              Exhaustion is applicable to process patents
              An authorized sale of a patented item terminates all patent rights to that item
              use restrictions therefore invalid against purchasers
            Issues left open:
              application to sales overseas?
                [Now resolved by Lemmark (2017)]
              contract remedies still available?
                potential limitations:
                  privity problems
                  preemption
                  more limited remedies
                potential advantages:
                  fine tune using "public policy" limitations
              can downstream behavior by purchasers retroactively render initial sales "unauthorized"?
                see Hungar memo
              may patentee restrict licensee's freedom to _sell_ products embodying product or process patents (as opposed to restricting post-sale _uses_)?
          Aftermath of Quanta
            Broadcom v. Qualcomm (filed 2008)
              Qualcomm licenses chipset makers -- with a restriction:
                chipsets may only be incorporated into handsets by handset manufacturers who pay Qualcomm a royalty
              Broadcom asserts patent misuse; exhaustion
              settled -- as part of comprehensive settlement -- in 2009
            Transcore (CAFC 2009)
              unconditional covenant not to sue is the functional equivalent of unconditional license
              surprisingly expansive interpretation of "estoppel" doctrine to enlarge the set of patents covered by a prior settlement/covenant
                unclear whether this will affect treatment of the two forms of permission in bankruptcy
            Static Control (EDKy 2009)
              Quanta impliedly overruled Mallinckrodt
              single-use restrictions no longer enforceable
            LGE v. Hitachi (NDCa 2009)
              unconditional foreign sale of a product licensed under a United States patent exhausts the patent holder's rights
              repudiate Jazz Photo as inconsistent with logic of Quanta
              Issues left open:
                May the resultant impediment to geographic price discrimination be avoided through restrictions on the licensee's right to sell?
                May the impediment be avoided by dividing patent holding companies geographically?
            Fujifilm v. Benun (CAFC 2010)
              Quanta did not eliminate the territorial requirement for exhaustion
              semble: US continues to adhere to principle of national exhaustion
        Culmination: Lexmark (SCOTUS 2017)
          “[A] patentee’s decision to sell a product exhausts all of its patent rights in that item, regardless of any restrictions the patentee purports to impose or the location of the sale”
          Complete exhaustion triggered by authorized sale of product
            Either in US or overseas
            Either by patentee or by licensee
      Anticompetitive Conduct
        Patent Misuse
        Reverse-Payment Settlements
        Standard Setting Organizations
          Potential Advantages of SSOs to Participants
            1. increases value of the products produced by all firms in the market
              Sources of increased value
                1. network externalities
                  e.g., AM radio
                  e.g., interoperability of mobile phone systems radically expands direct network effects associated with each system
                  adherents to a standard can share benefits of indirect network effects
                    e.g., standardization of VCR format enabled all manufacturers to share indirect network effects of increased production of movies
                2. increase in functionality: safety and reliability
                  pool knowledge concerning (and control over) attractive features
                3. economies of scale in manufacture of components can reduce production costs for all participants
              Benefits are maximized by anticipatory standard setting
                agree on a common technology prior to the introduction of any products
                contrast Betamax v. VHS
              Magnitude of increased value
                EU Commission Staff estimates that 1% increase in number of standards used in a country correlates with ~1% increase in GDP
            2. Potential IP licensing revenue
              the more closely the standard aligns with a firm's IP, the higher the revenues
              e.g., 4G LTE standard
                Qualcomm owns ~12.5% of SEPs for 4G LTE standard; receives in licensing revenue ~3.2% of price of every 4G LTE phone sold in the world
                  source: Trefis, "Nokia" (2013)
                Nokia owns an even larger share
              from a social-welfare standpoint, this is neutral
                transfer payment; no impact on aggregate welfare
            3. Increase Barriers to Entry
              block competition from a new technology
                e.g., manufacturers of steel electrical conduits combine to form a standard forbidding use of plastic conduits
                e.g., noodles
            4. Opportunities for Rent Seeking
              each participating firms wants disproportionate share of the social benefit of the standard
                illustration
                problematic from standpoint of social welfare
                  a. waste of resources resulting from struggle over shares
                  b. potential sacrifice of safety and efficiency benefits of the standard
          Law Governing SSOs
            SSOs are permitted
              exception to antitrust prohibitions
            But
              1. They must have a legitimate objective
                General guideline: If suppression of competition is the only plausible rationale for the standard, AT violation
                  Allied Tube & Conduit Corp. v. Indian Head, Inc. (SCOTUS 1988)
                However, if there are type #1 benefits, then standard setting is not an AT violation
              2. They must abide abide by procedural requirements designed to reduce abuse
                ANSI Requirements
                  Openness
                  Balance/Lack of Dominance
                  Public Notice
                  Consideration of Views
                  Consensus Voting
                  Appeals Process
                  Written Procedures
                  IP Policy
                    both US and EU treat these policies as contracts: binding on SSO members
                      Broadcom v. Qualcomm (CA3 2007)
              3. Ability of Participating Firms to Use their IP rights is curtailed
                Duty to Disclose
                  Each firm must reveal patents -- or pending applications -- that might be necessary to implement the standard
                  failure to do so may render patents unenforceable against SSO members
                    e.g., In re Dell (1996)
                    Stambler v. Diebold (CAFC 1989)
                    Mitsubishi v. Wang (CA3 1997)
                Duty to License
                  Option #1: Announce in advance refusal to abide by constraints
                  Option #2: Commit to Licensing on Particular Terms. The terms vary. The most common are:
                    a. Royalty-free licensing
                    b. FRAND Licensing
                      Currently dominant interpretations of each term
                        "Fair"
                          license terms would not be considered anticompetitive if imposed by a dominant firm in a market without a standard
                          "unfair" license terms include:
                            bundling
                              to get the attractive license, licensee must license an unattractive product or process
                            free grantbacks
                              license agrees to grant to licensor licensee's patents for free
                            mandatory exclusivity
                              licensee agrees not to license from licensor's competitors
                            agreement not to challenge patents
                              Motorola Mobility (EC April 2014)
                        "Reasonable"
                          general guidelines
                            license fee should approximate the amount that patentee could have collected in the absence of a standard
                            license fees not so high as to render the industry uncompetitive
                            applied more strictly in EU than US
                          Microsoft v. Motorola (W.D. Wash. 2013)
                            reasonable rates determined through application of Georgia-Pacific factors
                            modified by:
                              a. sensitivity to public benefits of standards through increased production and price competition
                              b. need to avoid royalty stacking
                                each licensor enters into licensing negotiations as if it were bilateral
                                net result: higher aggregate licenses than would emerge if all patents were held by a single entity
                                in extreme cases, higher aggregate license fee than licensee can afford
                              c. principle that the license fee should be commensurate with the value the technology in question contributes to the standard and to the product
                            applied:
                              Motorola initially asked for $4B p.a.
                              at trial, Motorola reduced demand to $400M
                              Court concludes that RAND licensing would require Microsoft to pay Motorola $1.8M p.a.
                              Motorola’s refusal to license on such terms and effort to secure an injunction (in Germany) held to be a breach of contract
                                Microsoft can enforce as 3rd party beneficiary
                                Microsoft recovers in damages $15M (for relocating EU distribution center to Netherlands and for atty fess and costs)
                            Affirmed by CA9 (2015)
                        "Nondiscriminatory"
                          same terms offered to all firms in the industry and to all potential entrants
                          OK to vary terms with credit-worthiness, volume
                      Limits on injunctive relief
                        Motorola (Google) v. Apple
                          July 2013, FTC Order accepts settlement
                            Google will not seek injunctions
                            anywhere in the world
                            for 10 years
                            for use of SEPs related to any standard set by any SSO
                            against potential licensees who commit to specified licensing framework
                              good-faith negotiation for 6 months
                              arbitration by AAA, JAMS, or WIPO
                          April 2014, EC accepts settlement
                            If patentee has committed to FRAND licensing of a SEP and a manufacturer has committed to enter into a license on reasonable terms, patentee may not seek an injunction against use of the patented technology
                              Motorola Mobility holds patents on technologies essential to GPRS standard (part of GSM)
                              Apple had agreed to take a license and to abide by determination of reasonable license fees by a German court
                        Samsung v. Apple
                          In 2011, Samsung initiated lawsuit against Apple, seeking injunctions in several EU countries for violation of Samsung's SEPs related to 3G UMTS standard
                          December 2012, EC informs Samsung that it considers the initiative an abuse of dominant position
                          October 2013, Samsung proposes settlement
                          April 2014, EC accepts -- and renders binding under EU antitrust rules -- Samsung's commitments to:
                            not seek injunctions
                            in EEA
                            for 5 years
                            for use of SEPs related to mobile-device standards
                            against potential licensees who commit to a specified licensing framework
                              12-month good-faith negotiation period
                              if negotiations fair, FRAND terms will be determined by a court or mutually agreed arbitrator (with ICC)
                        No consensus yet on whether patentee may seek an injunction in the absence of such a commitment
                Legal Sources of these obligations
                  Multiple systems of relevant norms
                    Implied license
                    Patent Misuse
                    Equitable Estoppel
                    Abuse of Dominant Position (EU)
                    Duty of Good Faith (EU)
                    Treaty of Rome
                      unfair competition and antitrust
                  Mechanisms for Interpretation of those norms
                    Judicial Opinions
                    Orders by Competition Authorities
                      FTC
                      EC
                    Acceptance of Settlements by Competition Authorities
                    Public Statements by Officials
                    Growing use of "voluntary" commitments to define "FRAND"
                      e.g., FRAND "Clarification" Letters by Apple, Microsoft, Google, February 7-8, 2012
                        FRAND Coverage
                        FRAND Obligations
                Proposals for Improvement
                  Approve all arms-length voluntary licenses
                  Obligation on patentees to disclose royalty rates for all potential SEPs prior to adoption of the standard
                    Critique: too many SEPs for ex ante negotiation to be feasible
                    Partly because of incentives for patentees to over-disclosure
                    e.g., ETSI declarations
                  “Pseudo-Pool” (Contreras)
                    “ In a patent pool, multiple patent owners allow a common agent (sometimes one of the patent holders and sometimes a third-party administrator) to grant licenses to patents contributed to the pool, and net revenues are allocated among the pool participants in accordance with a pre-determined formula.”
                    “In broad terms, the pseudo-pool approach incorporates the following components:”
                      1. Declaration of SEPs and FRAND Commitment
                      2. Aggregate Royalty Determination
                      3. Licensing of SEPs
                      4. Allocating the Aggregate Royalty
                      5. Over-Declaration Penalty
                      6. Independent Licensing Permitted
                      7. Opting Out
          Patent Pledges
            Commitments, made outside the context of SSOs, to use (or refrain from using) patents in particular ways
              Examples
              Enforcement theories
                Contract + third-party-beneficiary doctrine
                Promissory Estoppel
                Antitrust violation (FTC)
                Market reliance theory (Contreras 2015)
  IV. Remedies
    Injunctions
      statutory basis: 35 USC 283
        The several courts having jurisdiction of cases under this title [35 USCS §§ 1 et seq.] may grant injunctions in accordance with the principles of equity to prevent the violation of any right secured by patent, on such terms as the court deems reasonable.
      Permanent
        Phase I (prior to formation of Federal Circuit)
          Public interest invoked reasonably often to deny injunctions
          Examples
            Milwaukee (CA7 1934) -- public health
            Nerney (CA2 1936) -- large sunk costs by infringer
            Vitamin Technologists (CA9 1944) -- public health
            Foster (CA2 1974) -- noncompetitor patentee
        Phase II (1982-2006)
          strong presumption in favor of injunctive relief
          Injunction occasionally denied if result would be to hurt public health or welfare
          very rarely denied if only economic injuries would result from grant
            Polaroid (1985)
            but cf. Atari (ND CA 1994)
        Ebay (2006)
          facts
            patent 5,845,265
              Abstract: A method and apparatus for creating a computerized market for used and collectible goods by use of a plurality of low cost posting terminals and a market maker computer in a legal framework that establishes a bailee relationship and consignment contract with a purchaser of a good at the market maker computer that allows the purchaser to change the price of the good once the purchaser has purchased the good thereby to allow the purchaser to speculate on the price of collectibles in an electronic market for used goods while assuring the safe and trusted physical possession of a good with a vetted bailee.
              full patent
          holding
            apply traditional rules of equity in determining whether to grant injunctions in patent cases
              (a) the plaintiff has suffered an irreparable injury;
              (b) monetary damages are inadequate to compensate for that injury;
              (c) the balance of hardships favors the plaintiff; and
              (d) the public interest would not be disserved by a permanent injunction
          concurrences
            Roberts, Scalia, Ginsburg
              exercise of discretion should take into account that injunctions traditionally had issued in vast majority of successful patent suits
            Kennedy, Stevens, Souter, Breyer
              denying injunctions may be appropriate when:
                plaintiff is a patent troll
                patent covers one component of complex product
                patent in question is a business method patent, often of suspect validity
                  "In addition injunctive relief may have different consequences for the burgeoning number of patents over business methods, which were not of much economic and legal significance in earlier times. The potential vagueness and suspect validity of some of these patents may affect the calculus under the four-factor test."
        Phase III (2006 to present)
          Robert Bosch (CAFC 2011)
            finding of validity and infringement does not create presumption of irreparable harm
            but irreparable harm is established where D is a competitor, corroded P's market, and is financially unstable
              even though there are more than two competitors in the market
              and even though P is much larger than D
          “Causal Nexus”
            CAFC, in multiple rounds of Apple v. Samsung, creates, then adjusts, the nexus requirement
              In 2012, CAFC holds (on appeals from two different rulings by Judge Koh) that injury to reputation as an innovator, permanent lost market share, and and permanent lost customers are insufficient to establish irreparable injury; patentee must also show causal nexus between defendant’s infringing conduct and the injuries
                Apple I, 678 F.3d at 1324 (CAFC 2012)
                Apple II, 695 F.3d 1370 (CAFC 2012)
              In Apple IV (2015), CAFC softens the requirement
                “When a patentee alleges it suffered **irreparable harm** stemming from lost sales solely due to a competitor’s infringement, **<u>a finding that the competitor’s infringing features drive consumer demand for its products satisfies the causal nexus inquiry</u>**. In that case, the entirety of the patentee’s alleged harm weighs in favor of injunctive relief. Such a showing may, however, be nearly impossible from an evidentiary standpoint when the accused devices have thousands of features, and thus thousands of other potential causes that must be ruled out. Nor does the causal nexus requirement demand such a showing. Instead, it is a flexible analysis, as befits the discretionary nature of the four-factor test for injunctive relief. We have explained that **<u>proving a causal nexus requires the patentee to show “some connection” between the patented features and the demand for the infringing products</u>**. Apple III, 735 F.3d at 1364. Thus, in a case involving phones with hundreds of thousands of available features, it was legal error for the district court to effectively require Apple to prove that the infringement was the sole cause of the lost downstream sales. The district court should have determined whether the record established that a smartphone feature impacts customers’ purchasing decisions. ... Though the fact that the infringing features are not the only cause of the lost sales may well lessen the weight of any alleged irreparable harm, it does not eliminate it entirely.”
                On remand, District Court finally grants permanent injunction against sales of Galaxy S3 -- largely moot
            _Genband_ (CAFC 2017)
              Reaffirms the soft version of the requirement adopted in Apple IV
                “[I]t has been clear since at least *Apple III* that a standard of the less demanding variety—as an interpretation of “drive demand,” a standard based on “*a* driver” as opposed to “*the* driver,” applied in the multi-consumer, multi-feature context—is the governing one for what suffices to meet the causation component of the requirement of irreparable injury, *i.e.*, that the injury asserted to be irreparable be injury *from the defendant’s use of infringing features*.”
                “The clarified standards set forth in *Apple III* and *Apple IV* govern the causal-nexus inquiry, at least in a multi-purchaser, multi-component situation in which only a component of a larger product or system is covered by the patent in suit. The formulations in those decisions avoid a too-demanding causal-nexus requirement that might be attributed to the “drive demand” language. The standard prescribed by *Apple III* and *Apple IV*, as appropriate to the multi-purchaser, multi-component context, lies between the unduly stringent “sole reason” standard we rejected in *Apple III* and *Apple IV* and the unduly lax “insubstantial connection” standard we rejected in *Apple II*. The standards seek to reflect “general tort principles of causation,” ... and to make proof of causal nexus practical “from an evidentiary standpoint,” ... in a multi- purchaser, multi-component setting.”
                “Where the patentee relies on lost sales to show irreparable injury, it matters what reasons various buyers have for making the purchases lost to the patentee. If all but an insignificant number of purchases from the infringer would have been made even without the infringing feature, the causal connection to the asserted lost-sale-based injury is missing. But this court’s cases have now made clear that, <u>under the causation approach suitable for a multi-feature, multi-purchaser context, the patentee may be able to make the causal connection between infringement and the relevant lost sales through evidence of various kinds, *e.g.*, that the infringing features significantly increased the product’s desirability, that soundly supports an inference of causation of a significant number of purchasers’ decisions.”</u>
          Net impact on injunction sought and granted
            Seaman (2016)
              Factors courts rely on:
                Does P practice the invention?
                  trolls are disfavored
                  but universities and small inventors who license, rather than practice are not penalized
                  *this dovetails with the circumstances governing the advisability of licensing, from a business standpoint -- see IPStrategy
                evidence of actual harm?
                are P & D competitors?
                P's history of licensing patent
                laches
                public interest in health or in product diversity
                  but cf. Amgen v. Roche, finding that the public interest points toward preserving robust incentives for pharmaceutical research
              cases in which injunctions are denied typically result in order of "running royalty"
                Who sets the rate?
                  sometimes set by court
                  sometimes left to jury
                  CAFC advocates ordering parties to negotiate a RR
                How is the rate set?
                  sometimes by extrapolating from pre-judgment royalty
                    but CAFC discourages reliance on pre-judgment royalty
                  some courts look to Georgia-Pacific factors
                  considerable uncertainty and confusion on this issue
            Gupta & Kesan (2016)
      Preliminary
        Traditional Doctrine
          1. Likelihood of success on the merits
            helps if the patent was previously held valid in an infringement action against another defendant
            if defendant raises a substantial question concerning patent validity, no PI
          2. Irreparable harm if relief is denied
            if likelihood of success is high, this will be presumed
            factors that disfavor patentee:
              long delay in bringing suit
              patentee had engaged in a pattern of licensing
          3. Balance of Hardship
            almost always deemed to favor patentee
            e.g., Polaroid (1985)
              grant of PI would cost $200m and put 4000 employees out of work
          4. Impact on the Public Interest
            primary application: public interest in enforcement of patents
        Impact of Ebay
          CAFC takes the position that, after eBay, the standard for a preliminary injunction is the same as the standard for a permanent injunction, with the additional requirement that patentee prove likelihood of success on the merits
          Net impact
            Gupta & Kesan (2016)
    Damages
      Statutory basis
        35 USC 284
          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)
        35 USC 287(a)
          Patentees, and persons making, offering for sale, or selling within the United States any patented article for or under them, or importing any patented article into the United States, may give notice to the public that the same is patented, either by fixing thereon the word "patent" or the abbreviation "pat.", together with the number of the patent, or when, from the character of the article, this can not be done, by fixing to it, or to the package wherein one or more of them is contained, a label containing a like notice. **In the event of failure so to mark, no damages shall be recovered by the patentee in any action for infringement, except on proof that the infringer was notified of the infringement and continued to infringe thereafter**, in which event damages may be recovered only for infringement occurring after such notice. Filing of an action for infringement shall constitute such notice.
          not applicable to processes
      Compensatory Damages
        goal: return patentee to position she would have occupied in absence of infringement
        Lost profits from sale of patented products.
          Patentee must prove:
            1. Demand for patented product
              presumed from act of infringement
            2. Absence of acceptable noninfringing substitutes
              infringer escapes if she can identify a product produced by a third party, with similar price and characteristics, in eyes of consumers
                Relevant market defined by consumer demand
              infringer escapes if she can show that she was ready and able to produce a noninfringing substitute, but didn't for cost reasons
                Grain Processing (1999)
                Applied in Samsung v. Apple (CAFC 2015)
              patentee may rebut by showing that he had stable share of multi-supplier market
                State Industries (1989)
            3. Patentee had the capability to exploit the demand
              Either on its own or by licensing the technology to others
            4. Amount of profit patentee would have made
              lost revenues
                lost sales x pre-infringement prices
              minus incremental costs
                No deduction for fixed costs
                  R&D
                  management
              plus diminution of patentee’s profits from the market he did retain because of "price erosion"
          Profits on contracts to perform services outside of US?
            As yes unclear whether these are collectable
            WesternGeo (CAFC 2017) held no
            Possible cert grant
        Consequential damages
          "Entire Market Value" rule
            Patentee can recover lost profits from sale of components or supplies, provided that they function together with patented components to produce a desire result
              Rite-Hite (1985) -- tort theory
              Nies dissent: P does not have an exclusive property right in market for unpatented products
            E.g., Juicy Whip (CAFC 2004)
          But not decline in stock price
            Rite-Hite
      Reasonable Royalty
        Applicable if patentee is unable to demonstrate compensatory damages
          e.g., usually employed by NPEs
        Approach #1: Hypothetical Negotiation
          royalty that would have been negotiated by willing patentee and willing licensee on the day infringement started
            Panduit
          factors
            industry custom
              profits customary allowed to licensors in the market at the time
                Panduit
              use of “most-favored-nation” clauses
                Stickle (1983)
            availability of acceptable noninfringing substitutes
              Panduit
              cf. standards for compensatory damages
            losses associated with forfeiture of monopoly
              Panduit
            forseeable loss of profits from sales of related products
              Panduit
              Transworld Mfg. (CAFC 1984)
              cf. standards for compensatory damages
            "doing justice to patentee" often tacitly leads to a premium
              Panduit
              Stickle (CAFC 1983)
            Georgia Pacific factors:
              1. The royalties received by the patentee for the licensing of the patent in suit, proving or tending to prove an established royalty.
              2. The rates paid by the licensee for the
use of other patents comparable to the
patent in suit.
                Lucent (CAFC 2009) (“ This factor examines whether the licenses relied on by the patentee in proving damages are sufficiently comparable to the hypothetical license at issue in suit.”)
                In practice, patentee commonly introduces licenses entered into by other players in the industry (as well as the licensee) and argues that they are “comparable”
                  E.g. Lucent (CAFC 2009)
              3. The nature and scope of the license
                exclusive or nonexclusive
                restricted or nonrestricted in terms of
territory or to whom the product may
be sold
              4. The licensor's established policy and
marketing program to maintain his patent
monopoly
                e.g., by not licensing others to use the invention
                e.g., by granting licenses under special conditions
              5. The commercial relationship
between the licensor and licensee
                e.g., whether they are competitors in the
same territory in the same line of business
                e.g., whether they are inventor and promoter
              6. Derivative or convoyed sales
                The effect of selling the patented specialty
in promoting sales of other products of the
licensee;
                the existing value of the invention to the licensor as a generator of sales of his non-patented items; and the extent of such derivative or convoyed sales.
              7. The duration of the patent and
the term of the license.
              8. “The established profitability of the
product made under the patent; its
commercial success; and its current
popularity.”
              9. The utility and advantages of the patent
property over the old modes or devices,
if any, that had been used for working out
similar results.
              10. The nature of the patented invention
                the character of the commercial embodiment
of it as owned and produced by the licensor;
                and the benefits to those who have used the invention.
              11. “The extent to which the infringer has made use of the invention; and any evidence probative of the value of that use.”
              12. The portion of the profit or of the selling price that may be customary in the particular business or in comparable businesses to allow for the use of the invention or analogous inventions.
              13. The value added to the infringer's
product by the invention
                “The portion of the realizable profit that should be credited to the invention as distinguished from non-patented elements, the manufacturing process, business risks, or significant features or improvements added by the infringer.”
                Lucent (CAFC 2009): Factors 10 and 13 “ both aim to elucidate how the parties would have valued the patented feature during the hypothetical negotiation. The evidence can support only a finding that the infringing feature contained in Microsoft Outlook is but a tiny feature of one part of a much larger software program.”
              14. The opinion testimony of qualified experts.
              15. The amount that a licensor (such as the patentee) and a licensee (such as the infringer) would have agreed upon (at the time the infringement began) if both had been reasonably and voluntarily trying to reach an agreement
                that is, the amount which a prudent licensee -- who
desired, as a business proposition, to obtain a license
to manufacture and sell a particular article embodying
the patented invention -- would have been willing to
pay as a royalty and yet be able to make a reasonable
profit and which amount would have been acceptable
by a prudent patentee who was willing to grant a license.
          nonfactors
            infringer's actual profits
              _Radio Steel & Mfg. Co. v. MTD Prods., Inc._ (CAFC 1986) (“The determination of a reasonable royalty ... is based not on the infringer’s profit, but on the royalty to which a willing licensor and a willing licensee would have agreed at the time the infringement began.”)
              _Hanson v. Alpine Valley Ski Area_ (CAFC 1983) (“The issue of the infringer’s profit is to be determined not on the basis of a hindsight evaluation of what actually happened, but on the basis of what the parties to the hypothetical license negotiations would have considered at the time of the negotiations.”).
              But see _Lucent_ (CAFC 2009)
                In Fromson v. Western Litho Plate & Supply Co., 853 F.2d 1568, 1575 (Fed. Cir. 1988), overruled on other grounds by Knorr-Bremse Systeme Fuer Nutzfahrzeuge GmbH v. Dana Corp., 383 F.3d 1337 (Fed. Cir. 2004) (en banc), we observed that the hypothetical negotiation analysis “permits and often requires a court to look to events and facts that occurred thereafter and that could not have been known to or predicted by the hypothesized negotiators.”
Consideration of evidence of usage after infringement started can, under appropriate circumstances, be helpful to the jury and the court in assessing whether a royalty is reasonable. Usage (or similar) data may provide information that the parties would frequently have estimated during the negotiation.
            likelihood that patent would be upheld
        Approach #2: Share of Infringer’s Profit (”Analytical approach”)
          infringer's anticipated net profit margin on sales of infringing products
          minus industry standard profit
          Examples
            TWM Mfg. Co. v. Dura Corp. (CAFC 1986) (describing the analytical method as “subtract[ing] the infringer’s usual or acceptable net profit from its anticipated net profit realized from sales of infringing devices”)
            Energy Transportation (CAFC 2012) (“ Mr. Musika further performed an entirely separate analysis of a reasonable royalty using the method set forth in TWM Mfg. Co. (Fed.Cir.1986). This analysis compared the average expected profit margin on the infringing products, as set forth in Defendants' expert reports, to the industry average expected profit margin. Mr. Musika testified this analysis showed the infringing products garnered a 6.4% increase in expected profit margin based on the technology in the ETG Patents. Mr. Musika's suggested reasonable royalty rates were thus tied to the benefit accorded by the patents at issue.
          25% “rule of thumb”
            For several years, courts commonly used as a “starting point” for a reasonable royalty 25% of the infringer’s profits
            Repudiated in _Uniloc_ (CAFC 2011)
      Prejudgment Interest
        from date of last infringement to date of payment
      Provisional Remedies
        for period between publication of the application and grant of the patent
        "reasonable royalty"
        available retroactively after the grant
        requirements
          invention as claimed in final grant is "substantially identical" to invention as claimed in published application
          infringer had "actual notice" of published application
    Penalties
      Enhanced Damages
        35 USC 284
          “... the court may increase the damages up to three times the amount found or assessed”
        Fluctuations in the standard
          1793-1836: Treble damages are mandatory
          1836: Congress makes enhanced damages (up to treble) discretionary
          _Seymour_ (SCOTUS 1854)
            Purpose is punishment, not compensation
            Not appropriate when defendant acted in ignorance or good faith
            Appropriate when conducts was “wanton or malicious”
          1870 and 1952 Statutory Reforms preserve this system
          Early CAFC opinions
            _Underwater Devices_ (CAFC 1983)
              Defendant’s have affirmative duty of care to avoid patent infringement
            _Kloster Speedsteel_ (CAFC 1986)
              Adverse inferences may be drawn from defendant’s failure to obtain opinion of counsel
            _Knorr-Bremse_ (CAFC 2004)
              Repudiate adverse inferences rule
          _Seagate_ (CAFC en banc 2007) raises the bar
            Patentee must prove, by clear and convincing evidence, both:
              1. Objectively high probability that defendant’s conduct was infringing
                "[W]e overrule the standard set out in Underwater Devices and hold that proof of willful infringement permitting enhanced damages requires at least a showing of objective recklessness.
                "[T]o establish willful infringement, a patentee must show by clear and convincing evidence that the infringer acted despite an objectively high likelihood that its actions constituted infringement of a valid patent. The state of mind of the accused infringer is not relevant to this objective inquiry.”
                Appellate review of this step is _de novo_
              2. Defendant knew or should have known of the risk
                "If this threshold objective standard is satisfied, the patentee must also demonstrate that this objectively-defined risk (determined by the record developed in the infringement proceeding) was either known or so obvious that it should have been known to the
accused infringer"
                Appellate review of this step is _substantial evidence_
            Adverse inferences may not be drawn from:
              invocation of attorney-client privilege
              failure to obtain opinion of counsel
                "Because we abandon the affirmative duty of due care, we also reemphasize that there is no affirmative obligation to obtain opinion of counsel"
            Aftermath of Seagate
              some district courts persist in allowing juries to take into account failure to get an opinion of counsel as one factor in determining willfulness
                see Matthews 2010
          _Halo_ (SCOTUS 2016) lowers the bar
            Proof of objective unreasonableness is no longer necessary
            Patentee need only show that defendant’s conduct was “egregious”
              “willful, wanton, malicious, bad-faith, deliberate, consciously wrongful, flagrant, or—indeed—characteristic of a pirate.”
              “ Consistent with nearly two centuries of enhanced damages under patent law, however, such punishment should generally be reserved for egregious cases typified by willful misconduct.”
            Preponderance of the evidence standard, not clear and convincing
          Aftermath of _Halo_
            District Courts continue to submit question of “willfulness” to juries; instructions vary
            Juries are finding willfulness more often than before Halo
            Judges are exercising their discretion to enhance damages in roughly half of the cases in which juries find wilfulness
        bottom line: best defense remains reasonable reliance on opinion of counsel
          conclusory opinions have no value
            Datascope (CAFC 1989)
          submission of opinion of "opinion counsel" results in waiver of attorney-client privilege work-product protection for "all communications on the same subject matter, as well as any documents memorializing attorney-client communications"
          but not waivers for trial counsel
      Attorney Fees
        35 USC 285
          “The court in _exceptional cases_ may award reasonable attorney fees to the _prevailing party_.”
        _Brooks Furniture_ (CAFC 2005) defines “exceptional cases” narrowly: prevailing party must establish by clear and convincing evidence either:
          (a) “when there has been some material inappropriate conduct,” or
            I.e., “when there has been some material inappropriate conduct related tothe matter in litigation, such as willful infringement, fraud or inequitable conduct in procuring the patent, misconduct during litigation, vexatious or unjustified litigation, conduct that violates Fed. R. Civ. P. 11, or like infractions.”
          (b) when the litigation is both “brought in subjective bad faith” and “objectively baseless.”
            litigation is objectively baseless only if it is “so unreasonable that no reasonable litigant could believe it would succeed” iLOR (CAFC 2011)
        _Octane Fitness_ (SCOTUS 2014) enlarges the set of cases that may qualify as “exceptional”
          “We hold, then, that an “exceptional” case is simply one that stands out from others with respect to the substantive strength of a party’s litigating position (considering both the governing law and the facts of the case) or the unreasonable manner in which the case was litigated.District courts may determine whether a case is “exceptional” in the case-by-case exercise of their discretion, considering the totality of the circumstances.”
            “As in the comparable context of the Copyright Act, “‘[t]here is no precise rule or formula for making these determinations,’ but instead equitable discretion should be exercised ‘in light of the considerations we have identified.’”
          “Finally, we reject the Federal Circuit’s requirement that patent litigants establish their entitlement to fees under§285 by ‘clear and convincing evidence.’”
        Net effect: significant increase both in requests for fee awards and in grants
      Court Costs
        presumption that prevailing party gets costs
    Declaratory Judgment
      Available to putative infringer if he can demonstrate that "the facts alleged, under all the circumstances, show that there is a substantial controversy, between parties having adverse legal interests, of sufficient immediacy and reality to warrant the issuance of a declaratory judgment.”
        Medimmune (SCOTUS 2007)
        not necessary to show that the putative infringer has a reasonable apprehension that the patentee will file suit
        it helps (though may not be essential) for putative infringer to show that he has made meaningful preparation toward potential infringing activities
          Cat Tech (CAFC 2008)
    Summary of Remedial Options
    Commentary
      Lee & Melamed (2016)
        reprint
  V. Design Patents
    Requirements
      Introduction
      Statute
        35 USC 171-173
          171(a): Whoever invents any new, original and ornamental design for an article of manufacture may obtain a patent therefor, subject to the conditions and requirements of this title.
          171(b): The provisions of this title relating to patents for inventions shall apply to patents for designs, except as otherwise provided.
      “Article of manufacture”
        Man-made tangible object
        Parts of objects are acceptable
          In re Zahn
        ephemeral “objects”
are acceptable
          In re Hruby (fountain)
      "Design"
        appearance
        Must be visible at some point
          e.g., In re Webb (CAFC 1990) (hip implant, shown in advertisements)
      “Ornamental"
        Variety of interpretations
          Aesthetically pleasing
          Product of an artistic conception
          Manifesting grace or symmetry of form
        Cannot be “primarily functional”
          LA Gear (CAFC 1988)
            facts
            “ LAG correctly asserts that if a patented design is "primarily functional," rather than primarily ornamental, the patent is invalid. ... When function dictates a design, protection would not promote the decorative arts, a purpose of the design patent statute. ... There is no dispute that shoes are functional and that certain features of the shoe designs in issue perform functions. However, a distinction exists between the functionality of an article or features thereof and the functionality of the particular design of such article or features thereof that perform a function. Were that not true, it would not be possible to obtain a design patent on a utilitarian article of manufacture, see, e.g., Pacific Furniture Mfg. Co. v. Preview Furniture Corp., 800 F.2d 1111 (Fed. Cir. 1986) (design patent for chairs), or to obtain both design and utility patents on the same article, see, e.g., Carman Indus., Inc. v. Wahl, 724 F.2d 932, 938-39 (1958).
            Quoting with approval the ruling of the District Court: “ But every function which [LAG] says is achieved by one of the component aspects of the sole in this case could be and has been achieved by different components. And that is a very persuasive rationale for the holding that the design overall is not primarily functional. Moreover, there is no function which even defendant assigns to the swirl effect around the pivot point, which swirl effect is a very important aspect of the design.”
          Ethicon (CAFC 2015)
            Facts
              “ The patents-in-suit are directed to surgical instruments that use ultrasonic energy created by blades vibrat- ing at high frequencies to cut tissue and blood vessels. These surgical instruments also use the heat generated from the friction of the blade vibrating against the blood vessel to coagulate and seal those blood vessels in order to prevent bleeding.”
              “ The Design Patents claim particular ornamental designs of an ultrasonic surgical device. The D’801 patent claims a particular ornamental design of an inverted “U”-shaped trigger. The D’802 patent claims the overall appearance of the ornamental design of the “U”-shaped trigger and the particular ornamental design of a rounded and fluted torque knob positioned above and forward from the trigger. The D’803 patent claims the overall appearance of the ornamental design of the “U”-shaped trigger and the particular ornamental design of a rounded activation button positioned directly above the trigger. The D’804 patent claims the overall appearance of the ornamental designs of the “U”-shaped trigger, the fluted torque knob, and the rounded activation button, with the torque knob and the button positioned relative to the trigger as in the D’802 and D’803 patents, respectively.
            Patents
              Utility Patents
                US8182501
                  Representative Claims
                    1. A method for sealing a blood vessel of a patient comprising the steps of:
a) obtaining an ultrasonic surgical shears including an ultrasonic surgical blade, a clamping arm operable to open and close toward the blade, a tissue pad attached to the clamping arm, means for providing a clamp force and means for limiting a user applied clamp force, wherein the blade and tissue pad define a clamping surface area so that the applied clamp force does not exceed a clamping pressure of 210 psi at the clamping surface area;...
                    12. An ultrasonic surgical shears comprising:
a) an ultrasonic surgical blade;
b) a clamping arm operable to open and close toward the blade;
c) a tissue pad attached to the clamping arm;
d) means for exerting a predetermined clamping force on the clamping arm, wherein the blade and tissue pad define a clamping surface area so that the clamp force does not exceed a clamping pressure of 210 psi at the clamping surface area; and
e) means for limiting a user applied clamping force.
                US5989275
              Design Patents
                D661801
                D661802
                D661803
                D661804
            Holding
              Articles of manufacture necessarily serve a utilitarian purpose, but design patents are directed to ornamental designs of such articles. 35 U.S.C. § 171. If a particular
design is essential to the use of an article, it cannot be the subject of a design patent. ... We have found designs to be essential to the use of an article when the claimed design is “dictated by” the use or purpose of the article. ... Design patents on such primarily functional rather than ornamental designs are invalid. In determining whether a claimed design is primarily functional, “[t]he function of the article itself must not be confused with ‘functionality’ of the design of the article.”... We have also instructed that the overall appearance of the article—the claimed design viewed in its entirety— is the basis of the relevant inquiry, not the functionality of elements of the claimed design viewed in isolation.
              We have not mandated applying any particular test for determining whether a claimed design is dictated by its function and therefore impermissibly functional. We have often focused, however, on the availability of alternative designs as an important—if not dispositive—factor in evaluating the legal functionality of a claimed design....
              The foregoing evidence does not support the district court’s grant of summary judgment that the claimed designs are primarily functional for two reasons.
                First, the district court’s determination that the designs did not work “equally well” apparently describes the preferences of surgeons for certain basic design concepts, not differences in functionality of the differently designed ultrasonic shears....
                Further, the district court’s functionality inquiry used too high of a level of abstraction. Instead of focusing on whether the specific patented designs had a functional purpose—the continuously curved “U” shape of the open trigger having tapered handles with ends flaring outwards, the football-shape of the activation button, and the asymmetrically-fluted torque knob with a flat front face— the district court focused its PHG analysis on the functional characteristics that any design of an open trigger, button, and torque knob would have for the underlying ultrasonic shears.
      “Original”
        Design cannot have been copied from something else
        Only the designer can obtain the patent
      Novel
        The overall impression of the design must be different from any prior-art reference or device in the eyes of an "ordinary observer"
        The novelty provisions of 102 apply
      Nonobvious
        PHOSITA = designer of ordinary skill of articles of the relevant type
        Relevant prior art = set of articles of manufacture, not design concepts
        Secondary factors are relevant provided applicant can establish a nexus
        Major cases
          Durling (CAFC 1996)
            “In the design patent context, the ultimate inquiry under section 103 is whether the claimed design would have been obvious to a designer of ordinary skill who designs articles of the type involved .... More specifically, the inquiry is whether one of ordinary skill would have combined teachings of the prior art to create the same overall visual appearance as the claimed design. .... Before one can begin to combine prior art designs, however, one must find a single reference, ‘a something in existence, the design characteristics of which are basically the same as the claimed design.’ .... Once this primary reference is found, other references may be used to modify it to create a design that has the same overall visual appearance as the claimed design. .... These secondary references may only be used to modify the primary reference if they are ‘so related [to the primary reference] that the appearance of certain ornamental features in one would suggest the application of those features to the other.’ .”
          LA Gear (CAFC 1988)
            facts
            “ With respect to a design, obviousness is determined from the vantage of "the designer of ordinary capability who designs articles of the type presented in the application." In re Nalbandian, 661 F.2d at 1216,.... LAG argues that the designs would have been obvious because they are "traditional ones consisting of features old in the art." That some components of Avia's designs exist in prior art references is not determinative. " [I]f the combined teachings suggest only components of the claimed design but not its overall appearance, a rejection under section 103 is inappropriate." .... There is no evidence that the overall appearances of the '420 and '301 designs would have been suggested to ordinary shoe designers by the references.
            LAG does not contest the commercial success of Avia's shoes manufactured according to the patented designs, but argues the success is attributable to factors other than the designs themselves, such as advertising. Although commercial success is relevant only if a nexus is proven between the success of the patented product and the merits of the claimed invention, ... Avia did present evidence tending to prove nexus and LAG's conclusory statements to the contrary fail to create a genuine factual dispute.
            In addition, the trial court referred to the accused products as "copies" of the patented designs. ... Copying is additional evidence of nonobviousness. ... LAG's conclusory characterization of the evidence as "speculative" is insufficient to create a genuine factual dispute. On the basis of its evaluation of the four factors outlined above, the court held that the ordinary designer would not have found the '420 or '301 designs, considered as whole designs, obvious in light of the differences between the prior art and the claimed designs. We agree.
          International Seaway (CAFC 2009)
            ‘“For design patents, the role of one skilled in the art in the obviousness context lies only in determining whether to combine earlier references to arrive at a single piece of art for comparison with the potential design or to modify a single prior art reference. Once that piece of prior art has been constructed, obviousness, like anticipation, requires application of the ordinary observer test, not the view of one skilled in the art.”
      Reduced to practice
        three-dimensional embodiment
    Procedure
      simple specification: drawing(s), title, single claim
    Term
      15 years
    Infringement
      “Ordinary Observer” Test
        Origin: _Gorham_ (SCOTUS 1871)
          "[I]f, in the eye of an ordinary observer, giving such attention as a purchaser usually gives, two designs are substantially the same, if the resemblance is such as to deceive such an observer, inducing him to purchase one supposing it to be the other, the first one patented is infringed by the other."
        Courts of Appeals supplement the “ordinary observer” test with “Point of Novelty” Test: The accused device must appropriate the novelty in the patented device which distinguishes it from the prior art
          schematic illustration
          e.g., _Litton_ (CAFC 1984)
            facts
            Holding
              “For a design patent to be infringed, however, no matter how similar two items look, "the accused device must appropriate the novelty in the patented device which distinguishes it from the prior art." .... That is, even though the court compares two items through the eyes of the ordinary observer, it must nevertheless, to find infringement, attribute their similarity to the novelty which distinguishes the patented device from the prior art. (This "point of novelty" approach applies only to a determination of infringement....)
              “The novelty of the '990 patent consists, in light of our analysis in the previous section on the '990 patent's validity, of the combination on a microwave oven's exterior of a three-stripe door frame, a door without a handle, and a latch release lever on the control panel. The district court expressly found, however, that the Whirlpool design had none of these features.”
        In 2008, CAFC retreats in _Egyptian Goddess_ (en banc)
          facts
          Held: apply the ordinary observer test (are the two designs substantially the same to an ordinary observer?) -- with the understanding that the ordinary observer will pay close attention to the prior art
            "When the differences between the claimed and accused design(s) are viewed in light of the prior art, the attention of the hypothetical ordinary observer will be drawn to those aspects of the claimed design that differ from the prior art. And when the claimed design is close to the prior art designs, small differences between the accused design and the claimed design are likely to be important to the eye of the hypothetical ordinary observer."
            Suggest 2-stage analysis:
              “In some instances, the claimed design and the accused design will be sufficiently distinct that it will be dear without more that the patentee has not met its burden of proving the two designs would appear "substantially the same" to the ordinary observer, as required by *Gorham.*
              “In other instances, when the claimed and accused designs are not plainly dissimilar, resolution of the question whether the ordinary observer would consider the two designs to be substantially the same will benefit from a comparison of the claimed and accused designs with the prior art.... Where there are many examples of similar prior art designs, ... differences between the claimed and accused designs that might not be noticeable in the abstract can become significant to the hypothetical ordinary observer who is conversant with the prior art.”
          Applied
            “It is agreed that the general shape of the accused nail buffer at issue in this case is the same as that of the patented buffer design. The difference between the two is that the accused buffer has raised buffing pads on all four sides, while the patented buffer has buffing pads on only three sides.
            “The two closest prior art nail buffers before the court were the Falley nail buffer, which has a solid, rectangular cross section with slightly raised buffers on all sides, and the Nailco patent, which shows a nail buffer design having a triangular shape and a hollow cross section, and in which raised buffing pads are located on all three sides
            “The question before this court under the standard we have set forth above is whether an ordinary observer, familiar with the prior art Falley and Nailco designs, would be deceived into believing the Swisa buffer is the same as the patented buffer....
            “In light of the similarity of the prior art buffers to the accused buffer, we conclude that no reasonable fact-finder could find that EGI met its burden of showing, by a preponderance of the evidence, that an ordinary observer, taking into account the prior art, would believe the accused design to be the same as the patented design.”
        Subsequent Applications of the Test
    Remedies
      35 USC 289
        Whoever during the term of a **patent for a design**, without license of the owner, (1) applies the patented design, or any colorable imitation thereof, to any **article of manufacture** for the purpose of sale, or (2) sells or exposes for sale any **article of manufacture** to which such design or colorable imitation has been applied shall be liable to the owner to the extent of his **total profit,** but not less than $250, recoverable in any United States district court having jurisdiction of the parties.
Nothing in this section shall prevent, lessen, or impeach any other remedy which an owner of an infringed patent has under the provisions of this title, but he shall not twice recover the profit made from the infringement.
      Samsung (SCOTUS 2016)
        “Article of manufacture” can mean a component of a product -- in which case damages for infringement = “total profit” attributable to that component
      Double Patenting
        permissible to secure both a utility patent and a design patent on the same article of manufacture
          lamp example
          See _Ethicon_ (above)
        but only one damages
recovery for infringement
    Data
  II. Requirements
    A. Utility
      statutory basis: 35 USC 101
        “Whoever invents or discovers any new and *useful* process, machine, manufacture, or composition of matter, or any new and *useful* improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of this title.”
      1. “General Utility” (operable)
        no patents for inventions that violate generally accepted scientific principles
          E.g., perpetual-motion machine
            Newman v. Quigg, 877 F.2d 1575 (CAFC 2007)
              “Newman’s energy machine”
        But invention that works imperfectly or crudely or partially passes muster
          DuPont v. Berkeley, 620 F.2d 1247 (CA8 1980)
      2. “Specific Utility” (practical)
        General Principle: very low threshold
          Amusement is sufficient
          Research tools ordinarily pass muster
          not necessary that the invention be commercially viable or superior to alternatives
            Bedford v. Hunt (CCDMass 1817) (Justice Story): “degree of utility” is irrelevant
          not necessary that a compound have received FDA approval
            In re Brana (CAFC 1995)
        Special Cases
          Chemical compounds (or processes for producing them) whose function is uncertain
            Brenner v. Manson (US 1966)
          Expressed Sequence Tags
            2001 Utility guidelines
            In re Fisher (CAFC 2005)
              facts
                “ An EST is a short nucleotide sequence that represents a fragment of a cDNA clone. It is typically generated by isolating a cDNA clone and sequencing a small number of nucleotides located at the end of one of the two cDNA strands. When an EST is introduced into a sample containing a mixture of DNA, the EST may hybridize with a portion of DNA. Such binding shows that the gene corresponding to the EST was being expressed at the time of mRNA extraction.
                Claim 1 of the ’643 application recites: “A substantially purified nucleic acid molecule that encodes a maize protein or fragment thereof comprising a nucleic acid sequence selected from the group consisting of SEQ ID NO: 1 through SEQ ID NO: 5.”
              holding
                “ Turning to the “specific” utility requirement, an application must disclose a use which is not so vague as to be meaningless. Indeed, one of our predecessor courts has observed “that the nebulous expressions ‘biological activity’ or ‘biological properties’ appearing in the specification convey no more explicit indication of the usefulness of the compounds and how to use them than did the equally obscure expression ‘useful for technical and pharmaceutical purposes’ unsuccessfully relied upon by the appellant in In re Diedrich.” In re Kirk, 376 F.2d 936, 941 (C.C.P.A. 1967). Thus, in addition to providing a “substantial” utility, an asserted use must also show that that claimed invention can be used to provide a well-defined and particular benefit to the public.
                “ Regarding the seven uses asserted by Fisher, we observe that each claimed EST uniquely corresponds to the single gene from which it was transcribed (“underlying gene”). As of the filing date of the ’643 application, Fisher admits that the underlying genes have no known functions.”
        Policy Arguments
      3. “Beneficial Utility” (good for society)
        Old rule: no patents for inventions "injurious to the morals, health, or good order of society"
          Bedford v. Hunt
(CCDMass 1817)
(Justice Story)
            Examples: “a new invention to poison people, or to promote debauchery, or to facilitate private assassination”
          Scott & Williams v. Aristo Hosiery, 7 F.2d 1003 (CA2 1925)
            facts
              patent
                “1. A seamless stocking having therein at the back of the leg a structural variation of the knit fabric of which it is composed, imitating the narrowing marks occurring in seamed or other narrowed stockings.”
              purpose
                Patentee argues: ”Unthinking purchasers still depend upon superficial characteristics of the once superior sort of stocking to indicate to them a desirable article of purchase, without examining the stocking for the other structural features upon which a more intelligent choice might be based. Such persons usually prefer, when they can be induced to make a decision on their respective merits, that type of stocking having no seam at the back, which has manifest advantages as an article of wear. The existence of a large body of prejudice of this sort in the minds of the public unfairly militates against the sale of the circular knit articles of hosiery."
              images
            holding
              “This record justifies the claim that the full-fashioned stocking is superior to the seamless stocking. The testimony of the retailers, jobbers, and manufacturers of seamless stockings are all to the effect that they are not the equal of the full-fashioned stocking as a desirable article of wear, because they do not possess the qualities of fit that make it a desirable article that a full-fashioned stocking has been recognized to be. At best, the seamless stocking has imitation marks for **the purpose of deception**, and the idea prevails that with such imitation the article is more salable.”
              “But such accomplishment does not create a new useful discovery or invention, and **it was not the intention of Congress to grant protection to those who confer no other benefit to the public than an opportunity for making the article more salable**.”
        Modern rule: immorality or deceptiveness not relevant
          Illustrations
          contrast EPC 53(a)
          cf. Tamm (2017) in Trademark Context
        Policy arguments
    B. Disclosure
      statutory basis: 35 USC 112
        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 or joint inventor of carrying out the invention.
        The specification shall conclude with one or more claims particularly pointing out and distinctly claiming the subject matter which the inventor or a joint inventor regards as the invention.
      Background
        Anatomy of a patent
        Example
      Aspects
        1. Enablement
          The description must be sufficient to enable a PHOSITA to make and use all of the embodiments of the invention claimed in the patent
          Wands factors
            Quantity of experimentation necessary
              That a PHOSITA would need to do some experimentation to practice the invention is OK, so long as it’s not “undue”
            Amount of guidance provided by the patent
            Presence in the patent of working examples
              Often helpful, but not essential
            Nature of the invention
            State of prior art
            Skill of PHOSITAs
            Predictability of the art
              Mechanical and electrical fields are considered predictable -- and thus enablement requirements are less strict
              Chemical and biological fields are considered unpredictable -- and thus enablement requirements are stricter
            Breadth of claims
          Classic Cases
        2. Best Mode
          Old Rules
            2-step analysis
              Step 1: (Subjective) Did the *inventor* consider a particular way of implementing the invention superior?
                Knowledge or intent of *assignee* irrelevant
                  Glaxo v. Novopharm, 52 F.3d 1043 (CAFC 1995)
              Step 2: (Objective) Did the application adequately enable that particular way?
                I.e., did it provide sufficient information for a PHOSITA to make and use the best mode without undue experimentation
              Chemcast v. Arco, 913 F.2d 923 (CAFC 1990)
            Identifying the best mode
              Not essential that the best mode be singled out (typically as the "preferred embodiment")
              but EA Poe strategy may violate the requirement
            Refinements
              no need to disclose a preferred manufacturing component or method if the patent does not cover it
                Eli Lilly (CAFC 2001)
              no need to disclose an intermediate if it has no effect on properties of final product
                Bayer (CAFC 2002)
              Failure of a foreign application to comply with best-mode requirement may prevent invocation of priority date under Paris Convention
              Temporal Paradox
            Policies
              Pro
                Avoid socially inefficient redundant research
                Foster competition in the manufacture and sale of patent-dependent products immediately after patent expires
              Con
                Adds substantially to cost of patent litigation
          New Rules
            failure to disclose best mode is no longer a ground for challenging the validity of a patent (35 USC 282(b)(3)(A))
              Either in litigation
              Or in post-grant administrative challenges
            But:
              can be used by PTO to reject an application
              And falls within a patent agent’s duty of candor
              Old Rules remain applicable to proceedings commenced before September 16, 2011
        3. Written Description
          Often invoked when applicant amends application
            Pertinent provisions
              Section 120: amended patent application gets priority date of original patent application
              Section 132: amendment may not introduce new matter into the disclosure
            Original disclosure must show that the applicant was then "in possession" of the invention eventually claimed
              Vas-Cath (CAFC 1991)
              Hyatt (CAFC 1998)
              Purdue Pharma (2000)
              Courts are more lax when patent is “pioneering”
          Recently applied by CAFC outside of the extension context: applicant must describe the invention itself, not just how to make and use it (enablement)
            Lilly (1998)
            Gentry Gallery (1998)
            Rochester (CAFC en banc 2004)
            Ariad Pharms v. Lilly, 598 F.3d 1336 (CAFC 2010)(en banc)
              facts
                In 1980s, 13 scientists at Harvard, MIT, and Whitehead Institute identified Nuclear Factor Kappa (NF-kB), a protein that affects gene expression
                On the basis of their discovery of the way the protein worked, they postulated that suppressing NF-kB activity could reduce symptoms of cancer, AIDS, and sepsis
                They proposed that such suppression could be achieved by (a) specific inhibitors; (b) interfering molecules; and (c) decoy molecules
                Universities applied for were granted patents on methods using any of substances that will have this suppressing effect
                  one of the patents is licensed to Ariad
                claims
                  80. [A method for modifying effects of external influences on a eukaryotic cell, which external influences induce NF-κB-mediated intracellular signaling, the method comprising altering NF-κB activity in the cells such that NF-κB-mediated effects of external influences are modified, wherein NF-κB activity in the cell is reduced] wherein reducing NF-κB activity comprises reducing binding of NF-κB to NF-κB recognition sites on genes which are transcriptionally regulated by NF-κB.
                  95. [A method for reducing, in eukaryotic cells, the level of expression of genes which are activated by extracellular influences which induce NF-κB-mediated intracellular signaling, the method comprising reducing NF-κB activity in the cells such that expression of said genes is reduced], carried out on human cells.
                  144. [A method for reducing bacterial lipopolysaccharide-induced expression of cytokines in mammalian cells, which method comprises reducing NF-κB activity in the cells so as to reduce bacterial lipopolysaccharide-induced expression of said cytokines in the cells] wherein reducing NF-κB activity comprises reducing binding of NF-κB to NF-κB recognition sites on genes which are transcriptionally regulated by NF-κB.
                  145. [A method for reducing bacterial lipopolysaccharide-induced expression of cytokines in mammalian cells, which method comprises reducing NF-κB activity in the cells so as to reduce bacterial lipopolysaccharide-induced expression of said cytokines in the cells], carried out on human cells.
              holding (9/2)
                “[A] generic claim may define the boundaries of a vast genus of chemical compounds, and yet the question may still remain whether the specification, including original claim language, demonstrates that the applicant has invented species sufficient to support a claim to a genus. The problem is especially acute with genus claims that use functional language to define the boundaries of a claimed genus. In such a case, the functional claim may simply claim a desired result, and may do so without describing species that achieve that result. But the specification must demonstrate that the applicant has made a generic invention that achieves the claimed result and do so by showing that the applicant has invented species sufficient to support a claim to the functionally-defined genus.”
                [A] sufficient description of a genus ... requires the disclosure of either a representative number of species falling within the scope of the genus or structural features common to the members of the genus so that one of skill in the art can “visualize or recognize” the members of the genus.”
              applied
                Patent provided insufficient detail concerning any of the three types of NF-kB suppressing materials
            AbbVie v. Janssen Biotech, 759 F.3d 1285 (CAFC 2014)
      disaggregation by technology
        Lemley & Burk hypothesis
      Policies
        Purposes of disclosure requirement
          a. Compel patentee to reveal information that will facilitate further technical progress
            “Quid pro quo” of the patent system
            Accelerate, instead of impede, cumulative innovation
          b. Provide competitors guidance in what they may and may not do
            Application of the fundamental principles of the rule of law
          c. Provide courts guidance in understanding the invention and construing the claims
            cf. evidentiary function of formalities
          d. Prevent patentee from locking up a disproportionate territory
            Underlies classic enablement cases and perhaps recent “written description” cases
            Rooted both in concern about cumulative innovation and in considerations of fairness
          e. Reinforce priority principles by denying priority dates to persons who have not yet fully achieved the invention
        Critique: assuming these goals are desirable, the present disclosure rules do not advance them effectively
          Benjamin Roin (2005)
            Reasons why disclosure rules don’t work
              1. Patents are most heavily used for products that can easily be reverse engineered; in those contexts, disclosure in patents is unnecessary
              2. Threat of enhanced damages awards for willful infringement [see Remedies section] prompt firms to discourage their employees from reading patents
              3. Patent applicants commonly omit know-how essential to practicing and invention -- and use language designed to claim as much territory as possible and to obscure technological advances
            Data confirm these problems
              US and European firms rarely report reliance on patents as a source of information concerning technological advances in their fields
              Japanese firms may rely on patents somewhat more
          Coleen Chien (2016)
            Effective disclosure would require revelation of contextual information:
              Whether the patent is commercially important
              Whether the patent is subject to licensing commitments
              Whether the patent is held for defensive or offensive purposes
            Chemistry and drug patents work better than patents in other fields, because they are effectively searchable, are bound into databases of practice, and are often published long before products are commercially available
    C. Novelty and Statutory Bars
      Framework
      Novelty
        USA
          Old Rules
            Govern applications filed or patents granted before March 16, 2013
            First to invent
              35 USC 102(g)
                A person shall be entitled to a patent unless... (g)(1) during the course of an interference conducted under section 135 or section 291, another inventor involved therein establishes to the extent permitted in section 104, that before such person's invention thereof the invention was made by such other inventor and not abandoned, suppressed, or concealed, or
                  applies only to interference proceedings
                    each party claims the same invention
                  Today, inventive activity in any WTO member country counts
                    In US prior to 12/8/93
                    In US or Nafta country prior to 1/1/96
                    In US, Nafta country or WTO country after 1/1/96
                (2) before such person's invention thereof, the invention was made in this country by another inventor who had not abandoned, suppressed, or concealed it.
                  applies even outside of interference proceedings
                  limitations
                    applies only to inventions "in this country"
                    applies only to "inventions" -- i.e., requires reduction to practice
                  principal effect:
                    permit backdating of prior art references to date of invention, rather than date available to the public
                In determining priority of invention under this subsection, there shall be considered not only the respective dates of conception and reduction to practice of the invention, but also the reasonable diligence of one who was first to conceive and last to reduce to practice, from a time prior to conception by the other.
              The patent is awarded to the first person to invent a particular invention
                Interference Scenarios
              Presumptive Date of Invention = date of reduction to practice
                (1) Actual
                  Physical embodiment +
                    RTP of a gene is isolating it (Amgen (1991))
                  Complete embodiment +
                    Equivalents don't count
                  Testing sufficient to demonstrate utility and success
                    Unless their efficacy is obvious (Manville (1990))
                (2) Constructive
                  Patent application
                    including provisional applications
                    Date of the US application governs, not date of prior foreign application
                  Not enabling publication
                Need corroborating evidence
                  "rule of reason" test for sufficiency
                    Brown (CAFC 2002)
              Backdating
                Conception
                  Formulation of the complete means of solving a problem sufficiently detailed that a PHOSITA could RTP without further research
                    (Mahurkar (1996)
                    Conception of gene requires envisioining its "detailed chemical structure"
                      Amgen (1991)
                      Fiers (1993)
                  Idea must encompass all parts of the invention
                  Question of law, not fact
                  Need corroborating evidence
                    "rule of reason" test for sufficiency
                      Brown (CAFC 2002)
                Diligence
                  Actual activity or legitimate excuse during entire critical period
                    Examples of excuses
                  For constructive RTP, applicant charged with diligence or laziness of his attorney
                  Need corroborating evidence
              Forfeiting the benefit of a reduction to practice
                Abandonment, Concealment or Suppression
                  type 1: actively hide your invention from then public
                    commercialization of the output of the invention, while concealing the invention = bad
                      "non-informing public use"
                    commercialization of an object embodying the invention, which is impossible to reverse engineer = OK
                      "hidden public use"
                  type 2: substantial delay in filing for a patent
                    Peeler (CCPA 1976)
                    legitimate excuse for delay: working on refining the invention, and refinements are reflected in ultimate patent application
                  change of heart
                    concealment, followed by renewed efforts to obtain a patent: applicant can claim priority date of renewal of effort
                      Paulik (CAFC 1985)
                    renewed activity in response to appearance of a competitor does not count
                Derivation
                  35 USC 102(f)
                    a person shall be entitled to a patent unless he did not himself invent the subject matter sought to patented
                  X did not invent the "invention" if:
                    (1) Y conceived of it first, and
                    (2) the conception was communicated to X in a fashion that would enable a PHOSITA to practice it
                      i.e., the disclosure by Y must have met standard enablement requirements and must have encompassed all elements of the invention
                      Agawam (1869)
                  Location of the derivation irrelevant
                  Need corroborating evidence
              Joint Invention
                35 USC 116
                  "When an invention is made by two or more persons jointly, they shall apply for patent jointly and each make the required oath, except as otherwise provided in this title. Inventors may apply for a patent jointly even though (1) they did not physically work together or at the same time, (2) each did not make the same type of amount of contribution, or (3) each did not make a contribution to the subject matter of every claim of the patent."
                Requirements
                  Each contributes significantly (measured by quality) to conception or RTP of at least one of the claims, in a fashion other than the explanation of familiar principles
                Effects
                  Each acquired an undivided ownership interest in the entire patent
                  Each may unilaterally license others to practice the invention -- without an accounting
                    35 USC 262
                      In the absence of any agreement to the contrary, each of the joint owners of a patent may make, use, offer to sell, or sell the patented invention within the United States, or import the patented invention into the United States, without the consent of and without accounting to the other owners.
            Fatal conditions --if they occur prior to the invention by the applicant
              "Known or used by others" in USA
                35 USC 102(a)
                  a person shall be entitled to a patent unless -- (a) the invention was known or used by others in this country ..., before the invention thereof by the applicant for patent
                Known
                  = idea sufficiently well developed that a PHOSITA could reduce it to practice
                  What if subsequently forgotten?
                    Gayler (SCOTUS 1850) suggests that forgotten prior art can't anticipate, but current validity is in doubt
                Used
                  = reduced to practice
                    Abandoned (and never perfected) experiments don't anticipate
                "By others"
                  = reasonably accessible to the public
                    National Tractor Pullers (ND Ill. 1980) MD 394
                      drawings on the underside of a kitchen tablecloth, never published, later destroyed don't suffice
                    Rosaire (1955)
                      Non secret use of oil prospecting method is sufficient
                Strict Anticipation Rules
                  Each element of the claimed invention is disclosed in a single prior-art reference or embodied in a single prior-art device or practice
                    That which would literally infringe, if later, anticipates, if earlier
                      No anticipation by equivalents
                    "Inherency" gloss on "disclosed"
                      In re Robertson (1999) MD 361
                      Sprouts Litigation (CAFC 2002) MD 384
                        broccosprouts.com
                      Schering (CAFC 2003) MD 374
                      SmithKline (CAFC 2005)
                  Inadvertent prior art
does not count
                    Mitchell v. Tilghman (US 1873)
                    Edison Light (CA3 1909)
                    In re Seaborg (CCPA 1964)
                  Enablement
                    Reference must be enabling, taking into account the level of ordinary skill in the pertinent art
                      Paulsen (CAFC 1994)
                      enablement applies to making the invention, not using the invention
                        contrast 112
                        Hafner (CCPA 1969) MD 381
                        possible justification: proportionality
                          the recipient of a product patent can reach later discovered uses she neither thought of nor enabled; only fair that she be exposed to anticipation by not fully enabling references -- MD 383
                    Device or Practice need
not be enabling
                      Lockwood (CAFC 1997) MD 385
                  Disclosure of a species anticipates a genus, but not vice versa
              Patented or Described in a Printed Publication anywhere in the world (a)
                35 USC 102(a)
                  A person shall be entitled to a patent unless -- (a) the invention was ... patented or described in a printed publication in this or a foreign country, before the invention thereof by the applicant for patent
                "printed" includes information available in digital form
                publication (or patent) must have been accessible to the public
                  "public" = members of the public interested in the art, exercising reasonable diligence
                  examples of documents deemed publicly accessible
                    typed or mimeographed document deposited in public library
                    scientific paper submitted for refereeing to a journal
                    properly indexed microfilm in Library of Congress
                    catalogued dissertation in university library
                      Hall (1986)
                    instruction sheet distributed on one island in Japan
                    German design patent available for public viewing in Germany
                      Carlson (1992)
                  examples of documents deemed not publicly accessible
                    private papers
                    memos internal to an organization
                    scientific paper delivered orally to an audience
                    improperly indexed microfilm in Library of Congress
                    dissertation deposited in library but not catalogued or shelved
                      Bayer
                    undergraduate thesis deposited and shelved in college library, but catalogued only by author's name
                      Cronyn (1989)
                    documents filed in USSR, inaccessible to Americans
                    grant application sent to outside reviewers
                Strict Anticipation Rules
                  (see above)
              Described in Prior US Patent Applications by Others
                102(e)
                  A person shall be entitled to a patent unless ... (e) the invention was described in (1) an application for patent, published under section 122(b), by another filed in the United States before the invention by the applicant for patent or (2) a patent granted on an application for patent by another filed in the United States before the invention by the applicant for patent, except that an international applicant filed under the treaty defined in Section 351(a) shall have the effects for the purposes of this sub section of an application filed in the United States only if the international application designated the United States and was published under Article 21(2) of such treaty in the English language
                applies only to descriptions of the invention in prior patent applications by others, not claims in prior patent applications by others
                scenarios
                International Novelty Problem
                Strict Anticipation Rules
          New Rules
            Govern applications filed on or after March 16, 2013
            First inventor to file
              Patent Awarded to the first inventor to file
                new 35 USC 102(a)(2)
                  A person shall be entitled to a patent unless ... the claimed invention was described in a patent issued [to another] … or in [another’s] application for patent published … [that] was effectively filed before the effective filing date of the claimed invention.
              Forfeiting the benefit of first to file
                filer derived the invention from someone else
                filer abandons or suppresses the application
            Fatal conditions --if they occur prior to the **filing** by the applicant
              Invention was Patented or Described in a Printed Publication anywhere in the world
                new 35 USC 102(a)
                  A person shall be entitled to a patent unless -- (a) the invention was ... the claimed invention was patented, [or] described in a printed publication, ... before the effective filing date of the claimed invention
                publication (or patent) must have been accessible to the public
                  "public" = members of the public interested in the art, exercising reasonable diligence
                  old cases defining boundary between public and nonpublic are still relevant
                "printed" includes information available in digital form
                Strict Anticipation Rules
                  (see above)
              Invention was on sale anywhere in the world
                new 35 USC 102(a)
                  A person shall be entitled to a patent unless -- (a) the invention was ... on sale before the effective filing date of the claimed invention
                incorporate old rules about "on sale," but now applied throughout the world
              Invention was in public use anywhere in the world
                new 35 USC 102(a)
                  A person shall be entitled to a patent unless -- (a) the invention was ... in public use before the effective filing date of the claimed invention
                incorporate old rules about public use, but now applied throughout the world
                Is a secret noninforming use by the applicant a public use?
                  Merges and Duffy contend yes; this rule survives
              Invention was available to the public anywhere in the world
                new 35 USC 102(a)
                  A person shall be entitled to a patent unless -- (a) the invention was ... otherwise available to the public before the effective filing date of the claimed invention
                similar to old "known or used by others" (in USA)
              Invention was described in an issued US patent or in a US patent application filed before applicant's filing date
                102(a)(2): A person shall be entitled to a patent unless— ... the claimed invention was described in a patent issued [to another] … or **in [another’s] application for patent … [that] was effectively filed before the effective filing date of the claimed invention.**
                This implements the new (qualified) “first-to-file” principle
            Effective date: March 16, 2013
        EPC
      Grace Periods
        EPC & Japan: Absolute Novelty Principle
          No grace period
        USA
          Old Rules
            Fatal conditions -- if they occur more than 1 year before filing a patent application
              "On Sale" in USA
                102(b) A person shall be entitled to a patent unless ...(b) the invention was ... on sale in this country more than one year prior to the date of the application for patent in the United States
                requirements
                  (1) "Definite sale or offer to sell"
                    Of What?
                      Of embodiment of the invention
                      Not of patent rights
                  (2) Stage of Development
                    Possible Triggers
                      Recognize the problem and formulate a general strategy of solving it
                      Conception
                        formulation of the complete means of solving the problem
                        Plan sufficiently detailed that a PHOSITA could RTP without further experimentation
                      "ready for patenting"
                        Pfaff (SCOTUS 1998); Westercham (1998)
                          Facts
                          “[I]t is evident that Pfaff could have obtained a patent on his novel socket when he accepted the purchase order from Texas Instruments for 30,100 units. At that time he provided the manufacturer with a description and drawings that had “sufficient clearness and precision to enable those skilled in the matter” to produce the device. The parties agree that the sockets manufactured to fill that order embody Pfaff's conception as set forth in claims 1, 6, 7, and 10 of the ’377 patent. We can find no basis in the text of §102(b) or in the facts of this case for concluding that Pfaff’s invention was not “on sale” within the meaning of the statute until after it had been reduced to practice.”
                        The inventor has prepared drawings or other descriptions of the invention that are sufficient specific to enable a PHOSITA to practice the invention
                      "Substantial embodiment"
                      "Substantially completed invention"
                      Reduction to practice
                        Completely manufactured or assembled & successfully tested
                      RTP + "on hand"
                  (3) Identity
                    to create a bar, the thing on sale must be:
                      The invention itself, or
                      Something that makes the invention (as claimed) obvious
                        Smith (CAFC 1983)
                        Tec Air (CAFC 1999)
                    Claim-by-claim analysis
                  Narrow "experimental
use" exception
                    Applicable only when the sale was "merely incidental to the primary purpose of experimentation"
                      Scaltec (CAFC 1999);
                      Aqua Marine (CAFC 2001)
                    compare Atlanta Attachment (CAFC 2008)
                "In this Country"
                  Sale
                  Offer to sell
                  Substantial activity prefatory to a sale
              "In public use" in USA
                102(b)
                  A person shall be entitled to a patent unless ... (b) the invention was in public use ... in this country ..., more than one year prior to the date of the application for patent in the United States
                "public"
                  How many embodiments of the invention?
                    Egbert (SCOTUS 1881): 1 is sufficient
                  How many people?
                    Egbert: 1 is sufficient
                  Visibility?
                    Egbert: Not necessary
                    Hall (SCOTUS 1883)
                      Conical bolts in a safe
                      “The invention was complete in those safes. It was capable of producing the results sought to be accomplished, though not as thoroughly as with the use of welded steel and iron plates. The construction and arrangement and purpose and mode of operation and use of the bolts in the safes were necessarily known to the workmen who put them in. They were, it is true, hidden from view after the safes were completed, and it required a destruction of the safe to bring them into view. But this was no concealment of them or use of them in secret. They had no more concealment than was inseparable from any legitimate use of them.
                      Also no experimental-use defense
                        As to the use's being experimental, it is not shown that any attempt was made to see if the plates of the safes could be stripped off, and thus to prove whether or not the conical bolts were efficient. The safes were sold, and apparently no experiment and no experimental use were thought to be necessary. The idea of a use for experiment was an afterthought. An invention of the kind might be in use and no burglarious attempt be ever made to enter the safe, and it might be said that the use of the invention was always experimental until the burglarious attempt should be made, and so the use would never be other than experimental. But it is apparent that there was no experimental use in this case, either intended or actual. The foregoing views, which are controlling to show that claim 3 of the patent in suit cannot be sustained, are in accordance with those announced by this Court in Egbert v. Lippmann
                  How open must the venue be to the public at large?
                    Beachcombers (CAFC 1994); kaleidescope at a party = public
                    Baxter (CAFC 1996): centrifuge in a laboratory = public
                  public distribution of fruits of concealed invention?
                    Peerless Roll Leaf (CA2 1940): not fatal (for concealed product patent)
                    Metallizing Engineering (CA2 1946): fatal (for concealed process)
                      Now extended to product patents
                Exceptions
                  Confidentiality
                    Moleculon (CAFC 1986) Rubik's cube*
                      Tacit agreement by employer not to reveal information prevents disclosure from being public
                      infringer bears burden of demonstrating public use by clear and convincing evidence
                  Experimental Use
                    City of Elizabeth (1878)
                    Lough (CAFC 1996)
                      Facts
                      “ To determine whether a use is "experimental," a question of law, the totality of the circumstances must be considered, including various objective indicia of experimentation surrounding the use, such as the number of prototypes and duration of testing, whether records or progress reports were made concerning the testing, the existence of a secrecy agreement between the patentee and the party performing the testing, whether the patentee received compensation for the use of the invention, and the extent of control the inventor maintained over the testing.... The last factor of control is critically important, because, if the inventor has no control over the alleged experiments, he is not experimenting. If he does not inquire about the testing or receive reports concerning the results, similarly, he is not experimenting.
                      “ In order to justify a determination that legally sufficient experimentation has occurred, there must be present certain minimal indicia. The framework might be quite formal, as may be expected when large corporations conduct experiments, governed by contracts and explicit written obligations. When individual inventors or small business units are involved, however, less formal and seemingly casual experiments can be expected. Such less formal experiments may be deemed legally sufficient to avoid the public use bar, but only if they demonstrate the presence of the same basic elements that are required to validate any experimental program. ...The question framed on this appeal is whether Lough's alleged experiments lacked enough of these required indicia so that his efforts cannot, as a matter of law, be recognized as experimental.
                Activities by third parties
                  Public use by 3rd party of surreptitiously obtained embodiments? Lorenz (CA3 1948)
                  Public distribution by 3rd party of fruits of concealed invention? Gore (CAFC 1983)
                Identity?
                  Suppose I try out an invention in public, then add a minor feature that improves it, file patent application for the improved version. As of what date am I barred?
                  To create a bar, the thing in public use must be:
                    The Invention itself, or
                    Something that makes the invention (as claimed) obvious, or
                    Drawings sufficient to be enabling
                "In this country"
              "Patented or Described in a
Printed Publication anywhere in the world (b)
                102(b)
                  A person shall be entitled to a patent unless ... (b) the invention was patented or described in a printed publication in this or a foreign country..., more than one year prior to the date of the application for patent in the United States
                "patent"
                  Same definition as in context of novelty (102(a))
                "publication"
                  Same definition as in the context of novelty (102(a))
                  Examples
                    Klopfenstein (CAFC 2004)
                      Poster displayed for 3 days at a conference for cereal chemists = printed publication
                    SRI International (CAFC 2008)
                      Posting a paper on one’s own FTP servers and providing the address to the chair of conference panel is not printed publication
              Foreign Patents by
the Applicant
                102(d)
                  A person shall be entitled to a patent unless ...(d) the invention was first patented or caused to be patented, or was the subject of an inventor's certificate, by the applicant or his legal representatives or assigns in a foreign country prior to the date of the application for patent in this country on an application for patent or inventor's certificate filed more than twelve months before the filing of the application in the United States
                Scenarios*
                Effective Date of Foreign Patent Grant
                  Kathawala
                Effective Date of American Patent Application
                  "Continuation in Part" applications?
                  Successive Foreign applications?
                Identity
                  Kathawala issue
                  Obviousness issue
          New Rules
            102(b) now creates a set of 1-year exceptions to the prior art that will invalidate a patent under 102(a)
            Prior Art does not include disclosures (made less than 1 year before filing date) made by the inventor or derived (directly or indirectly) from disclosures made by the inventor
              35 USC 102(b)(1)(A)
                “ A disclosure made 1 year or less before the effective filing date of a claimed invention shall not be prior art to the claimed invention under subsection (a)(1) if— (A) the disclosure was made by the inventor or joint inventor or by another who obtained the subject matter disclosed directly or indirectly from the inventor or a joint inventor...”
              effect: no penalty for disclosing your invention prior to filing
              “Derivation” determined in a “derivation” proceeding
              Open question: Is secret commercial use by inventor permissible during grace period?
                Merges & Duffy argue yes, highlighting absence of adjective “public” in new 102(b)(1)(A)
              New provision will probably be construed broadly, to shield inventors from adverse effects of any of their own actions during grace period
                e.g., sales (either secret or open)
            Prior Art does not include disclosures (made less than 1 year before filing date) made by 3rd parties after a "public" disclosure by the inventor
              35 USC 102(b)(1)(B)
                “ A disclosure made 1 year or less before the effective filing date of a claimed invention shall not be prior art to the claimed invention under subsection (a)(1) if— (B) the subject matter disclosed had, before such disclosure, been publicly disclosed by the inventor or a joint inventor or another who obtained the subject matter disclosed directly or indirectly from the inventor or a joint inventor.
              effect: strong incentive to disclose your invention <u>publicly</u> early
                The set of disclosures by an inventor that will immunize the inventor against adverse effects of subsequent prior art by 3rd parties is narrower than the set of disclosures that an inventor is permitted to make (during the grace period) without forfeiting his/her own patent protection
            Prior Art does not include disclosures (made less than 1 year before filing date) made by 3rd parties in patents or patent applications if:
              3rd party who derived the information from inventor, or
              3rd party filed after public disclosure by inventor, or
              common assignee for the two patent applications
              35 USC 102(b)(2)
                (2) DISCLOSURES APPEARING IN APPLICATIONS AND PATENTS.—A disclosure shall not be prior art to a claimed invention under subsection (a)(2) if—
(A) the subject matter disclosed was obtained directly or indirectly from the inventor or a joint inventor;
(B) the subject matter disclosed had, before such subject matter was effectively filed under subsection (a)(2), been publicly disclosed by the inventor or a joint inventor or another who obtained the subject matter disclosed directly or indirectly from the inventor or a joint inventor; or
(C) the subject matter disclosed and the claimed invention, not later than the effective filing date of the claimed invention, were owned by the same person or subject to an obligation of assignment to the same person.
            Effective date: March 16, 2013
            Net effects
              If P wants patent protection only in the US, new regime will create strong incentives to *disclose* as early as possible
                prevent rivals from patenting
                disable rivals from interfering with P's patenting ability through early disclosure
                grace period ensures no penalty for disclosing before patenting
              If P wants global protection, *file* as soon as possible
                disclosing prior to filing will be fatal in many countries, which lack grace periods
    D. Nonobviousness
      statutory basis:
35 USC 103
        Old Rules
          (a) 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. Patentability shall not be negatived by the manner in which the invention was made.
          (b) [Biotechnological Processes]
            (1) Notwithstanding subsection (a), and upon
timely election by the applicant for patent to
proceed under this subsection, a biotechnological process using or resulting in a composition of matter that is novel under section 102 and nonobvious under subsection (a) of this section shall be considered nonobvious if--
              (A) claims to the process and the composition
of matter are contained in either the same
application for patent or in separate applications having the same effective filing date; and
              (B) the composition of matter, and the process
at the time it was invented, were owned by the
same person or subject to an obligation of
assignment to the same person.
            (2) A patent issued on a process under paragraph (1)--
              (A) shall also contain the claims to the
composition of matter used in or made
by that process, or
              (B) shall, if such composition of matter is
claimed in another patent, be set to expire
on the same date as such other patent,
notwithstanding section 154 [35 USCS § 154].
            (3) For purposes of paragraph (1), the
term "biotechnological process" means--
              (A) a process of genetically altering or
otherwise inducing a single- or
multi-celled organism to--
                (i) express an exogenous nucleotide sequence,
                (ii) inhibit, eliminate, augment, or alter expression of an endogenous nucleotide sequence, or
                (iii) express a specific physiological characteristic not naturally associated with said organism;
              (B) cell fusion procedures yielding a
cell line that expresses a specific protein,
such as a monoclonal antibody; and
              (C) a method of using a product produced
by a process defined by subparagraph
(A) or (B), or a combination of
subparagraphs (A) and (B).
          (c) ["Bass disqualifier"]
            (1) Subject matter developed by another person, which qualifies as prior art only under one or more of subsections (e), (f), and (g) of section 102 of this title, shall not preclude patentability under this section where the subject matter and the claimed invention were, at the time the claimed invention was made, owned by the same person or subject to an obligation of assignment to the same person.
            (2) For purposes of this subsection, subject matter developed by another person and a claimed invention shall be deemed to have been owned by the same person or subject to an obligation of assignment to the same person if--
              (A) the claimed invention was made by or on behalf of parties to a joint research agreement that was in effect on or before the date the claimed invention was made;
              (B) the claimed invention was made as a result of activities undertaken within the scope of the joint research agreement; and
              (C) the application for patent for the claimed invention discloses or is amended to disclose the names of the parties to the joint research agreement.
            (3) For purposes of paragraph (2), the term
"joint research agreement" means a written
contract, grant, or cooperative agreement
entered into by two or more persons or entities
for the performance of experimental,
developmental, or research work in the field
of the claimed invention.
        New Rules
          A patent for a claimed invention may not be obtained, notwithstanding that the claimed invention is not identically disclosed as set forth in section 102, if the differences between the claimed invention and the prior art are such that the claimed invention as a whole would have been obvious before the effective filing date of the claimed invention to a person having ordinary skill in the art to which the claimed invention pertains. Patentability shall not be negated by the manner in which the invention was made.
      History
        United States
          Before 1850, no nonobviousness requirement
          Hotchkiss (SCt 1850): no patents for creations that are “destitute of ingenuity or invention”
            To be patentable, an invention must require “more ingenuity and skill” than that held by “an ordinary mechanic acquainted with the business”
            Doorknob made of clay or porcelain (rather than wood or metal) deemed to fail this requirement
          1850-1950: Vague and Shifting Doctrine
            Cuno Corp. (SCt 1941): need “flash of creative genius”
          1952: Congress adds section 103
          1952-1966: Confusion re impact of 103
          Graham (SCt 1966)
            “Under §103, the scope and content of the prior art are to be determined; differences between the prior art and the claims at issue are to be ascertained; and the level of ordinary skill in the pertinent art resolved. Against this background the obviousness or nonobviousness of the subject matter is determined. Such secondary considerations as commercial success, long felt but unsolved needs, failure of others, etc., might be utilized to give light to the circumstances surrounding the origin of the subject matter sought to be patented.”
          1966-1982: Circuit courts diverge
            2nd upholds only 4.8% of challenged patents
            8th: 6%
            1st, 3rd, 6th, 7th, 9th, 10th: around 19%
            4th and 5th: around 40%
          1982-2007: Federal Circuit relaxes the standard
            increased reliance on secondary factors
            TSM test
              challenger must identify some teaching, suggestion, or motivation to combine prior-art references
          1973-2004: Changing scope of prior art
            courts gradually expand scope of 103 prior art to match 102
            partially offsetting series of statutes, excluding prior art developed by patentee or affiliates
              "Bass disqualifier"
              AIPA (1999)
              CREATE Act of 2004
          KSR (SCt 2007)
            reject "rigid application" of TSM test
              “ We begin by rejecting the rigid approach of the Court of Appeals. Throughout this Court’s engagement with the question of obviousness, our cases have set forth an expansive and flexible approach inconsistent with the way the Court of Appeals applied its TSM test here....”
              “ Helpful insights, however, need not become rigid and mandatory formulas; and when it is so applied, the TSMtest is incompatible with our precedents. The obviousness analysis cannot be confined by a formalistic conception ofthe words teaching, suggestion, and motivation, or by overemphasis on the importance of published articles and the explicit content of issued patents.”
            Express skepticism concerning non-obviousness of combination patents
              “ The combination of familiar elements according to known methods is likely to be obvious when it does no more than yield predictable results. “
              “ When a work is available in one field of endeavor, design incentives and other market forces can prompt variations of it, either in the same field or a different one. If a person of ordinary skill can implement a predictable variation, §103 likely bars its patentability. For the same reason, if a technique has been used to improve one device, and a person of ordinary skill in the art would recognize that it would improve similar devices in the same way, using the technique is obvious unless its actual application is beyond his or her skill.”
            Suggest revival of “obvious to try” as one way of establishing obviousness
              “ The same constricted analysis led the Court of Appeals to conclude, in error, that a patent claim cannot be provedobvious merely by showing that the combination of elements was “obvious to try.” ... When there is a design need or market pressure to solve a problem and there are a finite number of identified, predictable solutions, a person of ordinary skill has good reason to pursue the known options withinhis or her technical grasp. If this leads to the anticipated success, it is likely the product not of innovation but of ordinary skill and common sense. In that instance the fact that a combination was obvious to try might show that itwas obvious under §103.”
            increase somewhat the creativity attributed to a PHOSITA
              “ The second error of the Court of Appeals lay in its assumption that a person of ordinary skill attempting tosolve a problem will be led only to those elements of prior art designed to solve the same problem. ... Common sense teaches, however, that familiar items may have obvious uses beyond their primary purposes, and in many cases a person of ordinary skill will be able to fit theteachings of multiple patents together like pieces of a puzzle.”
            Don’t overstate the hazard of hindsight bias
              “ A factfinder should be aware, of course, of the distortion caused by hindsight bias and must be cautious of arguments reliant upon *ex post* reasoning. ... Rigid preventative rules that deny factfinders recourse to common sense, however, are neither necessary under our case law nor consistent with it.”
          AIA
            Relevant date for assessing obviousness is date of filing, not date of invention
            Simplify mechanism for identifying relevant prior art
              Incorporate by reference definition of prior art under 102
              Limited (as before) by requirement that the art be “analogous”
          Empirical studies of the Impact of the Changing Standard
            Sources
              John R. Allison & Mark A. Lemley, Empirical Evidence on the Validity of Litigated Patents, 26 AIPLA Q.J. 185 (1998)
              Sean M. McEldowney, New Insights on the “Death” of Obviousness: An Empirical Study of District Court Obviousness Opinions, 2006 STAN. TECH. L. REV. 4
              Lee Petherbridge & R. Polk Wagner, The Federal Circuit and Patentability: An Empirical Assessment of the Law of Obviousness, 85 TEX. L. REV. 2051 (2007)
              Christopher A. Cotropia, Nonobviousness and the Federal Circuit: An Empirical Analysis of Recent Case Law, 82 NOTRE DAME L. REV. 911 (2007)
              Ali Mojibi, An Empirical Study of the Effect of KSR v. Teleflex on the Federal Circuit’s Patent
Validity Jurisprudence, 20 ALB. L.J. SCI. & TECH. 559 (2010)
              Jennifer Nock & Sreeker Gaddle, Raising the Bar for Nonobviousness: An Empirical Study of Federal Circuit Case Law Following KSR, 20 FED. CIR. B.J. 369 (2011)
              Jason Rantanen, The Federal Circuit’s New Obviousness Jurisprudence: An Empirical Study, 16 STAN. TECH. L. REV. 709 (2013)
              Gregory Mandel, “ A Nonobvious Comparison: Nonobviousness Decisions at the PTAB and in the Federal Courts” (2017)
            Composite findings
            Variables
              Hindsight bias
              Professional Expertise
              Deference
                “Patent claims are presumed valid, and thus ‘an accused infringer must prove invalidity by clear and convincing evidence.’”
                “In addition to the presumption of validity afforded to patented claims, ‘a party challenging validity shoulders an enhanced burden if the invalidity argument relies on the same prior art considered during examination by the U.S. Patent and Trademark Office.’ Put differently, ‘[w]hen no prior art other than that which was considered by the PTO examiner is relied on by the attacker, he has the added burden of overcoming the deference that is due to a qualified government agency presumed to have properly done its job.’”
        Other jurisdictions
      Current doctrine
        Consider three variables:
          (a) scope and content of the prior art
            "prior art" now includes all types of prior art under 102
              including secret prior art under 102(e)
            provided that the prior art in question is "analogous"
              ie., either within the same field of endeavor as the invention
              or reasonably pertinent to the same problem as that addressed by the invention
          (b) gap between prior art and claims
          (c) level of skill in the art
            Factors include:
              Education level of typical worker in the field
              Education level of the inventor(s)
                Daiichi (CAFC 2007)
              Kinds of problems typically encountered in the field
              Pace on innovation in the field
              Sophistication and difficulty of the technology in the field
          “Against this background the obviousness or nonobviousness of the subject matter is determined.”
            Test: Would the invention, as claimed, have been obvious to a PHOSITA
        “Secondary factors”
          commercial success
            must show "nexus" between the invention and the commercial success of the product (or process) embodying it
            Novartis (CAFC 2017) in addition requires demonstration of nexus between _the aspect of the invention that reflects an inventive step_ and commercial success
          long-felt need
          failure of others
          unexpected results
          Skepticism of experts prior to invention
          Industry praise after invention
          copying by others
          public recognition of patentee as the inventor
            e.g., through licensing
          simultaneous invention by others
            currently given very little weight
          Illustration: World Bottling Cap (PTAB 2017)
        Ancillary Tests
          TSM requirement rejected in KSR
            But such motivating circumstances are still relevant
          "obvious to try" test
            At the time of the invention, would it have been obvious to a PHOSITA to try the particularly combination of elements that eventually produced the invention? If so, the invention is obvious.
            rejected by CAFC in In re Deuel (1995)
            Revived by KSR (SCOTUS 2007)
            Current scope of the test varies by CAFC panels
              Leo Pharma 2013
              Sanofi 2014
              Hoffmann 2014
          prior art "taught away"
        Standard of Review
          Nonobviousness is a question of law
            Determinations are thus subject to _de novo_ review
          but depends on factual findings, which are reviewed under different standards:
            if by PTO, "substantial evidence" test
            if by District Court judge, "clearly erroneous" standard
            if by jury, "substantial evidence" test
        Illustration
          Kraft v. Kellogg (2017)
            Patent
            Decision
        Loci of Obviousness Determinations
      Policies
        Welfare Theory
          a. We should not incur unnecessary social costs by extending monopoly protection to inventions that would have emerged (soon) even in the absence of the carrot of a patent
            Roberts v. Sears (CA7 1983)(Posner, J.)
            “ [T]he costs as well as benefits of patent protection are relevant to deciding which inventions should be patentable. The balance tips against protection when the invention is the sort that was likely to be made, and as soon, even if no one could have patented it. In such a case patent protection would have no good incentive effects but would have the usual bad monopoly effects.
            All this is well recognized in the law. The Supreme Court in the _Graham_ case, referring to Thomas Jefferson's views on patent policy, said it was "the underlying policy of the patent system that 'the things which are worth to the public the embarrassment of an exclusive patent,' as Jefferson put it, must outweigh the restrictive effect of the limited patent monopoly. The inherent problem was to develop some means of weeding out those inventions which would not be disclosed or devised but for the inducement of a patent."
            The means chosen was the concept codified in the statutory term "obvious." The term identifies the cases in which patent protection is not necessary to induce invention and would therefore visit the costs of monopoly on the consuming public with no offsetting gains.
              As Professor Kitch has explained, "the basic principle on which the non-obviousness test is based [is that] a patent should not be granted for an innovation unless the innovation would have been unlikely to have been developed absent the prospect of a patent . . . . The non-obviousness test makes an effort, necessarily an awkward one, to sort out those innovations that would not be developed absent a patent system." Kitch, Graham v. John Deere Co.: New Standards for Patents, 1966 Sup. Ct. Rev. 293, 301.
              Now it is true that if the invention, though the sort of thing that ordinarily would be expected to take much time and toil to make, was made in a flash of genius, this does not make it "obvious." That is the force of the last sentence of section 103 ("Patentability shall not be negatived by the manner in which the invention was made"), as explained in the Reviser's Note. Much time and toil may have been spent in getting to the point where the spark of genius could be struck, and in any event people should not be encouraged to do drudge work by making it a condition of obtaining patent protection. But if a court thinks an invention for which a patent is being sought would have been made as soon or almost as soon as it was made even if there were no patent laws, then it must pronounce the invention obvious and the patent invalid.
          b. The non-obviousness requirement helps offset distortions caused by risk aversion
            Robert Merges, “Uncertainty and the Standard of Patentability” (1992), pp. 43-51
            Patent doctrine tempered by non obviousness requirement increases the expected value of risky R&D investments more than the expected value of safe R&D investments
            That, in turn, will mitigate the socially inefficient tendency of R&D managers to select safe investments instead of risky ones, even when the expected values of the former is less than that of the latter
            Illustration
        Fairness Theory
          a. Only especially creative labor merits the reward of intellectual property
            Lawrence Becker, “Deserving to Own Intellectual Property” (1993)
              A ... version of the desert-for-labor argument has to do with the way in which the laborer can come to have special needs that can appropriately be met by the award of property rights. Suppose we argue as follows:
              (a) Laborers sometimes become dependent on their products in a way connected to their identity as persons, so that the welfare
of the product is related directly to their (psychological) integrity or welfare as persons. Let us call this relation identity-dependence.
              (b) Identity-dependence on the products of one's labor constitutes having a basic personal need for the welfare of those products.
              (c) If a basic personal need is generated and sustained by social norms, and if one's meeting that personal need requires the help of additional social norms, then either i) the help should be given, or ii) the need-sustaining norms should be changed.
              (d) Identity-dependence on the products of one's intellectual labor is generated and sustained by social norms that identify human excellence with authorship, originality, and singularity, and which encourage the author-identification of products.
              (e) Ownership norms sometimes help meet the basic personal needs of identity-dependence on the products of one's intellectual labor.
          b. Locke’s “sufficiency” proviso forbids grants of (intellectual) property to things that would soon be invented by others
            Robert Nozick, _Anarchy, State, and Utopia_
              Extending patent protection to an invention that would have emerged (soon) leaves both other inventors and consumers worse off than if not such property rights were available
              Problem could be avoided if “independent invention” were a defense (as it is in copyright law)
                “An inventor's patent does not deprive others of an object which would not exist if not for the inventor. Yet patents would have this effect on others who independently invent the object. Therefore, these independent inventors, upon whom the burden of proving independent discovery may rest, should not be excluded from utilizing their own invention as they wish (including selling it to others). Furthermore, a known inventor drastically lessens the chances of actual independent invention. For persons who know of an invention usually will not try to reinvent it, and the notion of independent discovery here would be murky at best. Yet we may assume that in the absence of knowledge of the invention, for independent discovery.”
  I. Subject Matter
    General Principles
      USA
        Constitution, Art I, Section 8, Clause 8
          "The Congress shall have power … to promote the Progress of science and useful arts, by securing for limited times to authors and inventors, the exclusive right to their respective Writings and Discoveries"
        35 USC 101
          Whoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof, may obtain a patent therefor, subject to the conditions and requirements of this title.”
      EPC
        Art. 52
          (1) European patents shall be granted for any inventions which are susceptible of industrial application, which are new and which involve an inventive step.
          (2) The following in particular shall not be regarded as inventions within the meaning of paragraph 1:
            (a) discoveries, scientific theories and mathematical methods;
            (b) aesthetic creations;
            (c) schemes, rules and methods for performing mental acts, playing games or doing business, and programs for computers;
            (d) presentations of information.
          (3) The provisions of paragraph 2 shall exclude patentability of the subject-matter or activities referred to in that provision only to the extent to which a European patent application or European patent relates to such subject-matter or activities as such.
          (4) Methods for treatment of the human or animal body by surgery or therapy and diagnostic methods practised on the human or animal body shall not be regarded as inventions which are susceptible of industrial application within the meaning of paragraph 1.
            This provision shall not apply to products, in particular substances or compositions, for use in any of these methods.
        Art. 53
          European patents shall not be granted in respect of: (a) inventions the publication or exploitation of which would be contrary to "ordre public" or morality, provided that the exploitation shall not be deemed to be so contrary merely because it is prohibited by law or regulation in some or all of the Contracting States;
          (b) plant or animal varieties or essentially biological processes for the production of plants or animals; this provision does not apply to microbiological processes or the products thereof.
        Art. 57
          An invention shall be considered as susceptible of industrial application if it can be made or used in any kind of industry, including agriculture.
    History (through 2000)
    Specific Subjects
      Naturally Occurring Substances
        Principle: Isolated forms of naturally substances that exhibit properties different from the natural versions may be patented
          Parke-Davis (1911) (adrenalin)
            “[E]ven if it were merely an extracted product without change, there is no rule that such products are not patentable. Takamine [the inventor] was the first to make it available for any use by removing it from the other gland-tissue in which it was found, and, while it is of course possible logically to call this a purification of the principle, **it became for every practical purpose a new thing commercially and therapeutically**. That was a good ground for a patent.” Parke-Davis & Co. v. H.K. Mulford Co., 189 F. 95, 103 (C.C.S.D.N.Y. 1911) (L. Hand)
            Jon Harkness characterizes the decision as an “under-informed mistake”
          Funk Bros. (SCOTUS 1948)
            Facts
              Inventor discovers that certain strains of bacteria that help some plants remove nitrogen from the air do not interfere with one another
              Inventor combines the strains into a single inoculant -- and seeks a patent on it
            Result: Composition is not eligible for protection because inventor did not alter the bacteria
      Genes
        background
        USA
          longstanding position that isolated natural genes are patentable
            thousands of patents issued on this basis
              aprx. 20,000 patents in USA on isolated DNA sequences
            controversy generated by companies' reliance on such patents to charge high prices for genetic tests
          Myriad Genetics
            Facts
              issue: validity of patents on BRCA1 and BRCA2 genes, and on genetic test based upon those genes
              basis for test of vulnerability for breast or ovarian cancer
            Procedural History
              SDNY (March 2010): naturally occurring genes are not patentable
                they are "directed to a law of nature and therefore improperly granted"
              Intense debate over policies implicated by the ruling
                US DOJ, over objections of PTO, supports the ruling
                  although criticizes Judge Sweet's opinion, to the extent it suggested that even manipulated forms of genes are not patentable
                Steven Salzburg endorsement (Forbes 2010)
              CAFC (July 2011) reverses SDNY, upholds validity of patents on genes
              2012: Supreme Court vacates and remands for reconsideration in light of Mayo
              August 2012: CAFC reiterates position in favor of patentability
            SCOTUS
              1. “[G]enes and the information they encode are not patent eligible under §101 simply because they have been isolated from the surrounding genetic material.”
                “Nor are Myriad’s claims saved by the fact that isolating DNA from the human genome severs chemical bonds and thereby creates a nonnaturally occurring molecule. Myriad’s claims are simply not expressed in terms of chemical composition, nor do they rely in any way on the chemical changes that result from the isolation of a particular section of DNA. Instead, the claims understandably focus on the genetic information encoded in the BRCA1 and BRCA2 genes. If the patents depended upon the creation of a unique molecule, then a would-be infringer could arguably avoid at least Myriad’s patent claims on entire genes (such as claims 1 and 2 of the ’282 patent) by isolating a DNA sequence that included both the BRCA1 or BRCA2 gene and one additional nucleotide pair.”
              2. “cDNA does not present the same obstacles to patentability as naturally occurring, isolated DNA segments. As already explained, creation of a cDNA sequence from mRNA results in an exons-only molecule that is not naturally occurring.”
          Impact of Myriad
            Increase in competition in field of genetic testing for breast cancer
            Continued applications for -- and grants of --patents on genes
            Accelerate already ongoing shift away from patents on isolated naturally occurring sequences toward patens on synthetic sequences
            Perhaps increase cost of successful prosecution of gene patent applications, resulting in decrease in percentage of such patent granted to SMEs
        Japan
          Genes, including DNA fragments, whose specific utility is known and disclosed, are patentable
        EPC
          Biotech Directive (1998)
            “ An element isolated from the human body or otherwise produced by means of a technical process, including the sequence or partial sequence of a gene, may constitute a patentable invention, even if the structure of that element is identical to that of a natural element.”
            Highly controversial
              Principal impetus: keep EU competitive with US and Japan in biotechnology
              Not fully implemented until 2005
              Reluctantly adopted by France, Germany, Netherlands
          Incorporated into EPC law through Implementing Regulations
            Rule 26(1)
          ECJ (2001): Patenting of human genetic material does not violate principles of human dignity
          Net effect: An isolated gene is patentable, so long as the applicant specifies its industrial application
            Technical mistakes caused some of Myriad’s EPC BRCA patents to be narrowed, but the EPO rejected all subject-matter challenges to them
          Monsanto v. Cetera (ECJ 2010)
            Facts
              Monsanto holds EPO patents on roundup-ready soybeans (specifically, on the modified soybean DNA sequence that gives the plant resistance to roundup)
                patent from EPO
                but no patent in Argentina
              Cetera grows roundup-ready soybeans in Argentina, then imports soybean meal into Europe
              Monsanto alleges violation of Dutch patent, based upon importation of a product that contains an inactive ("dead") version of the patented gene
              Cetera defends on the ground that Dutch patent law is inconsistent with EU Biotechnology Directive
            Law
              Under EU Biotechnology Directive
                The protection conferred by a patent on a product containing or consisting of genetic information shall extend to all material . . . in which the product is incorporated and in which the genetic information is contained and performs its function.
              But importation of a product containing an inactive form of the patented gene is not infringement
                national patent laws that suggest it is infringement are invalid
            Impact
              considerable uncertainty remains concerning when a gene is inactive
              reflects growing hostility toward expansive deployments of gene patents
      Life Forms
        Microorganisms
          Diamond v. Chakrabarty (1980) (5/4)
            Facts: “This human-made, genetically engineered bacterium is capable of breaking down multiple components of crude oil. Because of this property, which is possessed by no naturally occurring bacteria, Chakrabarty's invention is believed to have significant value for the treatment of oil spills.”
            “The Committee Reports accompanying the 1952 Act inform us that Congress intended statutory subject matter to "include anything under the sun that is made by man." S.Rep.No.1979, 82d Cong., 2d Sess., 5 (1952); H.R.Rep.No.1923, 82d Cong., 2d Sess., 6 (1952).”
            “[T]he patentee has produced a new bacterium with markedly different characteristics from any found in nature and one having the potential for significant utility. _His discovery is not nature's handiwork, but his own; accordingly it is patentable subject matter_.”
        Plants
          International
Agreements
            UPOV
              History
                Union International Pour La Protection des Obtentions Vegetales
                Formed 1961
                Modified 1972, 1978, 1991
                USA joins 1978 version in 1981, with reservation to avoid exclusivity
                USA joins 1991 version in 1999
                Membership: 54 Countries
              Content
                Member states must provide protection for new, distinct, uniform, stable plant varieties
                  Arts. 2, 5-9
                Breeder's rights shall include, with respect to the protected variety and to any "essentially derived" variety, the following exclusive rights: (Art. 14)
                  reproduction
                  conditioning for the purpose of propagation
                  sale or offering to sell
                  importing or exporting
                Exceptions (Arts. 15-16)
                  private and noncommercial acts
                  acts for experimental purposes
                  acts for the purpose of breeding other varieties
                  (optional) farmers' right to save and plant seeds
                Duration (Art. 19)
                  20 years from grant
                  for trees and vines, 25 years from grant
                National Treatment Principle (Art. 4)
                1-year priority right (Art. 11)
            TRIPS
              Member states may decline to provide patent protection for plants -- Art. 27(3)(6)
              But if so, must provide "sui generis" protection
          Plant Protection Act (1930)
            subject matter
              new, manmade plant varieties
                variety = subspecies showing distinctive characteristics
                no protection for discovered naturally occurring varieties
                but protection does extend to "cultivated" new varieties, even if they arise spontaneously
            requirements
              ordinary utility patent requirements, except:
                disclosure and enablement satisfied if written description is as complete as "reasonably possible"
            infringement
              reproduction through grafting or other forms of asexual reproduction, or sale of asexually reproduced copies
              n.a. to reproduction through seeds
              n.a. to independent invention
                Imazio Nursery (CAFC 1995)
            in practice
              shields nurseries against reproduction of ornamental plants and fruits
                examples
              largely irrelevant to food staples
          Plant Variety Protection Act
            Subject Matter
              plant variety = "a plant grouping within a single botanical taxon of the lowest rank"
                7 USC 2401(a)(9)
            Requirements
              new
                as of the time of application, the variety has not been sold or given, by the breeder or with his consent, to anyone
                  in US, more than 1 year before
                  outside the US, more than 4 years before (or 6 years before, if it's a tee or vine)
              distinct
                clearly differentiable from any other known variety
              uniform
                any variations are describable, predictable, and commercially acceptable
              stable
                if reproduced, will remain stable to essential characteristics
            Procedure
              examination by Plant Variety Protection Office (within USDA)
                seed deposit
              administrative appeal to Plant Variety Protection Board
              judicial appeal to District Court or CAFC
            Infringement
              sell, offer to sell, or transfer possession
                Delta & Pine Land Co. (CAFC 1999): requires scienter
                  defendant knows or has reason to know that transfer is infringing
              import or export
              reproduce
              use the variety in producing a hybrid
            Exceptions
              "any act done privately and for noncommercial purposes"
              plant breeding
              bona fide research
              "saved seed" for use on the farm
                Asgrow (1995): a farmer who meets the requirements set forth in sec 2543's proviso may sell for reproductive purposes only such seed as he has saved for the purpose for replanting his own acreage
              compulsory license
                Secretary of Agriculture may order, for 2 years, provided
                  (a) reasonable royalty
                  (b) necessary to maintain adequate food supply
            Scope
              the variety itself
              a variety "essentially derived" from the protected variety
              no equivalents doctrine
              practical effect: almost impossible to infringe unless you begin with the protected variety itself
                analogous to copyright
                contrast patent
            Term
              20 years from grant
              25 years from grant for trees and vines
            In practice
              primarily used to shield new forms of staple crops
                soybeans
                corn
              Usage data
              very little litigation
or licensing
                suits mostly against farmers who exceed "saved seed" exemption
              easy for competitors to circumvent
            Is it effective?
              i.e., does it stimulate R&D in plant varieties?
              enthusiasts
                Gasser & Fraley, "Genetically Engineering Plants" (1989)
                Lesser & Mason, Economic Analysis of the PVPA (1985)
                Evanson, "IP Rights and Agribusiness" (1983)
              skeptics
                Kloppenberg, "First the Seed" (1988)
                Butler (1985 & 1996)
                Alston & Venner, "The Impact of the PVPA on Wheat" (2000)
                Janis & Kesan, "Sound and Fury" (2002)
          Utility Patents
            extended to new, manmade plant varieties
              Hibberd (1985)
                PTO practice post Hibberd: 1800 patents on plants
              Pioneer Hi-Bred (2001)
            requirements
              utility
              novelty
              nonobviousness
              disclosure
                PTO Regs: depositing seeds in depository open to the public is sufficient
            infringement
              "make, use, or sell" the patented plant
                does this reach "innocent infringement"?
                  e.g., by pollen drift
                Cf. Schmeiser v. Monsanto (Canada 2002)
                  Schmeiser's replication of "Roundup Ready" canola was not innocent because he know or had reason to know of the patent
                North Dakota statute: patentees must designate "independent laboratories" to test crops to determine patent infringement
              potentially more expansive claims than under PPA or PVPA
              equivalents doctrine
            exceptions
              experimental use
                Should it be expanded to parallel breeder's exemption under PVPA?
              no "saved seed" exception
                Monsanto v. McFarling (CAFC 2002)
            usage
              likely to rise with perceived inadequacy of PVPA
              likely to rise with increased economic importance of genetically modified crops
          Nonpatent forms of protection
            Trademark
              Passing Off Theory
                Y produces new plant variety
                advertises and sells seeds as X's
              Reverse Passing Off Theory
                Y buys X's seeds, reproduces them
                sells them as Y's new variety
              Registration Systems
                Creator of a new plant variety registers it
                Creator is then protected against passing off by competitors
                France, Netherlands, Germany
            Contracts
              "Bag Tag" Licenses
                "Resale of this seed for planting is strictly prohibited"
                seeds may be used for planting a commercial crop only in a single season
                purchaser may not save any seed for replanting or supply saved seed to anyone for replanting
              enforceable?
                arguably illegitimately curtails doctrine of patent exhaustion
                arguably a contract of adhesion
                  cf. Clevenger dissent in McFarling
            Technology
              terminator genes
        Animals
          Animals are patentable
            Ex parte Allen (1987)
            ALDF v. Quigg (CAFC 1991)
          No patents on claims on or "encompassing" a human being
            Newman (PTO final rejection (2004))
            Weldon Amendment (2004)
            AIA 33(a) (2011)
          Cloned animals are not patentable
            In re Roslin Institute (CAFC 2014)
              “ Here, as in Myriad, Roslin "did not create or alter any of the genetic information" of its claimed clones, "[n]or did [Roslin] create or alter the genetic structure of [the] DNA" used to make its clones. Myriad, 133 S.Ct. at 2116. Instead, Roslin's chief innovation was the preservation of the donor DNA such that the clone is an exact copy of the mammal from which the somatic cell was taken. Such a copy is not eligible for patent protection.”
        Stem Cells
          Patentable in US, China, India
          Brustle v. Greenpeace (ECJ 2011)
            Stem cell patents challenged as inconsistent with EU Biotechnology Directive
            Holding: An invention is excluded from
patentability if the process requires either
the prior destruction of human embryos or
their prior use as base material, even if the
application does not refer to the use of
human embryos. Furthermore, the CJEU
concluded that scientific research entailing the use of human embryos cannot
access the protection of patent law
      Business Methods
        USA
          Examples of BMPs
          History of Legal Treatment
            Business Methods long said to be outside patent protection -- abstract ideas
              Hotel Security (1908)
              Sterling (1934)
              Wait (1934)
              Patton (1942)
              Loew's Drive-in (1949)
              Murray (1988)
            Relaxation
              1980s and 1990s: PTO grants growing number of BMPs
                many under auspices of loosening rules concerning software patents
              1996: PTO guidelines instruct examiners to treat BMPs like any other process patent applications
              State Street Bank (CAFC 1998)
                facts
                  innovation
                  the patent
                holding
                  applications for BMPs should be treated like any other process patent applications
                  a process is patent-eligible if it produces “a useful, concrete, and tangible result” — such as the transformation of financial data from one form to another form.
            Backlash
              Prior User right (1998)
                Section 273: Defense to a suit for infringement of a BMP: defendant had in good faith both:
                  (a) reduced the invention to practice more than 1 year before filing date and
                  (b) commercially used the invention prior to filing date
              Bounty Quest
              Nonobviousness challenges
                e.g., Amazon "one click"
              SPER (March 2000)
                more examiners for Class 705 hired
                duty to consult more prior-art references
                each allowed application is reviewed by second examiner
              eBay
                Justice Kennedy concurrence
              Comiskey (CAFC 2007)
                a claim reciting an algorithm or abstract idea can state statutory subject matter only if, as employed in the process, it is embodied in, operates on, transforms, or otherwise involves another class of statutory subject matter, i.e., a machine, manufacture, or composition of matter
                the present statute does not allow patents to be issued on particular business systems—such as a particular type of arbitration—that depend entirely on the use of mental processes
            Bilski (2010)
              facts
                method of trading weather risks
                claim 1:
                  1. A method for managing the consumption risk costs of a commodity sold by a commodity provider at a fixed price comprising the steps of:
                  (a) initiating a series of transactions between said commodity provider and consumers of said commodity wherein said consumers purchase said commodity at a fixed rate based upon historical averages, said fixed rate corresponding to a risk position of said consumer;
                  (b) identifying market participants for said commodity having a counter-risk position to said consumers; and
                  (c) initiating a series of transactions between said commodity provider and said market participants at a second fixed rate such that said series of market participant transactions balances the risk position of said series of consumer transactions.
                no reference to computer
software or apparatus
              procedural history
                examiner rejects
                BPAI affirms
                CAFC orders en banc review
                  (1) Whether claim 1 of the 08/833,892 patent application claims patent-eligible subject matter under Section 101?
                  (2) What standard should govern in determining whether a process is patent-eligible subject matter under Section 101?
                  (3) Whether the claimed subject matter is not patent-eligible because it constitutes an abstract idea or mental process; when does a claim that constitutes both mental and physical steps create patent-eligible subject matter?
                  (4) Whether a method or process must result in a physical transformation of an article or be tied to a machine to be patent-eligible subject matter under Section 101?
                  (5) Whether it is appropriate to reconsider State Street Bank & Trust Co. v Signature Financial Group, Inc., 149 F.3d 1368 (Fed. Cir. 1998), and AT&T Corp. v. Excel Communications, Inc., 172 F.3d 1352 (Fed. Cir. 1999), in this case and, if so, whether those cases should be overruled in any respect?
                oral arguments heard
on May 8, 2008
                  PTO position
                    "process" limited to:
                      process limited to a particular apparatus (i.e., machine implemented)
                      process that operates to change materials to a different state or thing
                CAFC decision
(en banc October 30, 2008)
                  Majority opinion
                    distance itself from State Street Bank
                    holding: "machine or transformation" test
                      For a claimed process to be patent-eligible under § 101, it is both necessary and sufficient that either:
                        (1) it is tied to a particular machine or apparatus, or
                        (2) it transforms a physical article or object into a different state or thing.
                    ambiguities
                      unclear whether recitation of implementation in a general-purpose computer will suffice
                        PTO takes the position: No
                          Ex parte Langemyr and Ex parte Wasynczuk
                  dissents
                    Mayer
                      would expressly overrule State Street and declare all BMPs unpatentable
                    Rader
                      would adhere to State Street test
                      Bilski patent should be rejected as an "abstract idea"
                    Newman
                      would adhere to State Street test
                      Bilski patent should be granted
                Supreme Court review 2009-2010
              options presented to SCt
                (1) Variations on Chakrabarty test
                  (a) reinstate Chakrabarty (1980)
                    patentable
                      anything under the sun made by man
                    unpatentable:
                      laws of nature
                      physical phenomena
                      abstract ideas
                  (b) Chakrabarty + exclusion for tax patents
                  (c) Chakrabarty + for business-method patents
                  (d) Chakrabarty + exclusion of algorithms not tied to physical elements or steps
                    Freeman-Walter-Abele test
                (2) Variations on "Technical Aspect" Test
                  EU approach
                  cf. IBM amicus brief
                (3) Variations on "Useful, Tangible, Result" Test
                  (a) reinstate State Street test
                  (b) State Street + requirement of physical steps
                    cf. Microsoft brief
                  (c) State Street + requirement of specific series of steps
                    cf. Yahoo! brief
                (4) Variations on "machine or transformation" test
                  (a) CAFC decision in Bilski
                  (b) reject option of satisfying "machine" through recitation of general-purpose computer
              Result
                reject blanket exclusion of business methods
                reject "machine or transformation" test as the exclusive test, but approve it as one among many
                reinstate, roughly, prior open-ended definitions of "process"
                encourage CAFC to continue to look for ways of limiting BMPs to ensure they advance the purposes of the patent system
            Bilski to Alice (2014)
              2011 patent reform
                defendants accused of infringing BMPs in financial services field can initiate post-grant PTO review of the patents
                this option expires in 2020
              Data
                BMPs applied for and issued
                Impact of SPER
                  large increase in prior-art references
                    roughly correlated with increase in patent quality
                      probability that patent will be found valid if challenged
                      i.e., strength in terms of novelty, nonobviousness, and enablement
                    Allison & Hunter 2005
                  Bad news: strategic drafting to avoid SPER
              Cybersource (CAFC 2011)
              Dealertrack (2012)
              Fort Properties (2012)
              Efforts to make sense of the cases
            Now governed by _Alice_ (see Software, below)
          Policy
            Most of the relevant scholarship argues that BMPs ought not enjoy patent protection
            Daniel Brean (2018) argues that current _de facto_ and _de jure_ discrimination against BMPs violates TRIPS, Article 27
        EPC
        Japan
      Software
        U.S.
          Doctrinal
History
            1960s: CCPA forces PTO to increase availability of patent protection for software
              Prater (1969)
              Bernhart (1969)
                software for depicting three dimensional objects in two dimensions
                Held: A machine programmed in a new and nonobvious way is patentable
              Musgrave (1970)
            1970s: Supreme Court
applies the brakes
              Gottshalk v. Benson (1972)
                computerized process for converting binary-coded numerals to pure binary form
                Held: unpatentable because the invention claimed consists of no more than a mathematical algorithm; a patent would preempt its use
              Parker v. Flook (1978)
                computerized method for continuously recalculating the "alarm limit" during a chemical conversion process
                Held: unpatentable, because if one ignores the algorithm on which the process is based, the claimed invention contains nothing new or inventive
                Door left open a crack: "We do not hold that no process patent could ever qualify if it did not meet the requirements of our prior precedents. It is said that the decision precludes a patent for any program servicing a computer. We do not so hold."
            1980-2010:
Gradual Relaxation of
impediments
              CCPA
                "Freeman-Walker-Abele test"
                  If the claimed invention (a) directly or indirectly recites a mathematical algorithm, but (b) applies that algorithm in an otherwise statutory appparatus or process claim, it's patentable
                In re Freeman (1977)
                In re Walter (1980)
                In re Abele (1982)
              Supreme Court
                Diamond v. Diehr
(US 1981)
                  a process for continuously monitoring the temperature inside a synthetic rubber mold, using a computer and the well-known Arrhenius equation for measuring cure time as a function of temperature and other variables
                  Held: patentable, because this is an ordinary industrial process that happens to incorporate a computer program
              CAFC
                Iwahashi (1989)
                  voice pattern recognition software
                    incorporating improved technique for calculating autocorrelation coefficients
                    i.e., compaing short snippets of speech
                  held: fact that it was embedded in a read-only device made it a patentable machine or manufacture
                Arrhythmia (1992)
                  computerized method of analyzing electrocardiograph ("ECG") patterns to detect persons at risk for certain heart diseases
                  "These claimed steps of 'converting,' 'applying,' 'determining,' and "comparing' are physical process steps that transform one physical, electrical signal into another."
                Allappat (1994)
                  software for controlling the illumination of pixels on an oscilliscope to minimize discontinuity and jaggedness
                  Held: an algorithm embedded in general purpose computer is patentable
                State Street Bank (1998)
                  computerized hub & spoke accounting method
                  Transformation of data by a machine into a final share price constitutes a practical application of an algorithm and is therefore patentable subject matter
                  Repudiate "business methods" exception to patentability
                AT&T (1999)
              PTO
                1996 Guidelines
                  will accept applications for patents on software on disks
              Data
            2014 to present: Supreme Court applies the brakes again
              Alice (2014)
                facts
                  The claims at issue relate to a computerized scheme for mitigating “settlement risk”—i.e., the risk that only one party to an agreed-upon financial exchange will satisfy its obligation. In particular, the claims are designed to facilitate the exchange of financial obligations between two parties by using a computer system as a third-party intermediary.
                  The intermediary creates “shadow” credit and debit records (i.e., account ledgers) that mirror the balances in the parties’ real-world accounts at “exchange institutions” (e.g., banks). The intermediary updates the shadow records in real time as transactions are entered, allowing “only those transactions for which the parties’ updated shadow records indicate sufficient resources to satisfy their mutual obligations.”
                  At the end of the day, the intermediary instructs the relevant financial institutions to carry out the “permitted” transactions in accordance with the updated shadow records, thus mitigating the risk that only one party will perform the agreed-upon exchange.
                Holding
                  [A] framework for distinguishing patents that claim laws of nature, natural phenomena, and abstract ideas from those that claim patent-eligible applications of those concepts:
                    Step 1: First, we determine whether the claims at issue are directed to one of those patent-ineligible concepts.
                    Step 2: If so, we then ask, “[w]hat else is there in the claims before us?” To answer that question, we consider the elements of each claim both individually and “as an ordered combination” to determine whether the additional elements “transform the nature of the claim” into a patent-eligible application.
                      We have described step two of this analysis as a search for an “ ‘inventive concept’”—i.e., an element or combination of elements that is “sufficient to ensure that the patent in practice amounts to significantly more than a patent upon the [ineligible concept] itself.”
                Applied
                  Step 1: “On their face, the claims before us are drawn to the concept of intermediated settlement, *i.e.,* the use of a third party to mitigate settlement risk.
                    Like the risk hedging in *Bilski*, the concept of intermediated settlement is “ ‘a fundamental economic practice long prevalent in our system of commerce.’” ... Thus, intermediated settlement, like hedging, is an“abstract idea” beyond the scope of §101.”
                  Step 2: “We conclude that the method claims, which merely require generic computer implementation, fail to transform that abstract idea into a patent eligible invention. ...
                    Taking the claim elements separately, the function performed by the computer at each step of the process is “[p]urely conventional.” ... Petitioner’s claims to a computer system and a computer readable medium fail for substantially the same reasons. ... Put another way, the system claims are no different from the method claims in substance. The method claims recite the abstract idea implemented on a generic computer; the system claims recite a handful of generic computer components configured to implement the same idea.”
              Post-Alice
                CAFC caselaw
                  Claims that pass step 1
                    DDR Holdings (2014)
                    Enfish (2016)
                    McRO (2016)
                      patent
                      opinion
                    Visual Memory (2017)
                      patent
                      opinion
                  Claims that fail step 1, but pass step 2
                    Bascom (2016)
                  Claims that fail step 1 and fail step 2
                    Digitech (2014)
                    buySafe (2014)
                    Ultramerical (2014)
                    Content Extraction (2014)
                    OP Technologies (2015)
                    IV v. Capital One (2015)
                    Mortgage Grader (2016)
                    Affinity Labs (2016)
                      patent
                      opinion
                    FairWarning (2016)
                      patent
                      opinion
                Overall Trends
                  Many applications are rejected or abandoned
                    In 2 years after Alice, 36,000 applications have been rejected by the PTO based on Alice
                  EFF celebrates many post-Alice defeats of “trolls”
                    eDekka
                    Eclipse IP
                    Garfum.com
                    White Knuckle
                      claim
                        1. A game medium including read only memory (ROM) or random access memory (RAM) configured to provide a sports video game in conjunction with a video game machine, the sports video game including video game rules, video game character parameters, and video game stadium or field parameters, the game medium having rules and parameters stored thereon and being configured to cause the video game machine to perform a method comprising:
                        loading video game data stored by the game medium into memory for playing the video game, the video game data including one or more video game characters associated with corresponding real-life sports athletes, and one or more video game stadium or field parameters, the video game stadium or field parameters including a video game field or stadium attribute in the video game that corresponds to a real-life attribute of a real-life sports stadium or field;
                        receiving an updated video game stadium or field parameter from a data server via the network including the Internet, wherein the updated video game stadium or field parameter includes data that corresponds to a real-life change in the real-life sports stadium or field attribute;
                        changing a stadium or field parameter in the video game based on the updated video game stadium or field parameter received such that the video game stadium or field attribute more closely represents the changed real-life stadium or field attribute; and
                        enabling a user to control the one or more video game characters using a video game controller connected to the video game machine.
                      illustration
                  Gene Quinn, IP Watchdog
                    if you write your patent applications to describe (and claim) an invention that is adequately described so that someone of skill in the art will actually understand what is innovative (i.e., how and why), with a thick technical disclosure and explanation as to how computer functionality is being improved, or even generic components are working in unconventional ways, then you will get a patent because your claims will be patent eligible.
                    What this means is if you want to patent software you simply cannot write your patent applications so that an English major or History major will be able to understand the application from start to finish. If you write your application so that an technologically unsophisticated reader can understand everything from start to finish then you have failed. That, of course, does not mean I am suggesting you hide or otherwise obfuscate the invention, but it does mean that your patent application needs to be written for the proper audience, which is a technologist skilled in the computer/software arts.
                    Thus, the first thing you need to do is not focus on the software, but rather, focus on that hardware and how the hardware will be connected. Some will think this harkens back to the machine-or-transformation test, or perhaps longer ago when computer software was not patentable at all and these innovations were protected by describing the machine performing the functions. Think what you want, but if you want to patent software your description must be of a concrete and tangible technological innovation, and that concrete and tangible technological innovation must come through in the claims.
        E.U.
        Commentary
          Pro-Patent Arguments
            patent protection necessary to provide optimal incentives for development of new software "ideas," not just expression thereof
              especially in light of weak copyright protection for "structure, sequence, and organization" of programs
            patent protection necessary to enable firms to raise funds to commercialize innovations
            publication requirement will accelerate progress and reduce redundant research
              contrast trade-secret protection
            patents necessary to avoid tilting R&D toward service-intensive sectors
            denying patent protection for software will be either futile or impracticable
              because increasingly, any given IT innovation can be implemented in either hardware or software
          Anti-Patent Arguments
            there already exist adequate incentives for innovative activity
              Copyright
                (see Copyright map)
              opportunities to sell software-related services
              nonmonetary motivations
                reputation
                challenge
                play
                see Benkler, Coase's
Penguin, Yale L.J. 2003;
Wealth of Networks (2006)
            software patents benefit large firms and disadvantage SMEs
              high costs
              patent pools and cross licensing favor established firms and raise barriers to entry
            patents create impediments to cumulative innovation
              "If people had understood how patents would be granted when most of today's ideas were invented, and had taken out patents, the industry would be at a complete standstill today"
                Bill Gates (1991)
            patents threaten development of free and open-source software
              Lessig
          Empirical Studies
            James Bessen & Robert Hunt, "An Empirical Look at Software Patents" (2004)
              rate of increase in software patenting in US substantially exceeds rate of increase in R&D spending
              for individual firms, patents and R&D are typically substitutes, not complements
                consistent with strategic patenting
                inconsistent with incentive theory
              most software patents are issued to manufacturing firms, not software firms
                e.g., IBM has 7,500
            Robert Hahn & Scott Wallsten,
"A Review of Bessen and Hunt"
(2003)
              argue B&H use excessively broad definition of software and narrow sample of firms
              argue B&H improperly rely on patent grants, rather than applications
            Ronald Mann (2005)
              more optimistic assessment of the functions performed by software patents in hands of small firms
          Proposals for Improving the System
            No patents on information processing technology?
              Pam Samuelson, "Benson Revisited,"
39 Emory L.J. 1025 (1990)
              probably politically infeasible in USA
              would prompt embedding innovations in software, not hardware
            Eliminate Business-Method Patents
              Unnecessary to stimulate innovation in business techniques
                Rochelle Dreyfuss, “Are BMPs
Bad for Business,” 16 Computer
& High-Tech LJ 263 (2000)
              Adequate incentives already exist in the form of first-mover advantages
                Arti Rai, “Addressing the Patent
Gold Rush,” 2 Wash. U. J. Law
& Policy 199 (2000)
              Counter: Quality and Value of BMPs are just as high as those of other patents
                John Allison & Emerson Tiller,
“The BMP Myth,” 18 Berkeley
Tech. L.J. 987 (2003)겨갃ߐĀ限࿕
                response: these are measures of private value, not social value
            Narrow the scope of patent
protection for software
              Improve quality of software patent exams
                "second pair of eyes"
                  already instituted in U.S. for BMPs
                enhance databases of nonpatent literature
                  Bradford Smith & Susan Mann,
"Innovation and IP,"
Chicago LR 2004
              Tighten Nonobviousness standard
                Would the invention have been obvious to "a person of ordinary skill ... who: (a) knew the particular algorithm; (b) desired to accomplish the function or task to be performed; and (c) desired to do so with the aid of a computer"
                  Richard Stern
                  Julie Cohen
              Tighten Disclosure
Requirement
                compel revelation of object code of preferred embodiment of the program
                Lawrence Graham & Richard Zerbe,
"Economically Efficient Treatment of
Computer Software," 61 Rutgers
Computer & Tech. L.J. 96 (1996)
              Increase opportunities for third-party challenges
                pre-grant opposition systems
                post-grant reexamination systems
                Jaffe et al., 2004
              Limit Patent Entitlements
                Safe harbor for copying programs to the extent necessary to achieve interoperability
                Sparing application of "equivalents" doctrine to permit nonliteral copying
                Julie Cohen & Mark Lemley, "Patent Scope and Innovation in theSoftware Industry," 89 California L. Rev. 1 (2001)
      Medical Procedures
        TRIPS 27(3)(A) permits exclusion
          3. Members may also exclude from patentability:
(a) diagnostic, therapeutic and surgical methods for the treatment of humans or animals...
        The overwhelming majority of countries exclude medical procedures
          e.g., EPC 53: no patents
            European patents shall not be granted in respect of: ... (c) methods for treatment of the human or animal body by surgery or therapy and diagnostic methods practised on the human or animal body; this provision shall not apply to products, in particular substances or compositions, for use in any of these methods.
          Exceptions: USA and Australia
        USA: Limitation on remedies
          Background
          US position after 1996: patents permissible but doctors and "related health care entities" are not subject to patent remedies for "performance" of "medical activities"
            287(c)
              **(1)** With respect to a medical practitioner’s performance of a medical activity that constitutes an infringement under section 271(a) or (b), the provisions of sections 281, 283, 284, and 285 shall not apply against the medical practitioner or against a related health care entity with respect to such medical activity.
              **(2)** For the purposes of this subsection:
                **(A)** the term “medical activity” means **the performance of a medical or surgical procedure on a body**, but shall not include (i) the use of a patented machine, manufacture, or composition of matter in violation of such patent, (ii) the practice of a patented use of a composition of matter in violation of such patent, or (iii) the practice of a process in violation of a biotechnology patent.
                  [biotechnology patent = "a process of genetically altering of inducing a single or multi-celled organism" *or* "cell fusion procedures yielding a cell line that expresses a specific protein" *or* "methods of using a product produced" by the above processes.]
                **(B)** the term “medical practitioner” means any natural person who is licensed by a State to provide the medical activity described in subsection (c)(1) or who is acting under the direction of such person in the performance of the medical activity.
                **(C)** the term “related health care entity” shall mean an entity with which a medical practitioner has a professional affiliation under which the medical practitioner performs the medical activity, including but not limited to a nursing home, hospital, university, medical school, health maintenance organization, group medical practice, or a medical clinic.
                **(D)** the term “professional affiliation” shall mean staff privileges, medical staff membership, employment or contractual relationship, partnership or ownership interest, academic appointment, or other affiliation under which a medical practitioner provides the medical activity on behalf of, or in association with, the health care entity.
                **(E)** the term “body” shall mean a human body, organ or cadaver, or a nonhuman animal used in medical research or instruction directly relating to the treatment of humans.
                **(F)** the term “patented use of a composition of matter” does not include a claim for a method of performing a medical or surgical procedure on a body that recites the use of a composition of matter where the use of that composition of matter does not directly contribute to achievement of the objective of the claimed method.
                **(G)** the term “State” shall mean any State or territory of the United States, the District of Columbia, and the Commonwealth of Puerto Rico.
              **(3)** This subsection does not apply to the activities of any person, or employee or agent of such person (regardless of whether such person is a tax exempt organization under section 501(c) of the Internal Revenue Code), who is engaged in the commercial development, manufacture, sale, importation, or distribution of a machine, manufacture, or composition of matter or the provision of pharmacy or clinical laboratory services (other than clinical laboratory services provided in a physician’s office), where such activities are:
                **(A)** directly related to the commercial development, manufacture, sale, importation, or distribution of a machine, manufacture, or composition of matter or the provision of pharmacy or clinical laboratory services (other than clinical laboratory services provided in a physician’s office), and
                **(B)** regulated under the Federal Food, Drug, and Cosmetic Act, the Public Health Service Act, or the Clinical Laboratories Improvement Act.
              **(4)** This subsection shall not apply to any patent issued based on an application which has an effective filing date before September 30, 1996.
            Prospective only
            no exception for research
        Lab. Corp. v. Metabolit (2006)
          Breyer's position:
            no patent on process that merely restates a natural phenomenon
          arguments in favor of Breyer
            impediments to cumulative innovation
            rent dissipation
            impediments to the practice of medicine
            no patents on basic research
              distorts incentives
              alternative of naming rights
            incentives for basic researchers to specify practical applications
            judges shouldn't extend patent protection to things unanticipated by Congress
            general distrust of monopolies
          arguments against Breyer
            Incentives for discovering natural relationships
            incentives for costly medical research
        Mayo v. Prometheus (US 2012)
          facts
            gist of claims
              administer a drug for inflammatory bowel disease
              test for levels of resultant metabolite in the blood
              administer more or less of the drug, depending on whether metabolite levels fall above or below specified range
            Patent
              actual claim
                "A method of optimizing therapeutic efficacy for treatment of an immune-mediated gastrointestinal disorder, comprising:
"(a) administering a drug providing 6-thioguanine to a subject having said immune-mediated gastrointestinal disorder; and
"(b) determining the level of 6-thioguanine in said subject having said immune-mediated gastrointestinal disorder,
"wherein the level of 6-thioguanine less than about 230 pmol per 8x108 red blood cells indicates a need to increase the amount of said drug subsequently administered to said subject and
"wherein the level of 6-thioguanine greater than about 400 pmol per 8x108 red blood cells indicates a need to decrease the amount of said drug subsequently administered to said subject."
            Relevance of 287(c)?
              Prometheus: “ while “individual doctors generally are immune from suit, ... the commercial entities that enable and induce the infringement (such as Mayo’s for-profit laboratory) are not.” Brief for the Respondent in Opposition (to the petition for writ of certiorari), at 34.
              AIPPI Amicus
                However, 35 U.S.C. § 287(c) makes no distinction between “for- profit,” “not-for-profit,” and any other types of the defined “related health care entities” based upon financial motivation or any other criteria, for that matter; all are immune from suit unless one of the three § 287(c)(2)(A) exceptions applies. Prometheus fails completely to explain why
                Mayo Clinic Rochester and its related Mayo Collaborative Services are not “related health care entities” within the meaning of 35 U.S.C. § 287(c)(2)(C) and (D), both entitled to be free from patent infringement suits of the instant type. In fact, AIPPI respectfully suggests that both named defendants are plainly “related health care entities” and that, accordingly, Congress has eliminated availability of a federal civil action for patent infringement of Prometheus’ patent against them.
                The immunity from suit provided by Congress in 35 U.S.C. § 287(c)(1) should be given effect, and the case dismissed for lack of federal subject matter jurisdiction. That this issue apparently was not raised before either the District Court or the Federal Circuit is of no import, as it is hornbook law that “[o]bjections to subject-matter jurisdiction ... may be raised at any time.”
          CAFC
            rely on "machine or transformation" test to uphold the patent against 101 challenge
          Supreme Court
            reject patent on 101 grounds
            "If a law of nature is not patentable, then neither is a process reciting a law of nature, unless that process has additional features that provide practical assurance that the process is more than a drafting effort designed to monopolize the law of nature itself. "
            "Purely "conventional or obvious" "[pre]solution activity" is normally not sufficient to transform an unpatentable law of nature into a patent eligible application of such a law. "
            tie statutory standard directly to underlying policy concern: "that patent law not inhibit further discovery by improperly tying up the future use of laws of nature"
        Ariosa (CAFC)
        Impact on “personalized medicine”
          Adjustment of therapies to meet individual patient’s needs, often following diagnostic testing to ascertain individual characteristics
      Sports
        sports equipment
plainly patentable
        sports techniques patentable but controversial
          illustrations and problems
      Tax Strategies
        History in USA
          PTO begins to grant them in 1992
          1992-2011: pressure to eliminate these patents grows
            Equal Access to Tax Planning Act of 2011
            introduced in Senate, January 26, 2011
            accountants favor elimination of tax patents
              • Limits taxpayers’ ability to use fully tax law interpretations intended by Congress;
              • May cause some taxpayers to pay more tax than Congress intended or more than others similarly situated;
              • Complicates the provision of tax advice by professionals;
              • Hinders compliance by taxpayers;
              • Misleads taxpayers into believing that a patented strategy is valid under the tax law; and
              • Precludes tax professionals from challenging the validity of a patented strategy.
            criticism by tax professors
              Bernie Wolfman
          September 2011: eliminated
            "strategies for reducing, avoiding, or deferring tax liability"
        Other countries
          tax-strategy patents still available in Australia
    Net Effect
    Potential Limiting Principles
      1. Necessary Evil
        Patents have socially undesirable side effects; they should be used only when essential to stimulate innovative activity that otherwise would not occur
        Senator Frist, justifying 287(c)
          “[I]nnovations in surgical and medical procedures do not require the midwifery of patent law."
      2. Excessive Scope
        Patents should not reach extralarge territories
      3. Proportionality
        The rights conferred by a patent should be proportional to the effort that went into it and/or to the benefit it confers on society
        DDR Holdings (CAFC 2014) (Mayer dissenting)
          “ The potential scope of DDR's patents is staggering, arguably covering vast swaths of Internet commerce. DDR has already brought infringement actions against ten defendants, including Digital River, Inc., Expedia, Inc., Travelocity.com, L.P., and Orbitz Worldwide, LLC. See J.A. 255-63; ante at 1250. _DDR's claims are patent ineligible because their broad and sweeping reach is vastly disproportionate to their minimal technological disclosure._ See Mayo, 132 S.Ct. at 1303 (In assessing patent eligibility, "the underlying functional concern ... is a relative one: how much future innovation is foreclosed relative to the contribution of the inventor.”).”
      4. Protect Opportunities for Downstream Innovation
        Myriad/Mayo
          “We have “long held that this provision contains an important implicit exception[:] Laws of nature, natural phenomena, and abstract ideas are not patentable.” *Mayo*, 566 U. S., at ___ (slip op., at 1) (internal quotation marks and brackets omitted). Rather, “‘they are the basic tools of scientific and technological work’” that lie beyond the domain of patent protection. *Id.,* at ___ (slip op., at 2). As the Court has explained, without this exception, there would be considerable danger that the grant of patents would “tie up” the use of such tools and thereby “inhibit future innovation premised upon them.” *Id.*, at ___ (slip op., at 17). This would be at odds with the very point of patents, which exist to promote creation.”
      5. Nationalism/Mercantilism
        If lawmakers in country A think that firms in country A lead in technological development with respect to field X, then they should advocate extension of subject-matter coverage to inventions in field X, both domestically and internationally
        If lawmakers in country A think that firms in country A do (and will) lag firms in other countries with respect to field X, then they should advocate elimination of subject-matter coverage to inventions in field X, both domestically and internationally
      6. Hubris
        Humans should not assert rights to the work of the gods
          Chakrabarty
      7. Pandora’s Box
        Unconstrained curiosity will release uncontrollable evils into the world
        Discourage inventive activity in sectors that will plague humanity
      8. Sector-Specific Altruism
        Hippocratic Oath
          Louis Lasagna version (1964)
            I swear to fulfill, to the best of my ability and judgment, this covenant:
            **I will respect the hard-won scientific gains of those physicians in whose steps I walk, and gladly share such knowledge as is mine with those who are to follow.**
            **I will apply, for the benefit of the sick, all measures [that] are required**, avoiding those twin traps of overtreatment and therapeutic nihilism.
            I will remember that there is art to medicine as well as science, and that warmth, sympathy, and understanding may outweigh the surgeon's knife or the chemist's drug.
            I will not be ashamed to say "I know not," nor will I fail to call in my colleagues when the skills of another are needed for a patient's recovery.
            I will respect the privacy of my patients, for their problems are not disclosed to me that the world may know. Most especially must I tread with care in matters of life and death. If it is given me to save a life, all thanks. But it may also be within my power to take a life; this awesome responsibility must be faced with great humbleness and awareness of my own frailty. Above all, I must not play at God.
            I will remember that I do not treat a fever chart, a cancerous growth, but a sick human being, whose illness may affect the person's family and economic stability. My responsibility includes these related problems, if I am to care adequately for the sick.
            I will prevent disease whenever I can, for prevention is preferable to cure.
            I will remember that I remain a member of society, with special obligations to all my fellow human beings, those sound of mind and body as well as the infirm.
            If I do not violate this oath, may I enjoy life and art, respected while I live and remembered with affection thereafter. May I always act so as to preserve the finest traditions of my calling and may I long experience the joy of healing those who seek my help.
      9. Sanctity of (Human) Life
  International Framework
    Five main patent systems
      USA
      EPC
      Japan
      Korea
      China
      together, these receive aprx. 90% of all patent applications
    Integration and Harmonization
      Background
        19th century: wide variations among countries in substantive patent law
          Subject Matter coverage
          Substantive examination of patent applications
          Publication practices
            Upon filing
            Upon grant
            Upon expiration
          Priority rules
            First to invent
            First to file
        Each country tended to
favor its own nationals
          Rationales
            Simple nationalism
            if the inventive activity stimulated by the patent regime occurs outside the country, the country reaps fewer social benefits while bearing all the social harms
      Paris Convention
        History
          Created 1884
          6 revisions
          Currently, 177 member countries
            list
            map
        Major Provisions
          National Treatment
            Section 2(1)
              “Nationals of any country of the Union shall, as regards the protection of industrial property, enjoy in all the other countries of the Union the advantages that their respective laws now grant, or may hereafter grant, to nationals; all without prejudice to the rights specially provided for by this Convention. Consequently, they shall have the same protection as the latter, and the same legal remedy against any infringement of their rights, provided that the conditions and formalities imposed upon nationals are complied with.”
            Reject reciprocity principle
            Applies to both patents and utility models
          Right of Priority
            Eliminate need to file in separate countries on same day
            Procedure
              File in member country A
              File in member country B within 1 year
              Get priority date in B of filing in A
            Priority claim does not affect term of patent -- 4bis(5)
              “(5) Patents obtained with the benefit of priority shall, in the various countries of the Union, have a duration equal to that which they would have, had they been applied for or granted without the benefit of priority.”
            US Implementation: 35 USC 119
              Can invoke this procedure iff claims in American application are supported by prior foreign application to extent required by 112
          Restrictions on Compulsory Licenses
            Modest (but controversial) limitations on ability of member countries to impose compulsory licenses or declare patents forfeit for “failure to work”
            No limits on the grant of CLs in the public interest
          Member states may form "Special Agreements"
        Gaps
          No minimum standards for patent protection
            Member countries
varied widely
          No guarantees of effective enforcement of patents
          No meaningful system for policing violations of the Convention
            Possible to seek review of another country's compliance in Court of International Justice
            Never invoked
      Patent Cooperation Treaty
        History
          Limited to members of Paris Convention
          Effective 1970
          US Accession 1978
          Modified 1979, 1984
          Currently 152 member countries
        Procedures
          (1) International Patent Application
            In designated national patent offices (Receiving Offices”) or with WIPO
            Designate any or all PCT states
            May claim priority date of prior filing in Paris Convention Country
          (2) International Search Report
            Prepared by an "International Search Authority" selected by applicant
              designated national patent offices
              currently the national offices of: Australia; Austria; Brazil; Canada; China; Finland; Sweden; Japan; Republic of Korea; Russian Federation; Spain; USA; the international office of “Nordic Patent Institute” (Denmark/Iceland/Norway); and the European Patent Office
            content
              Classification of invention
              Fields searched
              Citations to prior art
            Published 18 months after priority date
          (3) International Preliminary Examination
            Optional
              currently requested in by only aprx. 10% of applicants
            Nonbinding opinion concerning novelty, nonobviousness, utility
          (4) National Patent Examinations
            Each office tests application against local standards
            No requirement of full faith and credit
          Fees
            WIPO
            USPTO
        Advantages to patentees
          Reduce expense of international filings
          Delay prior to "National Phase"
            up to 30 months
            exceptions
              31 months for EPO
              20 months for Luxembourg, Tanzania, and Uganda
        PCT Usage
      Patent Law Treaty
        Standardize patent applications
          Mandate particular ways of interpreting terms (e.g., date of application
          Forbid member countries to adopt more onerous filing requirements
        History
          Adopted in 2000
          Currently 39 members
            Including US, EPO, Japan
      TRIPS
        History
          Adopted 1994, as part of Uruguay Round of GATT
            Interpretations of the Origins of the Agreement
              (1) Developed countries forced less developed countries to accept IP rules not in their best interest
                The leaders of major industries (Hollywood and PHARMA) successfully used the GATT process to advance their own interests
                  Susan K. Sell, Private Power, Public Law:
The Globalization of Intellectual Property
Rights (2003)
                  Ruth L. Okediji, Public Welfare and the
Role of the WTO: Reconsidering the
TRIPS Agreement, 17 Emory Int'l L. Rev.
819 (2003)
              (2) Less developed countries rationally traded obligation to increase IP protections for (a) increased opportunities to export agricultural products and textiles and (b) protection from unilateral sanctions by USA
                Peter Yu, "TRIPS and Its Discontents,"
10 Marq. Intell. Prop. L. Rev. 369 (2006)
                Reichman & Dreyfuss, “Harmonization Without Consensus,” 57 Duke L.J. 85 (2007)
              (3) Leaders of less developed countries saw increased IP protections as beneficial for them in the long run -- and used the WTO as a vehicle to outflank parochial local pirate industries
                cf. Edmund W. Kitch,
The Patent Policy of Developing Countries,
13 UCLA Pac. Basin L.J. 166 (1994)
          Currently 164
member countries
            list
            map
            Compliance hiatus for Least Developed Countries
              Membership determined by the Committee for Development of the United Nations
              Currently 47 such countries, 36 of which are members of the WTO
              Map
              Deadline for compliance with TRIPS recently extended to 2021 for most issues; 2033 for pharmaceuticals (or until a country escapes the category of “least developed”)
        Substance
          Incorporate Paris Convention, Articles 1-12, 19
          National Treatment
          Most favored nation principle
            “With regard to the protection of intellectual property, any advantage, favour, privilege or immunity granted by a Member to the nationals of any other country shall be accorded immediately and unconditionally to the nationals of all other Members” – 4
            Limited exceptions
          Mandatory Subject-Matter Coverage (27)
            Countries must grant patents for all inventions (products and processes) that are:
              Novel
              Involve an inventive step
              Capable of Industrial Application
            No discrimination on basis of:
              Field of technology
              Place of invention
              Local production
                “Patent rights [shall be] enjoyable without discrimination as to … whether products are imported or locally produced”
                Possible Interpretations:
                  (a) ban all “working” obligations
                  (b) compulsory licenses are permitted if they do not treat differently imported and locally produced products
                commentary
                  for analysis of the scope of a country's authority to impose working requirements, see Halewood, "Regulating Patent Holders: Local Working Requirements and Compulsory Licenses at International Law," 35 Osgood Hall L.J. 243 (1997)
                  Mercurio and Tyagi, “ Treaty Interpretation in WTO Dispute Settlement: The Outstanding Question of the Legality of Local Working
Requirements,” Minnesota Journal of International Law (2010)
            Permissible Exclusions
              “inventions, the prevention within their territory of the commercial exploitation of which is necessary to protect ordre public or morality, including to protect human, animal or plant life or health or to avoid serious prejudice to the environment” – 27.2
              “diagnostic, therapeutic and surgical methods for the treatment of humans or animals” – 27.3
              “plants and animals other than micro-organisms” & biological [not microbiological] processes for the production thereof – 27.3
                But must then provide sui generis protection for plant varieties
          Mandatory Entitlements
            Products: “to prevent third parties not having the owner's consent from the acts of: making, using, offering for sale, selling, or importing” – 28.1(a)
            Processes: “to prevent third parties not having the owner's consent from the act of using the process, and from the acts of: using, offering for sale, selling, or importing for these purposes at least the product obtained directly by that process” – 28.1(b)
            Rights to assign and license – 28.2
            Exceptions
              “Limited” exceptions to exclusive rights
permissible only if they “do not unreasonably
conflict with a normal exploitation of the
patent and do not unreasonably prejudice
the legitimate interests of the patent owner,
taking account of the legitimate interests
of third parties” – 30
                "three step test"
              Possible examples
                Experimental Use Defense
                Refusals to grant injunctive relief where it might threaten public health
          Limits on Compulsory Licenses (31)
            Constraints
              (a) authorization considered on the merits;
              (b) must first try to obtain authorization on reasonable commercial terms
                Waived in cases of "national emergency or other circumstances of extreme urgency"
                  Each Member has the right to grant compulsory licences and the freedom to determine the grounds upon which such licences are granted.
Doha Declaration (11/14/2001), 5(b).
                  Each Member has the right to determine what constitutes a national emergency or other circumstances of extreme urgency, it being understood that public health crises, including those relating to HIV/AIDS, tuberculosis, malaria and other epidemics, can represent a national emergency or other circumstances of extreme urgency. Doha Declaration (11/14/2001), 5(c)
              (c) scope and duration limited to original purpose;
              (d) nonexclusive;
              (e) nonassignable;
              (f) authorized predominantly for the use of the domestic market;
                Waived with respect to drugs exported to a member country that lacks sufficient manufacturing capacity and grants a CL on the drug, Clarification of Doha, 8/30/2003
                  Importing countries must take measures to prevent re-exportation
                  Other member countries must take measures to prevent importation of such drugs
              (g) license ceases when the circumstances no longer exist;
              (h) “appropriate compensation” for the use, “taking into account the economic value of the license”;
                When both exporting and importing countries create CLs for drugs, exporting country must arrange payment of adequate remuneration to patentee, but importing country need not, Clarification of Doha, 8/30/2003
              (i) validity of license subject to judicial review;
              (j) appropriate compensation subject to judicial review;
              (k) anti-competitive practices by the patent holder taken into consideration
                Members are not obliged to apply the conditions set forth in subparagraphs (b) and (f) where such use is permitted to remedy a practice determined after judicial or administrative process to be anti-competitive.
                  Used by Competition Commission of South Africa to provoke issuance of "voluntary" licenses to generic companies for HIV cocktails (December 2003)
                    (a) monopoly prices unreasonably impede access to medicine
                    (b) refusal to issue voluntary licenses to generics abusively impedes competition
                    (c) refusal to issue voluntary licenses denies access to "essential facilities"
                The need to correct anti-competitive practices may be taken into account in determining the amount of remuneration in such cases.
                Competent authorities shall have the authority to refuse termination of authorization if and when the conditions which led to such authorization are likely to recur
          Enablement Requirement (29.1)
            Mandatory enablement requirement
            Optional best-mode requirement
          Term
            minimum: 20 years from filing (Art. 33)
              "The term of protection available shall not end before the expiration of a period of twenty years counted from the filing date"
            No maximum
              E.g., U.S. 35 USC §154
          Mandatory enforcement (41-49)
            "fair and equitable" procedures
            Decisions in writing
            Damages
            Injunctions
          “Flexilibities”
            Subject Matter
              Technical Scope of subject-matter protection
                e.g., availability of patent protection for software and business methods
              Exceptions permitted by Art 27 to subject matter
                “necessary to protect ordre public or morality, including to protect human, animal or plant life or health or to avoid serious prejudice to the environment”
                medical procedures
                plants
              Utility Models / Petty Patents
            Requirements for Obtaining a Patent
              Definition of inventive step
              “First to file” vs. “first to invent”
            Patent Entitlements
              Scope of doctrine of equivalents
              Exhaustion – 6
                "For the purposes of dispute settlement under this Agreement, subject to the provisions of Articles 3 and 4 nothing in this Agreement shall be used to address the issue of the exhaustion of intellectual property rights."
                critical because of the discretion it leaves countries with respect to opportunities for geographic price discrimination
              Prior-user rights
              Exceptions permitted by article 30 to mandatory entitlements
              Some latitude in issuing compulsory licenses
                Article 31
                Doha Declaration and Council Resolution
        Dispute Resolution
          Procedure
            Consultation among disputants
            WTO Panel considers dispute
            Appellate Review within WTO
          Penalties: Cross-sectoral retaliation
        Assessments
          from standpoint of the IP-heavy industries
            PHARMA has received major gains from imposition of product patent protection for drugs
            Hollywood has thus far gained less because of poor enforcement
          from standpoint of developing countries
            widespread view that, thus far, they have been disadvantaged
              World Bank, Global Economic Prospects and the Developing Countries 2002, Chpt. 5 (2001), http://siteresources.worldbank.org/INTGEP2002/Resources/gep2002complete.pdf
            ongoing debate concerning long-term impact
          from standpoint of global social welfare
            extremely difficult to assess because of poor information concerning net impact, both globally and locally, of increased IP protection
      Free Trade Agreements
        History
          soon after TRIPS, US and EU began negotiating bilateral and regional agreements with stricter IP obligations
          impediments to further tightening of IP regime through WTO (e.g., Cancun 2003) has led to increased reliance on this approach
        Examples
          bilateral FTAs between US and other countries
          Regional FTAs
            NAFTA
              **Article 1709: Patents**
              Subject Matter
                1. Subject to paragraphs 2 and 3, each Party shall make patents available for any inventions, whether products or processes, in all fields of technology, provided that such inventions are new, result from an inventive step and are capable of industrial application. For purposes of this Article, a Party may deem the terms "inventive step" and "capable of industrial application" to be synonymous with the terms "non-obvious" and "useful", respectively.
                2. A Party may exclude from patentability inventions if preventing in its territory the commercial exploitation of the inventions is necessary to protect ordre public or morality, including to protect human, animal or plant life or health or to avoid serious prejudice to nature or the environment, provided that the exclusion is not based solely on the ground that the Party prohibits commercial exploitation in its territory of the subject matter of the patent.
                3. A Party may also exclude from patentability:
                  1 (a) diagnostic, therapeutic and surgical methods for the treatment of humans or animals;
                  (b) plants and animals other than microorganisms; and
                    Notwithstanding subparagraph (b), each Party shall provide for the protection of plant varieties through patents, an effective scheme of *sui generis* protection, or both.
                  (c) essentially biological processes for the production of plants or animals, other than non-biological and microbiological processes for such production.
                4. If a Party has not made available product patent protection for pharmaceutical or agricultural chemicals commensurate with paragraph 1:
                  1 (a) as of January 1, 1992, for subject matter that relates to naturally occurring substances prepared or produced by, or significantly derived from, microbiological processes and intended for food or medicine, and
                  (b) as of July 1, 1991, for any other subject matter,
                  that Party shall provide to the inventor of any such product or its assignee the means to obtain product patent protection for such product for the unexpired term of the patent for such product granted in another Party, as long as the product has not been marketed in the Party providing protection under this paragraph and the person seeking such protection makes a timely request.
              Mandatory Entitlements
                5. Each Party shall provide that:
                  1 (a) where the subject matter of a patent is a product, the patent shall confer on the patent owner the right to prevent other persons from making, using or selling the subject matter of the patent, without the patent owner's consent; and
                  (b) where the subject matter of a patent is a process, the patent shall confer on the patent owner the right to prevent other persons from using that process and from using, selling, or importing at least the product obtained directly by that process, without the patent owner's consent.
                6. A Party may provide limited exceptions to the exclusive rights conferred by a patent, provided that such exceptions do not unreasonably conflict with a normal exploitation of the patent and do not unreasonably prejudice the legitimate interests of the patent owner, taking into account the legitimate interests of other persons.
                7. Subject to paragraphs 2 and 3, patents shall be available and patent rights enjoyable without discrimination as to the field of technology, the territory of the Party where the invention was made and whether products are imported or locally produced.
                8. A Party may revoke a patent only when:
                  1 (a) grounds exist that would have justified a refusal to grant the patent; or
                  (b) the grant of a compulsory license has not remedied the lack of exploitation of the patent.
                9. Each Party shall permit patent owners to assign and transfer by succession their patents, and to conclude licensing contracts.
                10. Where the law of a Party allows for use of the subject matter of a patent, other than that use allowed under paragraph 6, without the authorization of the right holder, including use by the government or other persons authorized by the government, the Party shall respect the following provisions:
                  1 (a) authorization of such use shall be considered on its individual merits;
                  (b) such use may only be permitted if, prior to such use, the proposed user has made efforts to obtain authorization from the right holder on reasonable commercial terms and conditions and such efforts have not been successful within a reasonable period of time. The requirement to make such efforts may be waived by a Party in the case of a national emergency or other circumstances of extreme urgency or in cases of public non-commercial use. In situations of national emergency or other circumstances of extreme urgency, the right holder shall, nevertheless, be notified as soon as reasonably practicable. In the case of public non-commercial use, where the government or contractor, without making a patent search, knows or has demonstrable grounds to know that a valid patent is or will be used by or for the government, the right holder shall be informed promptly;
                  (c) the scope and duration of such use shall be limited to the purpose for which it was authorized;
                  (d) such use shall be non-exclusive;
                  (e) such use shall be non-assignable, except with that part of the enterprise or goodwill that enjoys such use;
                  (f) any such use shall be authorized predominantly for the supply of the Party's domestic market;
                  (g) authorization for such use shall be liable, subject to adequate protection of the legitimate interests of the persons so authorized, to be terminated if and when the circumstances that led to it cease to exist and are unlikely to recur. The competent authority shall have the authority to review, on motivated request, the continued existence of these circumstances;
                  (h) the right holder shall be paid adequate remuneration in the circumstances of each case, taking into account the economic value of the authorization;
                  (i) the legal validity of any decision relating to the authorization shall be subject to judicial or other independent review by a distinct higher authority;
                  (j) any decision relating to the remuneration provided in respect of such use shall be subject to judicial or other independent review by a distinct higher authority;
                  (k) the Party shall not be obliged to apply the conditions set out in subparagraphs (b) and (f) where such use is permitted to remedy a practice determined after judicial or administrative process to be anticompetitive. The need to correct anticompetitive practices may be taken into account in determining the amount of remuneration in such cases. Competent authorities shall have the authority to refuse termination of authorization if and when the conditions that led to such authorization are likely to recur;
                  (l) the Party shall not authorize the use of the subject matter of a patent to permit the exploitation of another patent except as a remedy for an adjudicated violation of domestic laws regarding anticompetitive practices.
                11. Where the subject matter of a patent is a process for obtaining a product, each Party shall, in any infringement proceeding, place on the defendant the burden of establishing that the allegedly infringing product was made by a process other than the patented process in one of the following situations:
                  1 (a) the product obtained by the patented process is new; or
                  (b) a substantial likelihood exists that the allegedly infringing product was made by the process and the patent owner has been unable through reasonable efforts to determine the process actually used.
                  In the gathering and evaluation of evidence, the legitimate interests of the defendant in protecting its trade secrets shall be taken into account.
              Duration
                12. Each Party shall provide a term of protection for patents of at least 20 years from the date of filing or 17 years from the date of grant. A Party may extend the term of patent protection, in appropriate cases, to compensate for delays caused by regulatory approval processes.
            CAFTA (2004)
        Typical provisions
          patent duration
            parties must extend patent terms to offset unreasonable delays in granting patents
          limits on compulsory licenses
          limits on parallel importation
          limits on access to clinical testing data
          prohibition on registration of generics until expiration of drug patents
      European Systems
        European Patent Organization
          History
            First discussed in 1950s
            Signed 1973
            Effective 1977
          Membership
            38 member countries (EU members plus several others)
            2 "Extension States" and 2 “Validation States”
            map
          Centralized filing and granting system
            File single application for European Patent with EPO (Munich)
            EPO conducts prior-art search
            Publication (18 months after filing)
            Report of EPO Examiner
              Response if appropriate
            Patent granted
            Opposition (may be filed within 9 months of grant)
            Conversion to national patents in designated member countries (within 3 months of grant)
          Substantive
Provisions
            Subject Matter
              52
              53
              57
            Novelty
              54
              55
            Inventive Step
              56
            Infringement
              69
          Limitations
            Harmonization is incomplete
              Rights of employees; rules of co-ownership; remedies all left to member countries
              Ambiguity in some of the substantive provisions
            No judicial centralization
              Enforcement requires separate suits in individual countries
              No appellate system for reconciling divergent interpretations
              Examples
                Epilady litigation: scope of equivalents doctrine (69 & Protocol); same patent; same litigants
                  Infringement found in
Belgium, Germany, Italy
                  Infringement not found in
UK, Austria, Netherlands
            Unanimity necessary (in practice) for revision
              Revision system of 172 never invoked
              Antiquated systems applicable to novelty and (arguably) software & biotechnology
          Usage
        Unitary Patent
          Background
            Inconclusive Efforts to establish a Community Patent
              Community Patent Convention
                Signed in 1975
                1989 Revision
                  Provided for appeal from national courts to a Community Patent Appeals Court
                  Mandatory translation of all applications into all EC languages
                Too few states ratified it;
never implemented
              Proposed Community Patent Regime
                Structure
                  Single application with EPO
                    National patent offices could
receive and forward applications
                  Issuance of single Community Patent, applicable throughout EU
                  Translation
                    Application in English, French, or German
                    Claims translated into other 2 languages
                    Claims translated into all other EC languages "within reasonable time"
                  Centralized Interpretation and Enforcement (under auspices of EJC)
                    Single Community Patent Court (to be formed by 2010)
                      National courts retain
jurisdiction until then
                    Appellate review by Court of First Instance of European Communities
                Evolution
                  3/3/2003: Competitiveness Council of Ministers announces "common political approach"
                  4/16/2003: President of EU Council distributes revised proposal for Council Regulation
                  2/2/2004: European Commission proposes two Council Decisions for judicial centralization
                  3/2004: Competitiveness Council fails to agree on details
                  4/2007: European Commission issues white paper, seeking to revive the plan
                  12/2009: EU Competitiveness Council makes significant progress
                    agreements
                      Process to fix and distribute renewal fees
                      Functioning of the Enhanced Partnership
                      Establishment of a unified patent litigation system
                        movement toward a European and EU Patents Court (EEUPC), which would have exclusive jurisdiction over EU and the European patents
                    next steps
                      Agreeing on an approach to regulate the translation of EU patents
                        early in 2009, EU Council had recommended a central translation service
                      Revising the European Patent Convention (EPC), to which the EU accedes
                  Ultimately morphs into Unitary Patent system
            Failed Initiative to Create 12-country patent system
              subset of EU countries hoping to offer a patent applicable in them all, without the costs of translation
                UK, Denmark, Estonia, Finland, France, Germany, Lithuania, Luxembourg, The Netherlands, Poland, Slovenia and Sweden
                opposition by Spain and Italy
                Not a major reform; essentially cost-reduction strategy
              Status
                procedure: "enhanced cooperation mechanism"
                approved by committee of Parliament, Jan. 31, 2011
                Parliament approves
                March 2011: ECJ rejects it as not adapted to EU law
                September 2011: 3 professors at Universidad Carlos III de Madrid advocated similar set of reforms, to be applicable throughout Europe
          Features of the new Unitary Patent
            Granted by the EPO
            Instead of multiple national patents, enforceable only in national courts, it will be a single patent, enforceable in all ratifying states (within the EU), enforceable in a single new Unified Patent Court
              Participating countries
              Unified Patent Court
                locations
                  Court of Appeal: Luxembourg
                  Court of First Instance (Central Division): Paris
                  Court of First Instance (branches): Munich, London
              languages
                English
                French
                German
          Advantages
            Less expensive
            Consistent interpretation of the patent throughout the participating states
          Status
            scheduled for implementation sometime in 2018
            However, implementation is threatened by:
              (a) constitutional challenge to implementing legislation in Germany (filed in June 2017)
              (b) Brexit